Google: Digital GDP has reached EGP 15.6bn in 2011

Mohamed Salah
4 Min Read

“E-gypt at a Crossroads: How the Internet is Transforming Egypt’s Economy” is research commissioned by Google and conducted by Boston Consulting Group that was discussed in the roundtable held Sunday in Cairo.

Samir Al-Baha’i, the policy and government affairs manager for the Middle East and North Africa at Google presented the findings of the study, which explains how internet is affecting the Egyptian economy, at Sunday’s roundtable.

A decade ago internet was few and far between; internet users were less than a half million, or less than one per cent of the population. Since 2005 internet usage increased around 18 per cent annually.

In 2012 the number of Egyptians online reached 31 million, or 38 per cent of the population. 45 per cent of those were connected through portable devices, according to the research.

The study also revealed that youth constitute the majority of internet users in Egypt, more than half being under 25 years old. Additionally, 40 per cent of young users are considered the most active.

Al-Baha’i said the contribution of internet economics to the gross domestic product, or digital GDP, reached EGP 15.6bn in 2011. This was equal to 1.1 per cent of GDP and can be compared to health services (1.3 per cent) and education and petrol refinement (1.1 per cent). Digital GDP is expected to reach EGP 52bn in 2017, or 1.6 per cent of GDP.

According to the research, Egypt’s internet economics grows at a rate of 22 per cent annually, one of the highest in the world followed by Saudi Arabia and Turkey at 20 per cent, and the European Union at 11 per cent of annual growth rate.

However the research claimed e-business has not been properly exploited; only 0.2 per cent of the size of the retail market is online and 3 per cent researched purchases online and bought offline. There are untapped opportunities, according to Al-Baha’i, for small and medium enterprises (SMEs), especially in the fields of tourism and handcrafts, to grow online.

He said the size of potential business in the tourism sector is worth EGP 13bn, only 5 per cent of which is actually exploited; there is an increasing tendency among tourists around the world to research destinations and make reservations online.

The researchers came up with 3 recommendations to enhance the internet’s contribution to the Egyptian economy: unlocking the e-commerce potential in Egypt, enhancing the e-inclusion, and facilitating the participation of businesses in the online economy.

The size of e-commerce is projected to be EGP 14.5bn in 2017, 0.9 per cent of the retail market compared to 1.7 per cent in Turkey same year.

The study mentions fighting against illegal internet connections, which are nearly half of internet users in Egypt, will lower internet access costs eventually encouraging greater inclusion of new internet users.

Between 2007 and 2010, 55 per cent of SMEs who had a presence online achieved an annual growth rate greater than 20 per cent, while only 25 per cent of the companies who didn’t have activity on the internet reached that growth.

The Google representative said his company has an innovation stimulus agenda for the public sector to expand the outreach of e-governance to increase public interaction, raise transparency, and improve the access to information conforming to article 47 of the constitution that grants the right to data access and dissemination.

Al-Baha’i also mentioned Google’s involvement in the democratic transformation of Egypt, saying the internet giant will provide an internet platform for the elections and the dialogue on the constitutions.

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