Morocco opens healthcare sector door to private investors

Tuesday, 24 March 2015

“There is not a week happening without a deal”. This comment made by a senior banker in Casablanca reflects the recently flourishing dynamics of the private healthcare sector in Morocco.  

This new context in Morocco has been mainly driven by the evolution of the healthcare regulatory framework. Up until now, only doctors had the right to own private healthcare facilities. The new legal framework  passed in February 2015 is a game changer, as it will liberalise the ownership of private clinics. Moving forward, individuals who are not doctors as well as financial investors (both local and international) will have the right to own a clinic.

This initiative will unlock a sector that was already on the radar of a wide range of players. Private investors are therefore in the starting blocks, conducting market analysis and commercial due diligence in order to identify attractive targets with strong growth potential.

Foreign investment potential

The depth and dynamics of the private healthcare sector also give further comfort to foreign investors in terms of sizeable market potential. Total healthcare expenditure represented about US$ 6bn in 2014 and has been growing fast at a CAGR of 7.7% over the last four years. Moroccans are dedicating an increasing share of their revenue to healthcare: out-of-pocket spending accounts for over 54% of total Moroccan healthcare spending.

Also, the Moroccan Ministry of Health which is the first care provider in the country with approximately 77% bed capacity only receives 28% of total health expenditure, while private spending accounts for about 60%.   Growth dynamics are supported by several sustainable drivers. The rapid growth of the middle income class has contributed to the increasing demand for quality infrastructure and services; which in turn have driven the need to expand the current capacity of private clinics.

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A thriving medical tourism industry

Among other key drivers, medical tourism has become a main component of this new dynamic, relying on two streams:

  • The lack of quality healthcare infrastructure across countries in Sub-Saharan Africa has led more and more people to travel to Morocco to get medical treatment, especially when a specific technical expertise is required (e.g. neurology, traumatology, and oncology surgeries)

 

  • Patients from Europe or from the Middle East are looking for competitive prices for some of their treatments which are either expensive or not very well covered by medical insurance in their home countries (e.g. dental surgery or plastic surgery)

Foreigners account for about 10% of total revenue in some of the multi-specialty clinics in Casablanca. In order to leverage this attractive context, some private clinics specialised in plastic surgery have developed all-inclusive packages for their patients coming from abroad (A medical package would not only include treatment, but also pick-up at the airport and recovery at a luxury 5-star hotel).

Single-specialty clinics also represent an interesting segment to invest. As mentioned previously, plastic surgery clinics offer treatments at international standards, 30% less expensive than what is usually charged for similar treatments in Europe.

Overall, this new context – backed by Morocco’s political stability – has piqued the interest of a wide range of both local (e.g. insurance companies, pharmaceutical groups) and international players (e.g. private equity funds, sovereign wealth funds).

Opportunities abound

Despite these opportunities, a number of questions need to be answered before securing an investment: What are the key market dynamics? How does the competitive landscape look like? How should I start screening the market to identify best opportunities? Who should I partner with to maximise chances of success? Identifying the right market segment remains a key challenge. Starting the market screening process with Casablanca, Rabat and Marrakech is probably the most appropriate since these three cities are home to more than 50% of Moroccan doctors. OBGYN, paediatrics, ophthalmology and cardiology are the most frequently represented specialties in the three cities.  Demand for these specialties is consistently increasing, creating opportunities to either expand in existing clinics or build new ones.

Overall, this momentum experienced by the healthcare sector represents an opportunity for international players to get a foot in the door and enter the Moroccan market through a very dynamic environment with a strong potential.

 

Contact the author to learn more about the Moroccan healthcare market


 

Jonathan Le Henry | Senior Manager, Strategy, PwC Morocco
Website | +212 6 61 08 25 07

Comments

Dear Sir,
THANKYOU for an informative article .
I am a UK based British doctor.
I'm looking into the prospect of opening cosmetic and Rheumatolgy clinics in Morroco .
Unfortunately since last year , I have been unable to get single point of contact to know the way forward regarding medical registration as a foreign qualified doctor along with business setup regulations .
English language has its own restrictions as not many people speak or understand English .
So I have not been able to move forward with my keen interest to setup clinics in Morocco .
So I wonder how do other English speaking business men feel and survive with these handicaps!!!

Dear Amjad ,

Im a CPA operating in Marrakech- Morocco, specializing in the health sector including : Clinical management, Organizations, business plan for a new health entity ...
I have worked with many investors and Doctors to set up their own clinic.
i do not deny that the health sector in morocco and specially in Marrakech is in perpetual evolution and a new tourism segment takes place : the medical tourism.

Please feel free to contact me if you need more detail or more informations about the régulations for a foreign qualified doctors , or foreign investors to create a clinical entity.

mohamed.berrak@gmail.com

Thank you Jonathan for the useful information. I'm a British doctor who can speak Arabic but not French and I would consider moving to practice in Morocco. However, I'm being discouraged by some information of one having to give up his UK medical registration before being allowed to practice in Morocco. Is that true? If so, it would be a complete nonsense by the responsible Moroccan authorities.

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