Egypt, one of most promising markets in the Middle East

Egypt ranks low in terms of spending per capita for medical equipment and devices and this has been the case for many years. The unrest swiping the country since 2011, has led to further underfunding which has affected different areas of healthcare, including: infrastructure, staff salaries, availability and quality of care.

In 2014, the country experienced a return to relative political stability and security. The new government expressed a firm commitment to reform and upgrade the national healthcare provision and insurance systems as well as ramp up the public funding for the Health sector. These factors in addition to the increasing need for more and better quality of care is expected to jump start growth into double digit figures in next 3 years, turning Egypt into the most attractive growth market in the Middle East.

The MedTech market in 2015 is worth about € 650 m and is expected to grow by 10% or more to € 800 m by 2017.

TforG recently interviewed different stakeholders in the Egyptian Health Care context and analyzed critical data and trends. Below you’ll find summary of the most important findings.

Socio-Economic context

Today, Egypt has a population of 84.0 m and growth rates of about 2% are expected yearly. 56% of the population lives in rural areas, one third of which is under 25. The country’s GDP in 2013-14 was around € 250 bln. Due to the relative improvement of the political and security situation in 2013-14, economic growth has slightly recovered.

GDP growth was about 2% over the last years but is expected to be at 3,4% in this year and to rise to 4,5% in 2015- 16. Unemployment is high and expected to further grow and poverty remains widespread. In 2013-14 inflation was at 10% and the forecast for this year indicates an increase to 13,5%.

Fiscal deficit was -14% during the current fiscal year and the forecast for 2015-16 is -9,5%. The deficit is expected to remain for the next 5 years and the public debt will further increase from 73% of GDP in 2013 to 90% in 2015.

Corruption is widespread throughout the public and private organizations.

The Health Care System

Health care expenditures are at 5,1% of GDP of which 59% stem from patient contributions.

The growing (urban) populations, the increased pressure by the middle class for more and better services and the increased incidence of life-style diseases has put pressure on the government to increase the HC budget. The main government bodies managing Egypt’s health care system are the Ministry of Health (MoH) and the Health Insurance Organization (HIO)

The government is rolling out a new universal coverage scheme, based on the “family physician” concept. It is built around following pillars:

  • Integration of health insurance bodies (MoH and HIO)
  • Implementation of a general health insurance coverage
  • Improve availability of primary care services
  • Public private partnerships to improve the infrastructure of the care provision
  • Creation of new clinics (mobile clinics) for early detection of non-communicable diseases

Public care provision is complex in term of finding and management with the involvement of different administrations: The Ministry of Health (MoH), the Health Insurance Organization (HIO), the ministry of education, the police and the military. In addition, there is the growing private sector; which is often contracted by public providers to fill the gaps in availability of care.

In total there are 680 acute hospitals of which 340 are public.

Healthcare Insurance is managed and provided by the MoH and HIO, offering (in theory) free medical care to a large part of the population. In addition, there are several international Health Insurers present in the country such as Allianz, Bupa, etc.

The government plans to introduce reforms into the Egyptian HC system with the following key priorities:

  1. Merge MoH and HIO programs into a new system
  2. Install and expand information infrastructure
  3. Establish treatment guidelines and review the care delivery chain

The HC markets

Egypt’s HC market is the 3rd largest in the Middle East, but still relatively small. Until 2017 one expects the HC markets to grow by 8- 11% per year.

The pharmaceutical market is around € 1,64 bln and is expected to expand by 6 – 9% annually.

The market for MedTech per capita is small compared to other countries. It is estimated to be around € 647 m in 2015 and forecasted to increase by 8 – 10% per year. Medical devices market is expected to grow by 11 – 13% per year.

Our recent research on the Egyptian healthcare system has shown that there is an atmosphere of growth and development. As is the case with many developing countries, opportunities are ripe for private firms in different areas of healthcare to step in and form partnerships with the public sector to help meet the growing needs of the population.

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For further information on the Egyptian socioeconomic context and the healthcare markets, please look into our WHS intelligence platform or the order the TforG Deep Dive report for Egypt containing volumes of 600 surgical procedures in 10 specialisms.