Will golden licenses revive private investment in education? The Egyptian government, in partnership with the private sector, is working on a strategy to restore private investment in education. This initiative comes in response to challenges that have pushed private investors out of the market, including rising operational costs, expensive construction requirements, and restrictive regulatory processes, informed sources told EnterpriseAM.

By the numbers: The number of public sector schools currently stands at 49.8k, with a total of 463.2k classrooms, while private schools total 10.4k with 88.6k classrooms, according to data from the Education Ministry. Government schools have 11.6 mn male students and 22.7 mn female students. In contrast, private schools have 1.5 mn male students and 1.3 mn female students. The teaching staff at public schools has reached 843.5k, while private schools employ 115.3k teachers.

Demand for schools is on the rise: Egypt’s growing population and high birth rates are driving a sharp increase in demand for schools. A comprehensive sector review is underway to enhance the competitiveness and quality of education, which could pave the way for more private sector involvement, a source at the Education Ministry told us.

What are private investors asking for? Private sector players have presented several key demands to facilitate their participation. They are calling for the introduction of golden licenses to fast-track approvals, reducing wait times from years to just 20 days. Additionally, they seek affordable land through flexible pricing mechanisms, revised building regulations to ease construction in urban areas, gradual implementation of minimum wage policies to reduce financial burdens, and tax exemptions similar to those offered in other service sectors. They also want longer usufruct periods for public-private partnership (PPP) schools and special incentives for developing schools in remote areas.

1k new schools by 2030: The Education Ministry has set a target to establish 1k new schools by 2030. This plan is backed by the General Authority for Investment, which recently added the education sector to Egypt’s national investment map. Golden licenses are expected to be a cornerstone of this initiative, significantly speeding up the process for new investments and attracting foreign capital.

Relaxed construction requirements aim to lower costs: In a bid to encourage investment, the Education Ministry has reduced the minimum land requirement for private schools. This adjustment will help lower construction costs, while maintaining educational standards, according to Deputy Education Minister Yousry Salem. However, despite these efforts, the cost of building a school on average has surged from around EGP 2 mn to EGP 20 mn due to rising land prices and construction expenses, an industry insider told EnterpriseAM.

Financing challenges could stall new projects: With construction costs skyrocketing, private school operators are urging the government to ease access to land through partnerships with the New Urban Communities Authority and to offer flexible financing solutions. Many investors are calling for government-backed loans to help fund new school projects and expansions.

Foreign investors are showing increased interest: Golden licenses are not only aimed at attracting local investors, but are also designed to appeal to foreign investors. The government expects interest from international players in schools, technical institutes, and training centers, which could lead to broader investment in the education sector.

60 PPP schools on the horizon: The Finance Ministry is preparing the second phase of its public-private partnership program, which includes plans for 60 new schools. Sources at the ministry indicate that tender documents are nearing completion. However, Private School Owners Association Deputy Chairman Badawy Allam, has called for changes to the PPP terms, including extending the usufruct period from 30 years to 50 years. He also stressed the need to adjust tuition caps to account for inflation and rising operational costs.

Legislative reform needed to attract more investment: While the push for new schools is a positive step, legislative reform is essential for long-term success, Allam said, emphasizing the need to revise the 1981 Education Act to create a more attractive investment environment, reduce reliance on government funding, and encourage both local and international investors.

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