Gov’t mulls new ways to boost private sector involvement in education: The Madbouly government is exploring various partnership models as part of its efforts to boost private sector involvement in education. Despite the sector being particularly attractive to investors — thanks to Egypt’s growing population and demographic makeup — industry players are asking for government support.

The demand is there: Prime Minister Moustafa Madbouly earlier this year said that Egypt needs to build 40-50k new classrooms annually — each costing EGP 1 mn — to accommodate the rising number of students. This translates into a budgetary requirement of EGP 50 bn annually.

Could turnkey schools serve as a quick fix? Education Minister Mohamed Abdel Latif met with major private players in the education sphere earlier this month to discuss boosting investments in the sector through 2030 and addressing the classroom shortage, a government source told EnterpriseAM. The minister proposed offering ready-built schools to the private sector for development and operation to help bridge the supply gap. The proposal garnered interest from private sector players, according to the source.

The first phase will involve 50 schools to be operated under public-private partnerships (PPP). These schools could be up and running by the next academic year, with fees tailored for middle-income families. The first phase will focus on Greater Cairo — the plan will significantly reduce classroom overcrowding by the next academic year, the source told EnterpriseAM.

Incentives could increase private sector involvement: Badawy Allam, deputy chairman of the Private School Owners Association — which represents 6k investors in the education sector — told EnterpriseAM that the meeting included promises of new incentives to increase private sector participation. Allam said that investors are awaiting the final list of ready-built schools to be offered for development.

What kind of support are investors after? Industry players told EnterpriseAM that they are after support similar to that which has been granted to manufacturing, tourism, and renewable energy players.

Financing facilities are key asks: Allam highlighted the importance of including education in the subsidized loan program that offers businesses loans at a 15% interest rate — nearly half the central bank's post-float 28.25% lending rate. The program currently targets the industrial and agricultural sectors.

So is affordable plots: Offering land plots at a more affordable cost would be instrumental in attracting private sector investment, according to Allam.

On the table: The Education Ministry and General Authority for Investment and FreeZones are looking into offering golden licenses to schools and incorporating them into Egypt’s investment map to attract foreign capital.

Will golden licenses spark a revival in Egypt’s private education sector? We dive into the topic in a Blackboard published earlier this month.

Investors are also after legislative amendments: Allam told us that the current laws governing the sector — which have remained unchanged for over 50 years — need an overhaul to streamline licensing and operational procedures. Updated building codes and other regulatory frameworks could alleviate investor concerns and help speed up the process of opening up new schools, he told us.

Remember: The Madbouly government earlier this year loosened regulations on private language schools with the aim of encouraging smaller players to invest in education. The government reduced the minimum plot size for planned schools to 1.2k sqm, down from 2.5k sqm. This reduces construction costs while maintaining education quality and ensuring students have the space to practice activities, Alomran Smart Language Schools Chairman Saber Omran told EnterpriseAM.

A vote of confidence in the turnkey schools system: Omran added that ready-built schools offer private players the chance to offload construction costs. Each school’s legal representative will prepare an initial budget for the first operational year, which will determine the annual rent paid to the Education Ministry over a 30-year period.

Not a long-term solution: While ready-built schools offer a short-term solution, the issues facing the PPP framework needs to be tackled for the long term — the framework is facing issues with land availability.

What investors want: The government source told us that investors want clear conditions booklets for tenders and they want to extend the period of usufruct agreements to 50 years up from 30 years at the moment.

Tuition fees remain a sticking point: Allam stressed that the limits up to which private and international schools were permitted to raise their tuition fees hinder the private sector’s ability to expand. He called for either incentives to reduce construction and operational costs or a gradual increase in tuition fees to ensure financial sustainability.

Despite these challenges, stakeholders are optimistic about the launch of ready-built schools as a quick solution to increasing private sector participation, which currently accounts for just 25% of Egypt’s schools.

Your top education stories for the week:

  • Gov’t looks to develop agricultural vocational schools: The education and agriculture ministries have agreed to collaborate with private sector players to develop agricultural vocational schools. (Statement)
  • Egypt launched the region’s first Android Automotive training program in an effort to increase the number of trained professionals in the automotive software field. The program is designed to “equip a new generation of engineers for the rapidly evolving automotive software industry.” (Press release)
  • Gov’t launches 21st Century Skills Centers project: The Education Development Fund’s board greenlit the launch of the 21st Century Skills Centers project in partnership with multinational tech firm Cisco to identify and train talented individuals across a number of fields to help support Egypt’s development goals. (Statement)
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