Egypt’s Healthcare Sector

Egypt has increased public spending on health care to around 3% of GDP, according to the state budget for the current fiscal year (FY) 2020/21 which was issued by the Ministry of Finance. This is still relatively low compared with the OECD average of 9% and even the Middle East average of 5%. The Economist Intelligence Unit expects healthcare spending as a percentage of GDP to increase to 4.6% in 2023, amid the relatively strong underlying growth of the Egyptian economy.

Comprehensive Health Insurance Law

In January 2018 the president, Abdel Fattah el-Sisi, ratified a new Comprehensive Health Insurance Law setting up a universal healthcare system that is to be implemented gradually between 2018 and 2032, at an estimated initial cost of E£140bn (US$8bn). About 800,000 people are expected to benefit from the scheme, which will be implemented in six phases.

Mr. Sisi was re-elected in March 2018 for another four years, and is likely to stay in office until 2030, after the parliament passed amendments extending presidential terms. I therefore expect the healthcare policy environment to remain stable which is a good sign. The new constitution, which was passed in January 2014, stipulates that the state must spend a minimum of 3% of GDP on healthcare every year in addition to private healthcare spending. The central government budget for fiscal year 2018/19 (July-June) was increased to E£98.7bn, equivalent to 1.9% of GDP, so still falling short of the minimum. Healthcare spending will also be driven by strong population growth. According to the Central Agency for Public Mobilisation and Statistics, Egypt’s population reached over 100 million and is expected to grow by about 2% Y-o-Y.

2014201520162017201820192020F2021F2022F2023F
Life expectancy, average (years)                70.60               70.80               71.00               71.20               71.40               71.60               71.70               71.90               72.10               72.20
Infant mortality rate (per 1,000 live births)                21.20               20.40               19.70               19.00               18.30               17.70               17.10               16.50               15.90               15.40
Healthcare spending (E£ bn)                99.90            113.00            125.70            159.60            195.20            231.40            269.00            311.40            356.60            406.90
Doctors (per 1,000 people)                   0.80                  0.80                  0.80                  0.80                  0.80                  0.80                  0.80                  0.80                  0.80                  0.80
Hospital beds (per 1,000 people)                   2.10                  2.10                  2.10                  2.10                  2.10                  2.10                  2.10                  2.10                  2.10                  2.10

COVID-19

Humankind is now facing a global crisis. Perhaps the biggest crisis of our generation. The decisions people and governments take in the next few weeks will probably shape the world for years to come. They will shape not just our healthcare systems but also our economy, politics, and culture. As of May 21st 2021, Egypt has registered over 250K cases of Covid-19. Health systems around the world are at risk of becoming unfit for purpose. Do we need a novel health care system? (Click here for more information about how the pandemic affected our lives)

Funding Sources

The health insurance plan will be funded through workers’ contributions, with 4% of salary paid by employers and 1% by employees. Salaried citizens will make additional contributions based on the number of dependants they have. Widows and pensioners will pay 2% of their monthly pensions. In nominal terms, contributions will rise to between E£1,300 and E£4,000 a year (US$78-240).

The government will provide cover free of charge to citizens earning below a minimum income threshold, the unemployed and other vulnerable groups— which are estimated at 25% of the population. Three organisations—the Quality and Authorisation Authority, the General Authority for Health Care and the National Health Insurance Organisation— will monitor implementation of the system. The first phase of implementation also involves investment in the building of healthcare infrastructure

As well as domestic funding, Egypt also relies on some external assistance. Under its country partnership framework with the World Bank for 2015-19, Egypt will receive loans of up to US$8bn to support its social and economic development, including the healthcare system. In July 2018 the World Bank approved a US$530m five-year health transformation programme, including support for the government’s nationwide screening and treatment for hepatitis C.

Private health insurance

Private expenditure on healthcare accounted for 70% of Egypt’s total healthcare expenditure in 2015, up from 66% in 2011. Of this, 89% came from OOP expenditure.

Hospitals and clinics

The Ministry of Health and Population operates 1,300 hospitals, accounting for about 60% of hospital beds. Universities, the military and the private sector together account for the remaining 40%. Public-sector hospitals have been underfunded for years and they need to be modernized.

The number of hospital beds per 1,000 people has barely risen since 1990, and we estimate that the ratio will have remained unchanged at 2.1 per 1,000 population between 2007 and 2023. The health ministry is undertaking an ambitious plan of improving existing medical facilities and building new hospitals. However, expansion will not keep up with rapid population growth and rising demand.

Pharma and biotech

Egypt is the largest domestic producer of pharmaceuticals in the Middle East and North Africa. Total pharmaceutical sales reached US$4.2bn in 2018. We expect sales to rise to US$8.5bn in 2023—higher than the US$7bn forecast for Saudi Arabia.

2014201520162017201820192020F2021F2022F2023F
Pharmaceutical sales (US$ m)         6,233.00        6,417.00        5,623.00        3,772.00        4,248.00        4,879.00        5,545.00        6,377.00        7,350.00        8,492.00

This is one article out of many where I’ll be exploring different sectors in Egypt. Sectors include telecommunications, energy, healthcare, financial services among others. Articles are updated annually.

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