How light-touch regulation attracted international branch campuses to Egypt: In July 2018, Egypt ratified the International Branch Campus Act (pdf), which has allowed international universities to set up branches in Egypt by building their own campus or partnering with an Egyptian company. Despite criticism in the foreign press levied at the universities which have bought into the move, the program has largely been a success, with agreements with universities from the UK, Germany, Canada, and Italy all having been signed under the program. The success of the program has been tied to the freehand schools have been given to operate their branches and minimal red tape. These advantages, however, have earned the ire of some local private sector operators, who complain that while the program has been beneficial to the education sector as a whole, they feel that they’re being left out.
An overview of the international branch campuses program: The program hopes to see established universities abroad opening branches in Egypt and offering both undergrad and graduate degrees from their home countries, while ensuring “a path to equivalence” with Egyptian university degrees. Egyptians must make up at least 50% of the student body at the campus. The program is very STEM (science, technology, engineering, and math) oriented, with the law requiring that the university be “scientifically distinguished.” The law, however, does permit schools to offer non-science courses. All branch campuses currently operating in Egypt provide some form of computer science and engineering degrees along with business or entrepreneurship courses and degrees. Universities are also required to provide scholarships and grants to Egyptian students with Thanaweya Amma diplomas.
Campuses are required to pay 2% of their annual tuition income to the government. The government also requires that 5% of the campus’ projected financing be secured before receiving a license. While no restrictions have been placed on the location of the project, sources tell Blackboard that the government has been actively promoting the new administrative capital’s Knowledge Hub district as the location for the branches.
First wave of schools brought in over EGP 2 bn in new greenfield investments: Following the ratification of the International Branch Campus Act, three international schools signed on last year to build new branch campuses at the new administrative capital’s Knowledge Hub, with total investments exceeding EGP 2 bn, Assistant Higher Education Minister Mohamed El Tayeb, who also heads the ministry’s commission that licenses the campuses, tells Blackboard. All three schools have formed consortiums with local Egyptian partners. All three universities have completed phase 1 development, which will see their main campus buildings developed and classes being taught.
The three international branch campuses are:
The University of Prince Edward Island: In April 2018, the Universities of Canada in Egypt — an umbrella organization formed to host degree programs from select Canadian universities in partnership with Canwell Education Consultancy — opened the branch campus of the University of Prince Edward Island, becoming the first foreign university to operate in the new capital under the program. The university offers degrees in computer science, business & entrepreneurship, and engineering & design. While it is unclear how much was invested in opening the branch campus, the New Administrative Capital Company for Urban Development — the holding company in charge of the new capital — had said that Universities of Canada plans to invest EGP 1.7 bn in new capital branch campuses.
Coventry University: September 2019 saw the launch the Coventry University’s branch campus at the Knowledge Hub, in partnership with Elsewedy Education. The 27,000 sqm school, which as of now offers 4-year undergraduate degrees in engineering, computing, design, and media, hopes to accommodate some 15,000 students at its final phase of development, according to a press release from Elsewedy Education. The university is a flagship project for Elsewedy Education, which has earmarked some EGP 6-7 bn for the development of the university. Sources tell us that the first phase development of the university cost some EGP 1.2 bn.
The University of Hertfordshire: The University of Hertfordshire, in partnership with Egyptian education outfit Global Academic Foundation, inaugurated its branch campus just this month. The school offers undergraduate and graduate degrees in business, engineering, and computer science.
Three more universities are expected to open their doors by the end of 2020, says El Tayeb. Among these is an alliance of 10 German universities, who will collectively open the German International University of Applied Sciences at the Knowledge Hub, including the Munich University of Applied Sciences and the Technical University of Cologne. The university, which received apresidential sign off last month, will provide degrees in engineering, architecture, computer science and IT, economy, business and management, public administration, production technology, agricultural science, biotech, food processing technology, and tourism. El Tayeb tells that an American university and a British university have also signed on to the program, but would not reveal further details.
And bids continue to roll in: Some 22 other universities have made bids to open branch campuses in Egypt, El Tayeb said, without mentioning details. He tells us there is no final target number of branch campuses that the government is looking to achieve for the program.
Laissez faire education (or smart education policy): Perhaps the most surprising (and most attractive) element of the program is just how much freehand the schools are given once they receive approvals from the government. By law, the “branch shall operate within a framework of academic and institutional autonomy and freedom.” Furthermore, the schools are able to set whatever tuition they like, as the government recognizes that some of these are private businesses that need to make a profit, El Tayeb says. This is also the first time foreigners will be allowed to own 100% of the schools, he noted. This is a stark contrast to Egypt’s school system, where the Education Ministry has set a cap on tuition hikes of 15-17%, and more recently, restricted foreign ownership in private sector schools to 20%.
Foreign ownership limits has been a particularly sticking point for private equity. In an interview with Enterprise earlier this year, Sherif El Kholy, partner and head of Middle East & North Africa at private equity giant Actis, cited foreign ownership restrictions as one of the main barriers to entry for the education sector. “Until today, a foreign investor cannot own 50% or more of a private university unless they open an international branch campus.” Actis was looking into setting up an international branch campus for one of its universities, Regent’s business school, El Kholy said at the time.
Private local universities say they are being left behind: Some of the advantages being offered to international universities opening branches in Egypt has left some private local universities with the feeling that the scale is tipping to favor international schools. These advantages primarily have to do with red tape, said a top executive at a local university, who spoke with us on condition of anonymity. Local universities have to wait longer to receive land and licensing, they said. Local universities also face difficulties when getting approvals to expand a campus, or when deciding to add a faculty or a postgraduate degree, an executive at another university tells us. This puts local universities looking to expand at a weaker footing compared to international branch campuses.
Still, a plus for Egypt’s education sector overall: That said, all whom we’ve spoken with say that the international branch campus program will raise the bar on university-level education in Egypt, which is the intended purpose. From an economics standpoint, allowing international branch campuses to set up shop here and set their prices will make the education sector more competitive and more attractive to investment, says Ramadan Aboulella, President of Pharos University in Alexandria. The program will provide the advantages of a foreign education here at home without families and students having to expend much needed FX, he added.
ِApart from the EFG Hermes-GEMS joint venture acquiring a majority stake in Option Travel, your top education news stories in Egypt this week:
Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2021 Enterprise Ventures LLC.
Enterprise is available without charge thanks to the generous support of Commercial International Bank (tax ID: 204-891-949), the largest private-sector bank in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; and Act Financial (tax ID: 493-924-612), the leading activist investor in Egypt.