Egypt’s Handset Market Set to Double by 2031 on Local Assembly Push
This shift is a direct outcome of the government’s “Egypt Makes Electronics” initiative, which raised tariffs on finished devices while easing taxes on imported parts to encourage domestic production.
Egypt’s handset market is entering a phase of rapid expansion as the country accelerates local mobile phone assembly, backed by supportive government policies and rising consumer demand. According to a new Fitch Solutions forecast, handset sales are expected to grow from USD 2.5 billion in 2025 to more than USD 4.8 billion by 2031, representing a compound annual growth rate of 11.4 percent.
Initially led by local firm SICO, which introduced the Nile X smartphone in 2019, Egypt’s assembly sector has since attracted major global manufacturers. Samsung produced its first “Made in Egypt” Galaxy A13 in 2022, while Oppo, Vivo, Xiaomi, and Nokia through HMD Global partnerships have all established assembly operations. The sector now boasts an installed production capacity of 11.5 million units annually, supported by more than USD 87 million in investment and creating over 2,000 jobs. Annual output has risen significantly, reaching around 3 million units in 2024 compared to just 1.5 million in 2021. However, capacity utilisation remains low at 26 percent, although Fitch forecasts this to climb to 80 percent by 2031. Even then, a production gap of about 3.2 million units is expected to persist.
The drive to localise handset manufacturing has dramatically reshaped Egypt’s trade flows. Imports of finished mobile phones fell from USD 1.8 billion in 2020 to just USD 54 million in 2024, while imports of components surged to supply the expanding assembly lines. This shift is a direct outcome of the government’s “Egypt Makes Electronics” initiative, which raised tariffs on finished devices while easing taxes on imported parts to encourage domestic production.
Macroeconomic dynamics have reinforced this transition. The Egyptian pound’s depreciation, falling from under EGP 20 per US dollar in 2022 to more than EGP 50 per dollar by 2025, has made imported devices prohibitively expensive, strengthening the case for local assembly. Inflation, which spiked during the 2022 to 2024 crisis, is projected to ease to an annual average of 6.5 percent between 2025 and 2031. At the same time, GDP growth is forecast to average 4.3 percent. These conditions are creating a stable, price-sensitive market in which demand for low-cost smartphones under USD 150 is expected to grow strongly.
Despite these advances, Egypt’s handset industry still faces considerable challenges. Persistent supply chain bottlenecks, customs delays, and foreign exchange shortages continue to weigh on production. Rural incomes remain limited, restricting smartphone penetration in less urbanized areas, while regional geopolitical risks such as Red Sea shipping disruptions and broader instability in the Middle East and North Africa present further uncertainties.
Even with these constraints, Egypt is increasingly positioning itself as a future electronics hub for Africa and the wider MENA region. Policymakers and industry stakeholders are courting additional foreign investment, with reports suggesting that Apple has been approached about potential iPhone assembly in the country. If Egypt can close its production gap, reduce inefficiencies, and enhance competitiveness, the sector could not only meet domestic demand but also expand exports, while advancing digital inclusion and strengthening the national economy.
