Educational limits

Reem Leila , Tuesday 3 Dec 2019

A ministerial decree limiting the extent of foreign ownership of schools has caused confusion, reports Reem Leila


Minister of Education Tarek Shawki has decreed foreign investors’ shares in private schools be limited to 20 per cent. According to the ministerial decree, the majority shareholders of private schools must be Egyptian while foreign investors, be they companies or individuals, including dual nationals, can hold no more than 20 per cent.

In a press conference Shawki said, “the 20 per cent share owned by foreigners encourages more Egyptian investors to invest in this vital sector. It will also enable the ministry to monitor the curricula of these schools.”

The decree only applies to schools opened after it was issued, though it prevents foreigners from selling existing shares without first obtaining the approval.

Investment in the education sector has been expanding. According to the Ministry of Education, there are now 7,500 private international schools in Egypt, making up 14 per cent of the country’s 54,000 schools.

Investors have asked the minister reconsider his decision. Ministry of Education Spokesman Mahmoud Hassouna says Shawki is ready to meet with the owners of private international schools to discuss the implications of the decree and “the minister has said exceptions can be made on a case by case basis.”

Lawyer Maged Al-Sherbini says companies that already own schools and were planning to expand will now halt further investments until the situation is clearer.

Al-Sherbini argues that prohibiting foreign ownership is beyond the remit of ministerial decrees and needs to be enshrined in legislation. Shawki’s decree, he says, also runs counter to Egypt’s attempts to attract foreign investment.

According to the strategic Egypt 2030 Vision, Egypt is seeking to increase its global quality of education ranking to 30 from the 141st position it managed in 2015. The government has also said it will increase the budget allocations target for pre-university education to eight per cent of GDP by 2020.

Khaled Osama, executive manager at investment bank EFG-Hermes which has targeted the private education sector with its Egypt Education Fund, says the “decree limiting the share of foreign investors to 20 per cent will put more pressure on Egyptian capital and reduce the presence of foreign investment funds and companies”.

It is perfectly possible for the Ministry of Education to monitor academic curricula of private schools without setting quotas for foreign investors or requiring security clearance of owners before the completion of any acquisition, says Osama.

He suggests amending the decree to exclude dual national investors from its stipulations of the decree and allowing foreign investors to own the schools to hold stakes up to 49 per cent of shares, as is the case with import companies.

*A version of this article appears in print in the 5 December, 2019 edition of Al-Ahram Weekly.

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