Lack of government funding and complicated investment procedures have weakened prospects for Egypt's education sector despite a growing population, industry experts said.
Tarek El Hosary, assistant to the education minister, told Zawya that the government had increased budget allocations for the education sector in the last few years but that most of the funds were eaten up by salaries and employee bonuses.
"Government investment spending in education stopped more than 15 years ago due to the decline in budget revenue," he said.
The education sector received USD 8.5 billion out of total government spending of USD 121 billion in the 2013-2014 budget; compared with allocated spending of USD 1 billion in 2004-2005.
Expenditure is expected to reach EGP 60 billion (USD 8.62 billion) in 2014, or 7% of GDP; 4% on primary and secondary education, 2% on tertiary education and 1% on scientific research, according to a report by the cabinet's Information and Decision Support Center.
"The government should provide alternative solutions by paving the way for private sector investment to solve the shortage in the number of schools," El Hosary said, adding that currently only one in 10 proposals for new schools are approved.
A study by Al Masah Capital showed that only two private investment projects in education were carried out in the last 10 years in Egypt, which has 4,900 private schools supporting over 2.5 million students according to official data.
CHALLENGES TO PRIVATE INVESTMENT
Omneia Helmy, director of research at the Egyptian Center for Economic Studies, said private investment was vital to development of the education sector in the most populous state in the Arab world.
"The government has not spent money on this sector in the past few years, and it cannot be expected to do so currently in light of the gap in its ability to finance investment, whether in education or transport or health," she said.
Helmy said the government should offer more incentives to private investment in education, which is already being hampered by the high cost of land and construction as well as difficulty in receiving permission to install the necessary infrastructure.
Former education minister Ahmed Zaki Badreldin agreed: "Primary education is no longer an attractive area for investment in Egypt because it is subject to several restrictions, high investment costs, and the obligation to pay multiple state taxes as it is regarded as a commercial activity."
Badreldin said that when the government increases taxes on private schools, these institutions then have to raise fees, with the result that private schools only cover the educational needs of a small segment of the population.
"It is essential to look into a uniform legislation that regulates education as a commercial activity, but with certain controls, because it involves shaping youth," he added.
According to the Information and Decision Support Center, tertiary education in Egypt is considered more attractive, because 60% of the investment cost can be recovered within three years of operations. In Egypt, there are 19 private universities, all of which are profitable, and 23 public universities that receive EGP 30 million in subsidies each year.
According to a report by Parthenon Group, the private tertiary education sector in Middle Eastern countries has been growing. It said the education sector in Gulf Arab states has become one of the fastest growing sectors in the world as regional governments invest in higher education to help diversify their economies away from oil revenue.
Al Masah Capita expected spending on education in the Arab world to increase to USD 96 billion by the end of 2015, compared to USD 75 billion in 2011. Saudi Arabia allocated USD 54 billion of its USD 219 billion budget on education for 2013-2014.
© Zawya 2014
