The Suez Canal Economic Zone (SCZone) has undergone a strategic transformation in attracting foreign direct and qualitative investments in the technology and electronics manufacturing sector over the past period.
This shift is supported by its investment policies and incentives, managed according to a strategic approach, directing investments into sectors that enhance the country’s competitive advantages, fill financial and technological gaps, develop industries, provide more services, and increase the added value that the country contributes globally, alongside boosting the state’s foreign currency revenues.
Strategic Projects
In line with this direction, the zone has witnessed numerous strategic projects, the most notable being the Kemit Data Center with investments of $450 million. This center offers cloud computing services, IoT solutions, and digital transformation for regional and international markets, especially in Africa and the Middle East.
Additionally, many factories have been established for the production of household appliances, electronics, mobile accessories, and specialized factories for fiber optic cables. The zone also aims to localize manufacturing technology across various economic activities, including the industrial sector and new energy fields.
Investment Success
The SCZone has successfully attracted investments valued at $8.3 billion over the past three years, distributed across 274 diverse projects in industrial, service, and logistics sectors. This is part of a system that enhances the attraction of specific investments in promising sectors benefiting from the zone’s proximity to the East Port Said and the tax incentives and trade agreements it offers, alongside using the area as a platform for export to global markets.
A government document titled “Strategic Directions for the Egyptian Economy (2024-2030)” revealed that the government aims to establish a free zone for telecommunications and information technology within the SCZone, alongside submarine cable areas that handle 90% of data traffic between Asia, Europe, and Africa.
Analysts have indicated that the technology sector is seen as a golden opportunity for the region at all levels. This includes attracting direct investments in the sector by drawing major brands operating in electronics manufacturing and technology, given the international incentives provided by the zone.
Moreover, integrating technology into commercial and industrial activities in the region contributes to achieving the goals of the comprehensive digital transformation outlined in Vision 2030, enhancing human capital development, improving administrative, service, and financial efficiencies, and adopting modern concepts and tools that boost the SCZone’s global competitiveness.
Diverse Investment Attraction
It was noted that diversifying the attraction of technological investments and related industries in the SCZone will enhance the growth rates of the sector and localize many technological fields. There is a necessity to understand the sector’s requirements sustainably, keeping pace with the rapid technological developments on both global and regional levels, while also addressing the speed needed by companies to expedite the release of necessary materials and the incentives that enhance their operational and commercial processes.
Technological Valley
It is worth to mention that the SCZone includes a technology valley covering a total area of 72 square kilometers, aiming to localize industrial sectors compatible with the geographical nature and resources of the area, such as the availability of silica sand, to create a comprehensive industrial community based on high-tech industries that interact through investment, education, and scientific research.
Egypt seeks to confirm its position as a major hub for electronics manufacturing in the region, which enhances its ability to attract investments in multiple fields, such as mobile manufacturing, household appliances, semiconductors, and artificial intelligence. The public investments directed towards the telecommunications and information technology sector in the 2025-2026 plan amount to approximately 13 billion EGP, of which 9 billion EGP is funded by the state budget. The government also targets digital service exports worth $9 billion by the end of 2026.
Leadership Insights
Walid Gamal El-Din, CEO of the SCZone, stated that the promotional efforts made by the authority over the past thirty months and external promotional tours are bearing fruit in localizing industry across various industrial zones affiliated with the authority. These efforts have successfully contributed to the development of the East Ismailia industrial zone and the technology valley, noting that upcoming projects in the technology valley will provide quality job opportunities, especially in high-tech fields.
He explained that the development of the technology valley represents an empowerment of all the economic tools enjoyed by the authority, including four industrial zones and six seaports that complement each other to link manufacturing and production areas with targeted markets, support global supply chains, and achieve the authority’s vision of localizing industry in targeted sectors.
Gamal El-Din emphasized that the SCZone operates under a comprehensive digital transformation strategy that adopts modern concepts and tools to enhance the global competitiveness of the economic zone. This includes launching a comprehensive platform for investor services aimed at providing innovative digital solutions that improve the efficiency of administrative, service, and financial processes, simplify them, and automate procedures, document management, and developing an electronic portal for investors, along with reports for decision-makers.
On her part, engineer Hala El-Gohary, former CEO of the Information Technology Industry Development Authority (ITIDA), noted that economic zones are among the most important mechanisms used globally to attract qualitative foreign investments, create job opportunities, support exports, and reduce reliance on imports.
These are all primary targets of the Egyptian state, which enjoys advantages such as tax and customs exemptions and flexible investment laws. She highlighted that the SCZone is currently the most important and largest economic area in Egypt due to its proximity to an international shipping lane and its direct link between Asia and Europe.
Export and Currency Goals
Egypt targets $145 billion in exports annually, with a goal of doubling foreign currency resources to $300 billion. Given that the telecommunications and information technology sector is strategic and promising, the existence of a dedicated electronics and information technology zone will provide advantages and help address challenges facing the industry, such as customs and tax-related issues.
To achieve these targets, a focus on other challenges related to regional and international competition, research and development activities, and operational costs is essential.
Indeed, there are challenges relating to legislation and laws specific to the information technology sector that need to be addressed to achieve the desired growth in this industry. Additionally, government support programs and incentives must be compared with countries that have seen notable growth in this field, such as Estonia, Slovakia, Romania, and Ireland, which have made significant progress in this industry despite having smaller populations compared to Egypt.
It is important to note that the sectors within this industry are diverse, each with specific requirements. For instance, the integrated circuits and semiconductor manufacturing industry needs different skills, infrastructure, and logistical support compared to software development or innovation in fields like artificial intelligence and the Internet of Things. Some of these fields benefit from economic zones, particularly the SCZone, while others have different requirements.
Attracting Technology Companies
Aida El-Sebaan, a board member of the General Division for Digital Economy at the Federation of Egyptian Chambers of Commerce, stated that the SCZone should be utilized to attract information technology companies or companies manufacturing electronic products comprehensively, with unified visions at both the national and private sector levels to support the region through implemented policies and promotional strategies for the Egyptian technology sector.
She indicated that rather than thinking about establishing a zone away from the Suez Canal for these industries, this area should be optimally utilized since it has not yet been fully exploited. Part of it should be leveraged for technological and electronic industries, and if there is a need to adapt laws to suit the nature of work for information technology and electronics companies, this should be addressed, especially since there are already businesses operating in the area, which can be built upon to attract more companies.
El-Sebaan added that a thorough and comprehensive examination is needed to understand the requirements of information technology and electronics companies, as each has different needs, preparations, and infrastructure. Laws must be tailored to incentivize such companies to establish themselves in the economic zone.
For example, some companies require quick release of raw materials needed, especially since some are subject to the National Telecommunications Institute as a release authority for certain materials and tools that have mandatory laws, such as specific types of cameras and GPS devices, among other essential items for many companies. Thus, it is necessary to keep pace with technological developments and the speed required by companies to expedite the release of necessary materials, especially since certain materials have specific release periods.
Listening to Company Needs
She pointed out that it is crucial to listen to the requirements of the companies themselves and present them clearly to decision-makers to expedite appropriate decisions and overcome any difficulties these companies face. This aims to provide real value that attracts them to operate in the economic zone, making them feel that there is a return on investment from their presence in the zone and in Egypt overall. These are all incentives sought by companies that stimulate growth in technology fields, in addition to tax and customs incentives and facilities that assist companies in their operations and growth.
Samah El-Morsi, an assistant professor of economics at Cairo University, stated that special economic zones are a primary engine for driving economic growth, not only for countries but also globally. To achieve their intended goals, these zones must be planned meticulously, managed according to a studied approach, and directed towards investments that enhance the country’s competitive advantages, aligning with the state’s strategic objectives.
She noted that special economic zones can take various forms, including traditional ones like industrial zones and free zones, as well as new models such as specialized economic zones for innovation and sector-specific zones like those for technology, research and development, tourism, and the environment, among others. The SCZone combines these forms of zones, enhancing its operational pathways and ultimately serving the technological transformation goals that Egypt aims for.
El-Morsi indicated that the SCZone, with this philosophy, will contribute to attracting foreign direct investments that can fill financial and technological gaps and increase the added value that the state contributes globally. Additionally, this will enhance the state’s foreign currency revenues, resulting in increased local economic growth rates and the localization of more industries, allowing the state to benefit from its economic resources and strategic location while reducing the risk of economic crises.
She also pointed out that the new jobs created in the zone would redirect students’ interests toward market-relevant specializations for these zones. Residents in cities adjacent to the technology investment areas will be motivated to study technical sciences, contributing to human capital development and addressing unemployment issues, benefiting citizens and the economy as a whole.
El-Morsi emphasized the importance of designing customs authorities in the region in accordance with the objectives and organizational structures of special economic zones to enhance the benefits derived from them. This can be achieved when customs authorities access sufficient information about imports and exports, establish databases, and activate advanced technological tools that facilitate and expedite the operations of special economic zones and the oversight role of customs authorities.
