Egypt; The promising land of Healthcare Investment
Egypt is the most populous Arab country in the world with 94.7 million residing in Egypt and 9.5 million living abroad. With a population growth rate of 2.2% per annum, this will continue to fuel demand for infrastructure services with a direct impact on the evolving urban landscape. Greater Cairo, which includes Giza, Cairo, and 6th October City, is home to almost a population of 17.2 million.
With 1.5 beds per 1,000 population (Recorded in 2014), the healthcare sector in Egypt lags both quantitively and qualitatively in the provision of healthcare infrastructure and services. The healthcare system also needs to treat emerging diseases and illnesses associated with a modern and urban lifestyle, partially due to the growing middle-class population.
Due to such challenges, the Egypt healthcare sector is required to evolve at a rapid pace. In the coming years, the healthcare system needs to improve both quantitively and qualitatively to meet with the existing and potential demand gap, thus it will continue to offer opportunities for investors/operators. Key factors that make Egypt’s healthcare market attractive are:
Growing Population and Changing Profile:
The country has an estimated population of 91.5 million (recorded in 2015), which is expected to reach 151 million by 2050. In 2015, Egypt had around 24 million people over the age of 40; this is expected to increase to almost 55 million by 2050. A changing age profile will have a significant impact on the demand for healthcare services and expenditure.
Analysing the demographic trends, it is estimated that Egypt’s population will change from Baby Boomers to Generation X, Y & Z. This shift would impact disease patterns as well as the type of healthcare services required. There was a significant change in Egypt’s population between 1960 and 2015 and it is expected to change even further between now and 2050.
Age group: 0-19
The total population between the age group of 0 to 19 years will increase to 50.9 million in 2050. This creates demand for healthcare facilities and services relating to mother and childcare (obstetrics, gynaecology, paediatrics, etc.), by 2050, around 85 million new babies will be born in
Age group: 20-39
The total population between the age group of 20 to 39 years will increase to 45.3 million in 2050. Among this age group chronic diseases, such as heart disease, irritable bowel syndrome, chronic obstructive pulmonary disease and some types of cancer develop which have a long-lasting impact on demand for healthcare.
Age group 40-59
The total population between the age group of 40 to 59 years will increase to 31.8 million in 2050 having a sharp rise in healthcare demand, with 80% of healthcare requirements typically occur after the ages of 40-50. 60 Years & above: One of the biggest changes in Egypt’s population profile is the change in life expectancy, which has increased from 46.8 years for males and 49.3 years for females in 1960 to 69.2 years and 73.6 years for males and females respectively in 2015. In 1960, in Egypt, the total number of the population over 65 years was just above 1 million. This increased to 4.8 million in 2015 and is expected to be almost 16 million by 2050. These changes will lead to a growing requirement of long-term care (LTC) facilities. Egypt currently needs around 19,000 beds dedicated for LTC, this is expected to reach almost 64,000 LTC beds by 2050. Factors Helping Healthcare Thrive In Egypt:
Increasing Insurance Penetration:
At present approximately 57% of people are insured, mainly with two publicly administrative insurance companies. Back in 2016 a new law, significantly expanding insurance coverage for all Egyptian citizens, was submitted to the government for consideration. This is expected to boost the domestic healthcare market.
Egypt has earned a strong reputation within the region of having quality doctors and infrastructure at cost-effective fees and with easier visa access when compared to some of the regional competitors which have helped the country to earn a reputation of a medical tourism hub in the region. Medical tourists, coming to Egypt, are mainly from the GCC and also North, East and West Africa.
Clinical and Beauty Related Treatment
The growth in the middle and upper-class income has resulted in a growing demand for beauty and cosmetic related treatments, such as body contouring, anti-aging, lipoplasty (liposuction), eyelid surgery, breast implants, rhinoplasty, facelifts, Botox, medical spas, hair transplant, etc. Increase in
Private Sector Share
The government is expected to encourage the private sector to take a leading role in providing healthcare services, as the public-sector struggles to keep pace with the burgeoning population’s healthcare demand. The demand for healthcare services is expected to grow continuously with Egypt requiring an additional 26,000 beds (at 1.5 beds / 1,000 population) with an investment of $6 billion to $9 billion. It further requires about 76,000 (at 1.5 beds / 1,000 population) beds, with new investment of $16 billion to $21 billion by 2020 while the demand is expected to pick up to 102,000 additional beds (an investment of $22 to $35 billion) to 178,000 new beds (an investment of $38 billion to $60 billion) by 2050.
The total number of doctors and dentists required by 2020 is 36,000 and 8,000 respectively (at an investment of $300 to $700 million) which is expected to increase to 203,000 and 40,000 (an investment of $1.7 to $6 billion) by 2050.
Keeping the current economic scenario in mind, the government is expected to look at PPPs as a way of funding the surging healthcare demand, which offers the private sector, both locally and internationally, an opportunity to enter into Egypt’s lucrative healthcare sector. While market matures, Colliers expects investors to look beyond traditional funding options, such as debt and equity, to explore emerging options