Egypt's MPs grant private sector greater role in running public services

Approval comes as minister Hala El Said defends country's high external debt and controversial megaprojects

The symbol of foreign currency looms large in Egypt, where foreign loans to the government are mounting. Reuters
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Egypt's Parliament has approved the government's economic and social development plan for the fiscal year 2024/2025, which features a significant increase in private sector participation in health and education.

Presented by Minister of Planning and Economic Development Hala Al Said before the assembly on Monday, the proposal aims to boost private sector involvement in health care from the current 30 per cent to 50 per cent by 2030.

The overall plan is to increase to 50 per cent the private sector’s role in the entire economy by 2030, Ms El Said said.

The approval of the development plan comes only weeks after Egypt's Parliament passed a controversial law allowing private companies to administer public hospitals.

The move, which is part of a broader push towards privatisation in various sectors, has been met with concern and anger from the public and medical professionals.

Many Egyptians, particularly the underprivileged, fear that increased privatisation of health care will make it more difficult for them to access medical services.

The country's poorest citizens, who are already grappling with record-high inflation and reduced state subsidies on bread and fuel, rely heavily on public hospitals for their healthcare needs.

The privatisation efforts in the healthcare sector have been linked to conditions set by Egypt's recent economic reform programme from the International Monetary Fund, following its approval of an $8 billion loan in March.

The government has been working to restructure its economy under the guidance of the IMF and other international partners, following a series of foreign aid deals totalling more than $50 billion that saved the country from bankruptcy.

Despite the concerns raised by citizens and medical professionals, the government maintains that the economic development plan will help improve the quality and efficiency of health services, said Ms El Said.

The Ministry of Planning and Development expects the Egyptian economy to grow by 4.2 per cent during the coming fiscal year, she added, with growth driven partly by increased private sector participation in key sectors such as health care and education.

With regards to education, Ms El Said outlined the government’s intention to “enhance the competitiveness of higher education by expanding partnerships with the private sector”.

The minister defended the state’s controversial megaprojects, viewed by many as expensive vanity projects that will not benefit the public.

She singled out the National Road Network, which has built or upgraded more than 7,000km of Egypt’s roads since its inception in 2014. Ms El Said told Parliament the network has reduced deaths on the roads by 33 per cent between 2018 and 2022.

In response to concerns from some MPs about rising foreign loans, which increased from $46.1 billion in 2014, according to data from the World Bank, to around $165 billion at the end of 2023, Ms El Said said such borrowing is a viable means of financing state projects.

The minister acknowledged the concerns raised about foreign debt and highlighted the establishment of Egypt’s Foreign Debt Committee by President Abdel Fattah El Sisi in 2018 to set controls for governing external debt.

However, that the country’s debts grew from $92.6 billion at the end of 2018, according to data from Egypt’s central bank, to the unprecedented levels of today could cast doubt on the committee’s efficacy.

As Egypt moves forward with its privatisation plans, it remains to be seen how the government will address the concerns of its most vulnerable citizens and ensure that affordable health care remains accessible to all.

Updated: June 04, 2024, 2:47 PM