Skip Ribbon Commands
Skip to main content

News Release

KSA

Opportunity for private sector investment in Saudi Arabia’s healthcare sector

National Transformation Program expected to increase private sector spending in healthcare


Saudi Arabia's National Transformation Program 2020 (NTP) will present significant opportunities for the private sector to invest in the Kingdom's healthcare industry, according to a new report released by JLL.

The report, called 'Healthy Returns', highlights the opportunities for investors and other real estate players in the healthcare market across MENA over the next five years as the region responds to an ageing population and increased demands for hospitals and other healthcare facilities.

One of the main strategic objectives within the NTP is to increase the contribution of private sector spending in the healthcare sector from 25% to 35% by 2020. As part of this initiative the Saudi Arabian General Investment Authority announced it would allow foreign investors 100% ownership of healthcare companies in August 2017. Added to this, the government plans to privatize many existing facilities to improve the efficiency of hospitals and healthcare services.

"The vision represents a structural shift in the Saudi healthcare sector, creating major new opportunities for private sector development," said Eng. Ibrahim Albuloushi, Country Head of KSA, JLL. If implemented as planned, Saudi Arabia will witness an improvement in the quality of healthcare services and facilities, along with optimization of available resources and an increase in private sector participation."

The Saudi government currently spends an average of 7% of the total budget directly on healthcare with expenditure rising above SAR 60 billion as of 2016. Twenty three new hospitals were built across the Kingdom in 2016, adding 4,250 beds, with a further 38 hospitals in the pipeline totaling 9,100 beds. The government is also seeking to implement a series of preventative measures and promoting a healthier lifestyle to help reduce pressure on the current healthcare system.

Opportunities

Public Private Partnerships (PPPs) are a key component of the ambitious Saudi Vision 2030 launched last year. According to the JLL report, having a specialized regulatory body in place (The National Centre for Privatization) to oversee the privatization process of a number of public entities will help attract foreign investors and accelerate the progress of PPPs in KSA.

In a major recent policy initiative, the KSA government announced plans to privatize a number of state run hospitals and healthcare centres.  In support of this objective, the government called for bids to provide financial advice to privatise 55 primary health centres in Riyadh.

"Should the privatisation of public hospitals and healthcare centres materialise, further opportunities to invest in Saudi's healthcare sector will emerge," said Eng. Albuloushi.

Investment opportunities also extend to the provision of medical education given the current shortage of qualified Saudis in the health care sector. The NTP aims to increase the number of Saudi physicians enrolled in training programs from 2,200 to 4,000, and the number of nurses and support staff from 70 per 100,000 people to 150 by 2020.

-Ends-