The Pulse: 7th Edition Egypt Healthcare Overview

23
Nov

The Pulse: 7th Edition Egypt Healthcare Overview

Colliers International is pleased to present the 7th edition of our healthcare series this time focusing on Egypt.

The report provides a brief snapshot of the key factors impacting Egypt healthcare and its future outlook. The Egypt healthcare sector is required to evolve at a very fast pace and investors and operators of healthcare facilities need to make challenging decisions. 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: The country has an estimated population of 91.5 million in 2015, which is expected to reach 151 million by 2050.  Egypt had around 24 million people over the age of 40 in 2015, this is expected to increase to almost 55 million by 2050. A changing age profile will have significant impact on demand for healthcare services and expenditure.
  • Lifestyle Diseases: As a result of urbanisation and the rise of disposable income, there has been an increase in chronic diseases such as diabetes, coronary problems and other obesity-related illnesses. Recently the rate of diabetes related illnesses has witnessed an unprecedented increase in the MENA Region. In 2015, in Egypt obesity prevalence rate among adults is 33.1%, higher than in some developed countries, and also one of the highest in the MENA region. The prevalence of hypertension among adults in Egypt stands at 24.9%, which is one of highest in the world.
  • Increasing Insurance Penetration: At present approximately 57% of people are insured, mainly with two publicly administrative insurance companies. 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.
  • Medical Tourism: Egypt has earned a strong reputation within the region of having quality doctors and infrastructure at a cost effective fees and with easier visa access when compared to some of the regional competitors which has helped the country to earn a reputation of a medical tourism hub in the region. Medical tourists, coming to Egypt, are mainly from North, East and West Africa & GCC.
  • Clinical & Beauty Related Treatment: The growth in the middle and upper class income have 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.

Conclusions:

  • Based on above factors the demand of healthcare services expected to grow continuously with Egypt requiring at additional 26,000 (at 1.5 beds / 1,000 population) with new investment of USD 6 to USD 9 billion to 76,000 (at 1.5 beds / 1,000 population) beds, with new investment of USD 16 to USD 21 billion by 2020. The demand is expected to reach to 102,000 additional beds (an investment of USD 22 to USD 35 billion) to 178,000 new beds (an investment of USD 38 to USD 60 billion) by 2050.
  • Whereas, the total number of doctors and dentist required by 2020 is 36,000 and 8,000 respectively (an investment of USD 300 to USD 700 million) which expected to increase to 203,000 and 40,000 (an investment of USD 1.7 to USD 3.6 billion) by 2050.
  • On overall basis in Colliers opinion the government is expected to look PPP as 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 as market the mature Colliers also expect that investors looking beyond traditional funding options, such as debt and equity, to explore emerging options, such as OpCo / PropCo, or a Joint Venture (JV) with an investor and REITs.

Download the full report here

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