Promoting Education Investment
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- 19 Sep 2022
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While the government’s State Ownership Policy Document has dubbed the education sector both in the K-12 years and in university education “strategic” and thus has said it will not be one of the sectors that it considers exiting from, it has nevertheless set out a vision for private players to have a greater role in the sector.
The education sector is seen as an attractive investment opportunity for investors, and while it is at the top of the list of the sectors that the government plans to inject public investment into, it is also open to the private sector in the K-12 and higher-education levels, said a number of investors in the sector.
In 2021, former minister of education Tarek Shawki said that Egypt needed LE130 billion in investments to build 250,000 fresh classrooms to address overloaded capacity. The number of private universities and higher-education institutes has climbed by 100 per cent over a seven-year period to reach 36. There are now 27 public universities.
Bassam Al-Shanawani, an investor in the education sector, said that the State Ownership Policy Document targets 11 per cent of the investment needed for the sector coming from the private sector while the state will cover the remaining 89 per cent.
He said that the significant presence of the state in the sector in terms of finance, logistics, and investment was important because it was strategically important. But the 11 per cent target for private investment was not enough in the light of the high number of new entrants to the universities each year, he said.
There are 25 million students enrolled in K-12 education each year in Egypt. Meanwhile, there are around three million students entering the universities annually after finishing secondary school.
During the cabinet’s community dialogue with the education sector, the participants called on decision-makers to raise the incentives for the private sector to establish new universities and open branches of international universities across Egypt.
This represented good investment opportunities and would help deal with the increasing demand for a good university education, they said.
Al-Shanawani said that the sector was experiencing major challenges that need the support of the private sector to address through its management experience and the investment it can provide.
The public-private partnership (PPP) model is widely used in education and is an approach used by government to deliver quality services to the population by using the expertise of the private sector. Under a PPP agreement, the private sector would manage schools with substantial financial assistance from the government, for example.
“Investing in the education sector in Egypt is promising, provided that the government provides the required facilities and utilities to establish partnerships under the PPP model,” Al-Shanawani said.
In 2021, the government pushed for increasing private-sector investment in the education sector. Besides abolishing the 20 per cent limit on foreign investors’ ownership of schools, it also launched a number of joint educational platforms between the government and the private sector.
New private schools and universities opened up, and the private sector expanded in technical education.
In 2021, the Sovereign Fund of Egypt (SFE) launched the Lighthouse Education platform with projected capital of LE1.7 billion in partnership with number of local banks and other entities.
The platform will channel investments to K-12 education in Egypt. It has managed to collect LE500 million in investment funds and aims to increase its capital to LE1.75 billion by the end of 2022.
Chair of the SFE and Minister of Planning and Economic Development Hala Al-Said said that the expansion of investment in the education sector by the SFE, along with private-sector development partners, comes as part of the state’s vision to achieve the UN Sustainable Development Goals (SDGs).
Mohamed Al-Hamami, a member of the House of Representatives, the lower house of Egypt’s parliament, and head of the education committee at the Egyptian Businessmen’s Association, told Al-Ahram Weekly that the private sector is expected to support the state’s efforts in providing affordable and quality education in schools and universities across Egypt. Read More...
