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ICT role in trade facilitation

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Increasing B2B portals in Egypt and the Middle East and the promising private ... Egypt has also succeeded in adopting advanced ICT technologies and applications ... – PowerPoint PPT presentation

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Title: ICT role in trade facilitation


1
ICT role in trade facilitation
  • Egypt Case
  • June 2007

2
Contents
  • Introduction
  • ICT regulatory environment
  • ICT Facts Figures
  • Trade Profile
  • Government role in trade facilitation
  • SMMEs utilization of ICT
  • SMMEs utilization of ICT in business
  • Weak utilization of e-trade
  • Benefits of using e-commerce
  • Difficulties of using e-commerce
  • E-trade applications in Egypt
  • Measuring the effect of internet use on Egyptian
    exports
  • ICT role in trade facilitation - SWOT analysis
  • Conclusions
  • Recommendations

3
Introduction
  • Egyptian ICT sector is currently transforming its
    role to act as the cornerstone in the economic
    development process through modernizing different
    socioeconomic sectors.
  • The utilization of ICT in facilitating trade and
    increasing exports is a priority policy for Egypt
    which looks forward to boost its exports as a
    means of increasing growth rates and welfare of
    the economy as a whole

4
ICT regulatory environment
  • Egyptian ICT regulatory environment is business
    friendly as it ensures the competitiveness and
    freedom of the sector and its capacity to adapt
    to global challenges and attractive for
    investment opportunities.
  • Telecommunications Law.
  • WTO Basic Telecom Agreement.
  • Intellectual Property Law.
  • E-signature Law.
  • Cyber crime law.

5
ICT Facts Figures
  • Continuously growing sector with annual growth
    rate exceeding 25
  • An increasing share in the GDP-more than 3
  • A leading economic player with 16 of total
    investments in (2005/2006) 113 billion EGP)
  • Annual revenues exceeding 3 billion US

6
Trade Profile
  • Volume of exports 18 billion US, mainly Oil and
    Oil products.
  • Volume of imports 30 billion US, mainly
    equipment and capital goods.
  • High trade deficit and need for promoting exports
    through non-traditional marketing tools.
  • Major trade partners EU USA, need to expand
    geographic reach and diversify exports especially
    SMMEs exports.

7
Government role in trade facilitation
  • a) Customs Reforms
  • Modernizing customs services and applying ICT
    applications for the interest of different
    stakeholders.
  • Installing new system called the "Pre-Arrival
    Release" which meets the importers' needs and
    consequently leads to facilitate international
    trade movement.
  • Developing "Account Management Service (AMS)
    for large importers who have no record of
    infractions and who are compliant with customs
    systems and procedures.

8
Government role in trade facilitation
  • b) Freedom of Transit
  • The Customs Authority is planning in the near
    future to introduce an electronic system that
    removes paper handling to the extent possible,
    and provides interconnectivity between customs
    offices in order to facilitate the movement of
    goods in transit through Egyptian ports.

9
SMMEs utilization of ICT
  • An analysis was conducted to highlight the SMMEs
    utilization of ICT in conducting business, to get
    a picture about the dependence on private
    companies in various economic sectors on ICT and
    the degree to which we can consider that there is
    a high level of ICT use to the extent that
    facilitates the operations of surveyed
    companies.
  • The survey was conducted among 1821 companies
    selected across all Governorates which accounts
    for average capital from 20 k to 5 million LE.

10
SMMEs utilization of ICT
  • Companies surveyed were classified as follows
  • Micro enterprise 0-9 employees
  • Small enterprise 10-49 employees
  • Medium enterprises 50-249 employees
  • Large enterprises 250- -

11
SMMEs utilization of ICT
12
SMMEs utilization of ICT in business
  • 96 of the companies reported having fixed
    telephones, while 33 of companies reported
    having mobiles
  • 65 of companies reported having a fax at work

13
SMMEs utilization of ICT in business
  • 63 of companies reported having Computers,
  • 100 of small and medium enterprises were having
    PCs,
  • Only 40 of micro enterprises reported having a
    PC.
  • uses of PCs were mainly for
  • Typing documents 88
  • Administrative development 52
  • Surfing the internet 41
  • Monitoring and following up activities 37
  • Training 19

14
SMMEs utilization of ICT in business
  • 38 of the companies reported using the internet
    directly or indirectly

15
Weak utilization of e-trade
  • Around 10 of businesses in the survey involved
    in e-commerce 177 enterprises were receiving
    orders from foreign partners while 114
    enterprises were sending orders asking for
    imports.
  • Volume of exports via the net is undefined

16
Benefits of applying e-commerce
17
Difficulties of applying e-commerce
18
E-trade applications in Egypt
  • There are currently numerous web sites that
    combines the concept of e-commerce where it acts
    as electronic catalogues which can be browsed by
    the customer and the product would be shipped to
    his place and payment take place on different
    bases of which most common is Cash on Delivery
    (COD).

19
E-trade applications in Egypt
  • Currently there is a problem in estimating the
    accurate volume of e-commerce in Egypt and some
    recent studies have only referred to B2C activity
    to be measured among the society and it was
    nearly 6 of internet users who actually make
    purchases on the internet.
  • Recent estimates of exports volume through the
    internet for the year 2006 does not exceed 10
    25 million US according to the sources of the
    international trade point and the private sector
    companies.

20
E-trade applications in Egypt
  • Egyptian private sector has also a reasonable
    presence on international trade portals or global
    B2B portals mainly
  • "Alibaba",
  • "b2b trade-holding",
  • "tbc world", "EC 21"
  • and "tradexpro".

21
E-trade applications in Egypt
  • The average number of Egyptian websites on each
    portal was 1723 sites this was nearly 1.3 of
    total number of websites on business portals.
  • As for the percent of the Egyptian websites in
    comparison to African websites it was nearly 35
    on "Alibaba" and around 20 of all African
    websites on "b2b trade-holding".

22
E-trade applications in Egypt
  • The study had identified an attempts to construct
    a competitive global Egyptian B2B portal to
    be"Trade-egypt.com" which is an example of the
    private sector initiatives to promote Egyptian
    exports internationally
  • This portal acts as a one stop shop for all the
    needs of the business community (building
    websites, information brokerage, e-marketing
    campaigns,...etc.) assisting them to
    successfully exist within the global marketplace.

23
E-trade applications in Egypt
  • Another e-trade website is SPEEDSEND which acts
    as a B2B e-procurement solution for enterprises
    helping them saving time and financial resources.
  • Currently SPEEDSEND has managed to achieve
    phenomenal growth in revenues thus being able to
    attract foreign partners to be equity holders for
    15 of the business.

24
E-trade applications in Egypt
  • As an example of specialized trading website
    EgyBiz.com is the online marketplace
    specialized in trading Egyptian granite and
    marble by utilizing the highest technology in the
    field of web to finalize the trades and showcases
    of products through out the world.
  •  EgyBiz.com provides the Egyptian stone traders
    several services especially in the marketing
    field, to capture international leads that are
    concerned about Egyptian stones.

25
Measuring the Effect ofInternet use on Egyptian
Exports
  • Recent literature has proved that the internet is
    positively correlated with exports from
    developing countries to developed countries.
  • An econometric model was applied to assesses the
    extent to which internet use affect Egyptian
    exports taking into account the endogenous
    variable of internet use.
  • The results was that there is no correlation
    between the internet users as share of population
    and the exports of Egypt.

26
SWOT analysis
ICT role in trade facilitation
27
SWOT analysis
ICT role in trade facilitation
28
Conclusions
  • Egypt has proven to take serious steps towards
    building a modern and sophisticated ICT sector
    through the sound mix of regulatory and
    technological components, Egypt is doing very
    well as for creating a conducive climate for ICT
    companies.
  • Egypt has also succeeded in adopting advanced ICT
    technologies and applications and providing the
    services of ICT to a broad range of people and
    other socioeconomic sectors, meanwhile it is
    obvious that the external trade sector is still
    far behind what had been achieved in the ICT
    front,

29
Conclusions
  • The above opportunity can also be further
    developed by exploiting the current framework for
    electronic commerce developed by MCIT and which
    is considered to be aligned to national
    political, social and legislative environment and
    compatible with the competitive global arena,
    also it should get the benefit of the keen
    efforts that are conducted currently to provide
    relevant up-to-date technology required for doing
    e-commerce transactions

30
Recommendations
  • Providing technical and financial support for
    Egyptian business portals (B2B,B2C) necessary for
    increasing the effectiveness of the private
    sector companies working in this field through
    appropriate technical consulting and training in
    order to increase its customer base
    internationally and thus increasing exports and
    economic growth.

31
Recommendations
  • Reassessing the role and structure of
    international trade point and transferring its
    promotional role to a supportive role that
    provides a relevant mix of services upon the
    request of exporters through a national
    orientation towards using internet in trade,
    especially that the private sector is playing an
    active role currently in building websites and
    utilizing ICT in trade without the need for
    traditional service of ITP.

32
Recommendations
  • Building capacity within Commercial
    Representation Offices in main partner countries
    to promote ICT sector and be aware of the
    importance of ICT sector and its impact on other
    sectors and mainly foreign trade increasing hard
    currency receipts and helping improve Balance of
    Payments.

33
Recommendations
  • Increasing awareness among exporters about the
    role of ICT in facilitating their business
    through cooperation between MCIT (through its
    specialized programs i.e ITAC program) and
    MFTI (through the IMC), this will make use of IT
    solutions or products to increase productivity
    and enhancing performance of the whole
    international trade sector.

34
Recommendations
  • Implementing capacity building programs on ICT
    applications in trade supported by MCIT,
    including (website development, web marketing
    techniques, in addition to a scheme for upgrading
    technical capacities of exporters to use ICT and
    helping exporting companies to acquire advanced
    technologies (software/hardware).

35
Recommendations
  • Establishing a tracking system for payments for
    exports that take place over the internet through
    cooperation between Central Bank of Egypt,
    Ministry of ICT and Ministry of Foreign Trade
    Industry, this will include only transactions
    that entail transfer of money through corporate
    and purchasing cards.

36
Recommendations
  • Establishing an "Electronic Exporters
    Association" for companies that export using the
    internet in order to create a positive culture
    about electronic trading and facilitate the
    process of collecting information about this
    activity and solving problems that might be
    facing companies conducting e-trade.

37
Recommendations
  • Launching a national prizes and awards scheme for
    top exporters using the internet, and top ICT
    products exporters through a PPP model including
    MCIT, MFTI, exporters' associations, business men
    associations, in order to encourage members to
    use internet and other ICT applications in trade

38
Recommendations
  • Maintaining current quality and cost effective
    ICT infrastructure and working with international
    partners to continuously develop infrastructure
    and realize enhanced and low cost services.

39
Recommendations
  • Designing a national marketing strategy for
    Egyptian exports that emphasizes the use of
    internet as a tool for marketing, this might
    include as well designing a unified message to be
    published on all Egyptian websites as a brand for
    Egypt.

40
Recommendations
  • Launching Online Disputes Settlement Mechanism to
    encourage the Egyptian companies to do electronic
    business inside and outside the country. The
    importance of such project, not only reducing
    time and costs incurred but also it provides
    companies with prevention rules and trust mark to
    decrease their exposure to disputes and prevent
    their businesses from any kind of hacking.

41
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