Al Masah Capital says that the Middle East and North Africa (MENA) healthcare market will be valued at USD$144 billion by 2020, with a third of the market controlled by the private sector.
A recent report from Al Masah Capital Research predicts that the healthcare sector in the Middle East and North Africa (MENA) region will be worth $144 billion by 2020, significantly higher than the $81.1 billion recorded in 2011, for a CAGR of 6.6 percent during the interval period. In comparison, the worldwide healthcare market was believed to have been worth $5.9 trillion in 2010.
The GCC region, namely the countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, is expected to account for $69 billion of the total MENA healthcare market by 2020.
This is in line with another report by Alpen Capital stating that the GCC region will grow 12 percent by 2018, with Qatar and UAE leading the way.
According to the Al Masah Capital report, MENA countries spent $72 billion, or 4.0 percent of GDP on healthcare in 2010, led by the GCC region, which spent about $40 billion, or 3.5 percent of GDP. Meanwhile, the United States spent 17.6 percent of GDP for its far larger healthcare sector.
However, higher expenditure does not always mean a better healthcare sector. A Bloomberg report of the most efficient healthcare systems in the world in 2013 revealed that two MENA countries, Libya and the UAE, ranked 11th and 12th respectively, ahead of the UK, Canada, France, Germany and the US.
The projected increase in value of the healthcare sector in MENA is seen as a result of demographic factors such as an aging population, decline in mortality rates, and the rise in lifestyle diseases such as diabetes, hypertension and cardiovascular disorders. Rising income, the influx of expatriates, and greater healthcare insurance penetration are also key factors.
Almost two-thirds of the 3,300 hospitals in the region are government-owned, with the majority of these facilities found in Egypt, Saudi Arabia, Algeria, and Morocco, the report revealed.
Citing World Health Organization (WHO) figures, the report noted that the public sector is responsible for 64 percent of MENA healthcare market expenditure. By 2020, this would shrink to a still substantial 58 percent as more private companies enter the market.
Governments in MENA are trying to attract more private enterprise participation into the healthcare industry to offset some of the costs of ramping up projects, and to raise the level of care given to residents to world-class standards. Countries like the UAE and Saudi Arabia have successfully convinced renowned institutions such as the Mayo Clinic, Johns Hopkins, Cleveland Clinic, and Harvard Medical International to partner with regional hospitals to boost local treatment standards and medical tourism programs.
In the UAE, which is bidding to become a major medical tourism hub, Saudi German Hospital Dubai recently became the first hospital in MENA to be granted an international medical tourism certification from the Medical Travel Quality Alliance (MTQUA).
The Al Masah Capital report also says MENA is facing a shortage of 360,000 beds by 2020 because of the spike in healthcare demand. As a response, governments have been increasing funding for infrastructure projects. For example, Saudi Arabia has allotted $28.8 billion for health projects in 2014, including the building of five medical cities in addition to 34 new hospitals and clinics in the pipeline.
Private funding has also poured into the MENA healthcare sector in the last ten years, amounting to approximately $1.59 billion. From 2004-2013, the UAE was the largest recipient of private equity deals with 17 agreements, valued at $453 million in total.