Egypt is quickly repositioning itself in global IT outsourcing as businesses revise sourcing in response to geopolitical shifts, talent shortages, and the rise of cloud and artificial intelligence (AI-)driven models.
Viewed as a secondary delivery location, the country is now gaining traction among both multinational service providers and smaller, specialist consultancies. This shift from a peripheral role to a significant player is being driven by market forces and changing industry needs. Industry observers point to a marked acceleration over the past 18 months, with new entrants establishing delivery centres and expanding local hiring pipelines.
For Ahmed (Kal) El Kalagy, founder and CEO of Saqaya, a consultancy active in the UK and Egypt, this shift reflects changes in the global market and Egypt’s growing capabilities: “Egypt has for some time been an untapped gem. What we are seeing now is a transition into a more active, competitive outsourcing market with a broader mix of players.”
Large enterprises, including telecoms and professional services firms, have historically anchored Egypt’s role in the global services economy with captive centres. These operations showcased the viability of the local talent base but did not foster a broad ecosystem of export-focused outsourcing providers.
Now, the market is closing that gap, with demand-side pressure and supply-side readiness driving growth. On the demand side, organisations diversify delivery risk following disruptions in Eastern Europe, particularly in Ukraine, Belarus and Russia. On the supply side, Egypt provides workforce scale and cost efficiency that established nearshore markets find difficult to replicate.
With more than 120 million people and around 140,000 STEM graduates annually, Egypt’s talent pool is deep. Salaries are far lower than in Central and Eastern Europe, and proximity and time zones help European collaboration.
The workforce’s technical profile is also evolving. Kal noted that Egyptian engineers now target modern tech stacks, Java for the backend, JavaScript for the frontend, Flutter for mobile, and emerging AI paradigms.
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“Egypt has for some time been an untapped gem … we are seeing a transition into a more active, competitive outsourcing market”
Ahmed (Kal) El Kalagy, Saqaya
“There is a strong bias towards newer technologies,” he said. “In areas such as AI and agentic development, the capability is developing very quickly.”
This workforce alignment with contemporary technology trends gives Egypt an advantage as enterprises prioritise cloud-native architectures, platform engineering and automation. The shift towards distributed, cloud-based delivery models further loosens enterprise reliance on traditional nearshore locations, enabling organisations to consider a wider range of geographies.
Cyber security and compliance are also contributing to Egypt’s appeal. The presence of global firms delivering standards-based services, including ISO-aligned processes, has helped to establish baseline credibility in regulated environments. This is particularly relevant for sectors such as financial services, where outsourcing decisions are closely tied to governance and risk frameworks.
Government policy is playing a supporting role. Egypt has identified the IT and outsourcing sector as a strategic economic priority, investing in digital infrastructure, skills development and industry promotion through entities such as the Information Technology Industry Development Agency (ITIDA). These initiatives aim to increase export revenues and position the country as a hub of the knowledge economy.
However, the market is not without its limitations. Despite growth in modern technologies, skills shortages persist in legacy technology domains, particularly those associated with older banking systems. While this reflects the industry’s forward-looking orientation, it may constrain opportunities in certain segments of the outsourcing market.
Service providers are testing new delivery models. Saqaya, for example, runs a Cairo engineering hub and UK leadership, bridging culture and operations between clients and offshore teams. The model emphasises governance frameworks, standardised methodologies and integrates with client-side processes – areas where offshore delivery has historically faced challenges.
“Clients expect teams to operate in line with their internal standards,” Kal said. “That means aligning not just on technology, but also on ways of working, communication and delivery discipline.”
Saqaya’s clients span fintech, proptech, and gaming, mirroring broader outsourcing trends in which product and platform development lead. Egypt’s outsourcing growth depends on sustaining talent development, cost competitiveness and advancing to higher-value services. Fast-growing AI work may accelerate this, if paired with targeted skills and research investment.
For now, Egypt offers a large, cost-effective and capable talent pool that meets modern software development needs. As companies rebalance global delivery, Egypt is set for a larger role.