The COVID-19 pandemic is placing heavy pressure on healthcare services around the globe, whether they are provided through public hospitals or private entities.
In the MENA region, a number of reports and analysts have said that health services are among the sectors that are actually benefiting from the current situation, and that they will witness a boom over the short and medium terms.
A recent report issued by Fitch Solutions, for instance, predicted the region’s healthcare market to grow to $243.6 billion by 2023, up from $185.5 billion in 2019 with an 11.7 percent compound annual growth rate (CAGR).
For Egypt, in particular, the report indicated that the country’s total healthcare spending will post a local currency CAGR of 9.7 percent through to 2023 (8.4 percent in US dollar) to reach $12.6 billion.
Similar growth rates are forecast over the following five years, working out at CAGR (a Y-o-Y ) of 9.6 percent in local currency (7.4 percent in US dollar), with the market forecast to be valued at $17.2 billion in 2028, according to the report.
Meanwhile, health spending per capita is forecast to reach $117 by 2023 and $147 by 2028, up from $86 in 2018.
Regarding healthcare services that are provided through the private sector, Fitch indicated a high proportion of private healthcare spending, as Egypt remains one of the most interesting North African markets with rapid population growth.
Additionally, according to the report, the start of the rollout of the universal health insurance system, which began in mid-2019 and is expected to be in place by 2032, provides solid longer-term growth potential.
Another report issued by Fitch pointed out that Egypt’s pharmaceutical and healthcare market has been one of the most attractive in the MENA region, given that the government’s efforts to improve the sector will attract further foreign investments in the coming period, while the economic reforms, including the new health insurance law, the establishment of the Egyptian Drug Authority (EDA), and the new investment law, will raise demand for healthcare services and medicines, enhance the business environment, and encourage foreign investments.
Fitch’s figures reflect how the healthcare market in MENA in general and in Egypt, in particular, is expected to witness a boom amid the current challenges, making use of other potentials that will drive it to a notable growth.
Furthermore, according to Oxford Business Group’s recent report, though the Egyptian healthcare system is marked by a pluralistic mix of public facilities, it has been strained by rapid population growth and relatively low levels of funding. Thus, most Egyptians opt for private facilities, fuelling high levels of out-of-pocket expenditure, and increasing the desire for private insurance.
In response, the government has initiated several reforms aimed at improving quality and access to healthcare services for its population. Demand for medical equipment, pharmaceuticals, and healthcare facilities are likely to follow, offering continued private sector growth and opportunity.
Yet, Egypt’s healthcare business is projected soon to face challenges due to the fallout from the COVID-19 pandemic, given the basic nature of healthcare services, according to a report by the Russian Renaissance Capital Bank.
However, according to the report, the long-term vision for the country’s healthcare sector remains good, and the drop in stock prices since the beginning of the year provides an attractive investment opportunity, while the pharmaceutical sector will be the least affected during the pandemic.
With additional support from accumulated demand, the company expected that the second quarter of 2020 will be the weakest quarter in terms of patient influx, while there will be an added decrease of 25 to 35 percent for hospitals and laboratory services, with a gradual recovery in the third quarter before returning to pre-pandemic levels in the fourth quarter.