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Thursday, 21 November 2019

Education Ministry could reverse foreign ownership cap on schools as investors rebel

Education Ministry could reverse foreign ownership cap on schools as investors dig in their heels: Foreign investors who own stakes in Egyptian private schools are urging their embassies to discuss with the Education Ministry its imposition of an ownership cap on schools, according to a local newspaper. Several American investors are said to have voiced their concerns to senior government officials during AmCham’s US-Egypt Prosperity Forum earlier this week, and others have suspended investment plans following the decision.

Need background? We took a deep dive into the story in the first issue of Blackboard, our education weekly, earlier this month. You can read the full article here.

What did the ministry do? Education Minister Tarek Shawki announced two months ago that his ministry would limit foreign investors to holding a 20% stake in private and international schools. The cap applies to all foreigners, including dual-passport holders, funds, entities, and authorities. Investors are also now required to get prior approval before offloading stakes. Private school owners have urged the ministry to rethink its plans, fearing that the restrictions will stifle foreign investment in the sector.

Is a U-turn in the cards? The ministry has promised to reconsider the decision, and may move to either raise the ownership cap or abolish it completely. Sources told the newspaper that any decision on the matter will be left until after an expected cabinet reshuffle, which could come as early as this weekend. Shawki was one of two ministers singled out by House Deputy Speaker Soliman Wahdan in October as being in line to exit in a cabinet shuffle.

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