Egypt’s Parliament has given the green light to the government’s economic and social development plan for the fiscal year 2024/2025, which notably includes a significant increase in private sector participation in the health and education sectors.
Minister of Planning and Economic Development Hala Al Said presented the proposal to the assembly on Monday. The plan aims to boost private sector involvement in healthcare from the current 30 percent to 50 percent by 2030. “The overall plan is to increase the private sector’s role in the entire economy to 50 percent by 2030,” Ms. Al Said stated.
This approval follows closely on the heels of a controversial law passed by Parliament that permits private companies to manage public hospitals. This legislative move is part of a broader strategy towards privatization across various sectors but has been met with significant concern and opposition from the public and medical professionals.
Many Egyptians, especially those from lower-income backgrounds, worry that increased privatization of healthcare will make medical services less accessible. This fear is compounded by the current economic climate, where citizens are already struggling with record-high inflation and reduced state subsidies on essential goods like bread and fuel. The underprivileged segments of society rely heavily on public hospitals for their healthcare needs.
The push for privatization in the healthcare sector is linked to conditions set by Egypt’s recent economic reform program under the guidance of the International Monetary Fund (IMF). In March, the IMF approved an $8 billion loan for Egypt, which included stipulations for economic restructuring and increased private sector involvement.
Egypt’s government has been working to overhaul its economy with support from the IMF and other international partners, following a series of foreign aid packages totaling over $50 billion that helped avert a financial crisis.
Despite the widespread concerns, the government insists that the development plan will enhance the quality and efficiency of health services. “The economic development plan will help improve the quality and efficiency of health services,” Ms. Al Said affirmed.
The Ministry of Planning and Development forecasts a 4.2 percent growth in the Egyptian economy for the upcoming fiscal year, driven in part by increased private sector participation in key areas such as healthcare and education. Ms. Al Said highlighted the government’s intent to “enhance the competitiveness of higher education by expanding partnerships with the private sector.”
In defense of the state’s large-scale projects, often criticized as expensive and non-beneficial to the general public, Ms. Al Said cited the National Road Network. This initiative has constructed or upgraded more than 7,000 kilometers of roads since 2014, reducing road fatalities by 33 percent between 2018 and 2022.
Some members of Parliament have expressed concerns about the rising levels of foreign loans, which have surged from $46.1 billion in 2014 to approximately $165 billion by the end of 2023, according to World Bank data. Ms. Al Said argued that borrowing is a viable method for financing state projects and pointed to the establishment of Egypt’s Foreign Debt Committee by President Abdel Fattah El Sisi in 2018 to manage external debt.
However, the rapid increase in debt from $92.6 billion at the end of 2018 to current levels has raised questions about the committee’s effectiveness.
As Egypt progresses with its privatization plans, the government faces the challenge of addressing the concerns of its most vulnerable citizens and ensuring that affordable healthcare remains accessible to all. The impact of these reforms will be closely watched, as the balance between economic growth and social equity remains a critical issue for the nation’s future.
