Import restrictions push cell phone companies to manufacture locally

Mohamed Alaa El-Din
4 Min Read

It seems that the restrictions on the import of mobile devices and the requirement to open documentary credits before importing shipments have prompted companies to manufacture locally in an attempt to not lose the Egyptian market, which has been suffering from a severe shortage of mobile devices since the end of last March.

An official source in the cell phone market said that the importance of the Egyptian market prompted some companies to start planning to manufacture mobile devices in the Egyptian market, noting that the Vivo factory is the beginning, but there are more companies that will soon start following suit.

The source explained that local manufacturing is important and in line with the state’s strategy to deepen the local industry, but it is not sufficient alone to meet the needs of the local market, and therefore import restrictions on cell phones must be lifted, especially as it is a strategic commodity that plays an important role in achieving the state’s digital transformation plans.

The source also indicated that no matter how efficient the local manufacturers are, they alone cannot meet the needs of local consumption, especially since this industry needs tens of years to establish itself.

However, they believe that the development of infrastructure in the Egyptian market and the improvement of the investment climate contributed to changing international companies’ view of the Egyptian market from a mere consumer market to a market that provides added value through a shift in manufacturing technology.

The Central Bank of Egypt (CBE) issued a set of new import regulations at the end of last February that came into effect in March, including doing away with collection documents in the implementation of all import operations and working with documentary credits, however, collection documents are allowed for production requirements.

Since the end of March, the cell phone market has not witnessed the entry of new goods — except for some brands in a limited way — according to dealers and merchants.

For his part, Walid Ramadan — Member of the Cairo Chamber of Commerce’s Board of Directors and VP of the Chamber’s Mobile and Communications Division — said that manufacturing is an important issue for the Egyptian market, but it cannot unite to meet the needs of the local market in light of the government’s direction to achieve the digital transformation plan.

He believes that the coming period will witness the rise of some local manufacturers, which is good for the Egyptian market, but it is not enough.

Ramadan also believes that it is necessary to include mobile devices, as well as spare parts for goods that receive the exception for opening documentary credits, especially since cell phones are an important tool in implementing Egypt’s vision towards digital transformation.

He explained that the Cairo Chamber of Commerce submitted a memorandum to the governor of the CBE accompanied by a study on the importance of mobile devices to the Egyptian market and the negative effects of restricting its import.

Furthermore, Ramadan said that according to the study completed by the Chamber, there are more than 96.4 people who use mobile phones in Egypt, 17 million of which use electronic wallets via cell phones and 66.7 million of which use the internet via a mobile device.

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