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Monday, 29 August 2022

What higher education players think of the state's privatization strategy

Where do private universities fit into the government’s privatization strategy? Last week we looked at the K-12 education sector’s thoughts on the state ownership document, as part of a series of workshops to get input from stakeholders in different sectors on the policy plan. Today we will explore private university players’ thoughts on the document.

The key takeaways: The general sentiment among the industry sources Enterprise spoke with is that, while the state’s involvement in the sector has helped bring in more investments, there needs to be a level playing field in terms of the benefits offered to public and private institutions to allow the sector to flourish. Our sources also agree that competition is healthy, but the government would do well to follow private sector players’ lead to improve public higher education.

Refresher: The government intends to fully withdraw from as many as 79 industries over the next three years as part of plans to restructure the economy in favor of the private sector. This is all part of a wider plan announced in May to restructure the economy in efforts to cushion the economic blow caused by the Ukraine war. The state wants to more than double the private sector’s role in the economy to 65% over the next three years, and attract USD 40 bn in investment over the next four years. Education is one of the areas the government considers strategic and will therefore not be exiting.

Industry overview: Egypt currently has some 85 Egyptian universities, including governmental, private, international, civil, and high-tech institutions, according to figures from the Supreme Council of Universities. That’s 20 more institutions than we had in 2021, as the government worked to set up more higher education institutions and expand international partnerships. In 2021, 232 new faculties were set up — 100 of which are public and 132 in private institutions — bringing the total to 756 colleges across the country. Additionally, 271 new majors were offered in public universities — boosting the total to 789 — including nuclear engineering, biophysics, cybernetics, artificial intelligence, and nanotechnology.

The FY 2022-2023 state budget has allocated EGP 159.2 bn for higher education, which is around 7.7% of total public spending, while EGP 79.3 bn is dedicated to scientific research, accounting for almost 4% of the entire budget, and marking a c.24% y-o-y increase from the previous fiscal year.

These figures suggest we’ve reached (or at least are approaching) a saturation point, according to El Nahda University President Hossam El Malahy, who said that for every 1 mn residents, we need one university. He noted that efforts to enhance government investment in public education as well as incentives the state has given the private sector have led to an expansion in colleges around the nation.

Private sector players agree that maintaining healthy competition is beneficial, but benefits have to be equal: The government’s interest in boosting investments in the sector has helped higher education flourish in Egypt, including with the establishment of foreign branch campuses since 2019, our sources tell us. It remains the case that, even though new civil universities charge lower tuition fees than private universities, the latter retains a competitive edge because of their quality of education and the wide range of disciplines available, Future University President Obada Sarhan told Enterprise.

Some also want to see a few adjustments for private institutions in particular, including student admission rules and allowing secondment years for faculty members, which could make the sector more appealing to investors and increase the competitiveness of both private and civil universities, suggested MP Hossam Eldin El Mandouh. Removing the centralized admissions platform that forced private and nonprofit universities to use a Tansik-style system will empower private institutions to admit the students they consider fit, agrees Sarhan. He praised the Supreme Council of Private Universities’ decision to roll back the system, saying that allowing private universities to admit students based on their own metrics will allow them to provide a higher quality of education.

One thing that doesn’t need to change: Legislation and regulation of higher education. The higher education sector is appropriately governed by laws and regulations, as opposed to the K-12 sector, whose regulatory framework is still lacking, says Sarhan.

The broader higher education system could benefit from drawing on the management expertise and strategies of the private sector, said Senate Education Committee Undersecretary Ahmed El Badri. He advocated for boosting both the effective private sector participation in the delivery of educational services and determining the incentives provided within regulatory frameworks.

Partnering on research and skill development is key: Scientific research is a key axis of collaboration with the private sector, Senate Education Committee member Heba Makram Sharobim said, emphasizing the need to increase investments that support scientific research at Egyptian universities for the benefits of society and long-term development. The private sector can collaborate with public institutions on developing university hospitals and improving healthcare, said committee member Camelia Sobhy. This would improve healthcare through providing better medical services and producing the outputs of scientific research, among other things, she said.

None of this would interfere with the state’s provision of unpaid higher education, which remains a matter of national security, several sources agree. University education provided at zero-cost is enshrined in the country’s constitution and the rapid growth of private institutions does not contradict with that right, House Education Committee Chair Sami Hashem told Enterprise.

If anything, public universities benefit from the growth of the private sector, Hashem said. The private higher education sector also contributes to meeting the rising demand for educational services, he added.

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