Egypt is one of the most intriguing countries in MENA for companies interested in healthcare. Egypt’s healthcare industry offers favorable growth prospects for private hospitals and nutraceutical companies that are trying to tap into growth in the broader MENA region.
Growth Outlook and Industry Trends
This post will provide an overview of Egypt’s economy, as well as various opportunities in the healthcare industry.
Growth Potential
Egypt’s healthcare expenditure per capita was only $157 as of 2017, which is well below the levels seen in emerging and regional economies. The current levels are actually on par with other frontier market destinations such as Sri Lanka and Vietnam, and Egypt’s healthcare industry has room for ample growth as wages continue to rise in the coming decade. As incomes rise in Egypt, consumers will increasingly utilize the services of private hospitals and also increasingly spend money on diagnostic services, which will allow hospitals to enjoy more favorable margins. Furthermore, as consumers become wealthier and more health-conscious they will likely spend more money on nutraceutical products. According to Transparency Research, the nutraceutical industry in MENA has been growing by over 8% per annum, and Egypt accounts for nearly a quarter of this market.
Growing population
Egypt”s current population of approximately 95 million makes it one of the most promising emerging markets in the world. According to PWC, Egypt will be the 19th largest economy in the world, closely following dominant economies such as Canada and Spain. Furthermore, the trends of urbanization and rising wages in Egypt will also be a catalyst for increased healthcare expenditure, especially in the private sector. Egypt’s population will likely approach 150 million in the 2030s if the current growth rate continues. This rapid growth in population, coupled with rising spending per capita, bodes well for investment in this industry. As incomes rise in Egypt, consumers will begin increasingly demanding other services such as diagnostic services, and they will likely choose to increasingly spend money on private healthcare in lieu of public healthcare.
Need for growth
As of 2014, hospitals in Egypt only had 1.5 beds per 1,000 people, which reflects how Egypt’s healthcare industry is behind a lot of emerging market peers. Several lifestyle diseases are on the rise in Egypt, including diabetes, obesity, and hypertension, which would put an additional strain on the country’s population in the absence of preventive measures. Nutraceutical products can help play a role in reducing the disease burden in this country and allowing consumers to be more health-conscious.
Future Outlook
The increased trends of urbanization and rising incomes have also posed health consequences on the population, as chronic diseases such as diabetes, coronary problems, and obesity have been on the rise. According to the WHO, the diabetes prevalence in Egypt reached 16.7% as of 2015, which is much higher than the rate seen in developed countries. Hospitals will need to expand in the coming decades to be able to address these health issues faced by the population. Notably, Egypt has been very successful in developing solutions to address the high prevalence of hepatitis C, as the country has developed one of the world’s cheapest hepatitis C drugs, which is even cheaper than drugs produced in India. Private hospitals in Egypt, such as Cleopatra Hospitals, are well-positioned to benefit from the increased healthcare expenditure in Egypt in the coming decades.
Nutraceutical companies that want to expand their offerings to MENA should have a laser focus on some of the growth opportunities present in Egypt, especially considering that the current healthcare spending levels significantly lag behind the levels seen in some of its emerging market peers. Nutraceutical companies will be able to experience strong single-digit growth upon successfully entering Egypt, and should not overlook this country’s role in the development of the global nutraceutical industry.
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