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Monday, 26 July 2021

Could a Chinese crackdown on investment in education be good for Egypt?

Could a crackdown on foreign investment in China’s booming education market drive investors to education companies in Egypt? A “sweeping overhaul” of China’s USD 100 bn private education industry will “eliminate foreign investors from much of the sector and threatens to wipe out bns of USD of investment from groups such as BlackRock, Baillie Gifford, Tencent, Sequoia and SoftBank’s Vision Fund,” the Financial Times writes.

The new Chinese regulations are … sweeping, to say the least: They will “ban companies that teach school curriculum subjects from making profits, raising capital or listing on stock exchanges worldwide, and will prevent them from accepting foreign investment.”

Egypt — like several Canadian provinces (here, here and here) — has been twitchy about foreign involvement in its K-12 education system. Longtime readers will remember the government here imposing back in late 2019 a 20% cap on foreign ownership of both private and international schools. The move came despite the state working overtime to lure foreign universities to open branch, satellite and partner campuses here.

But the doors here are now open: Egyptian universities are rolling out the red carpet for foreign investors (folks wanting to open a new university here in most fields now need a foreign partner). What’s more, K-12 schools (private and international alike) have been able since early 2020 to formally apply for exemptions to the ownership cap.

Egypt has two listed education outfits: CIRA, the kindergarten through university giant, and newly listed Taaleem, which focuses on post-secondary education. Others, including GEMS (which has partnerships with EFG Hermes and the Sovereign Fund of Egypt) and Choueifat, are privately held but have large foreign shareholders.

Looking for more on where to invest in education here in Egypt? Look no further than Blackboard, our weekly deep dive into the business of education. This morning’s story: How the private sector can get a piece of the government’s new push to roll out technical colleges.

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