North Africa Healthcare Market Attracting Private Equity Groups

Published Date : Jun 25, 2015

Private equity groups have been focusing on the numerous opportunities in the health care market in North Africa, a region that seems to be attracting attention with its expanding populations increasing its spending on private medical services. Such is the situation in countries where health care provisions of the state are either underfunded or inadequate.

Abraaj, the private equity investing company based in United Arab Emirates, has around US$ 9 billion in the form of assets under management. This year, the firm has partnered with three development institutions to set up a health care investment platform worth US$ 200 million. The North Africa Hospital Holdings Group will be focusing on Tunisia and Egypt. Abraaj already possesses stakes in hospitals in both the countries and is considered to be the largest contributor to the fund, donating around US$ 145 million.

Ahmed Badreldin, Middle East and North Africa head of Abraaj said that even though the focus today is on hospitals in Tunisia and Egypt, the group hopes to move forward into Algeria and Morocco. These markets are without institutional corporate companies that help in operating hospitals and also bring in the best synergies, practice, and efficient management teams.

The three partners that join the group in the fund are France’s development financial institution PROPARCO, Germany’s DEG (German Investment and Development Corporation), and the European Bank for Reconstruction and Development.

Government provided health care across North Africa is lagging behind, according to information cited by Abraaj. This shows that the total health care expenditure went up by an average of 5.1 per cent of the GDP in 2011, which rose from 2005’s 4.2 per cent.

The global average is pegged at 9.7 per cent. The expenditure on health care in 2013 in Egypt was roughly around 5 per cent of the nation’s GDP.