Saudi education sector primed for private investment

      Published on Wednesday, 19 June , 2019      298 Views     
Saudi education sector primed for private investment


Demand for private sector education in Saudi Arabia is expected to double by 2030, according to the latest report from Colliers International.

At present the market share of the private sector is just 18.2 percent, compared to 40.9 percent in Kuwait, 73.4 percent in the UAE and 90.5 percent in Dubai.



The increase will require an additional 800,000 new seats in the sector by 2030.

Mansoor Ahmed, director, Colliers MENA, said:

“The share of international schools is even lower, with 378,000 students (out of 6.1m students), in international schools. With the exception GEMS Education and SABIS no regional or international operators are currently operating in KSA.”

Saudi Arabia has the largest single Kindergarten to K12 education market in the Arabian Gulf. Schools in the country currently account for over 85 percent of nearly 39,000 schools, with students making up 68 percent of the total 9.1 million students in the region

In the 2019 budget, KSA government allocated $51 billion (from $35 billion in 2011) for education – the highest allocation for any sector, representing 21 percent of fiscal spending and 7 percent of total GDP.

Under the Kingdom’s Vision 2030 Plan, the education sector is listed as one of the main pillars for economic and social growth. And the Saudi Arabian General Investment Authority (SAGIA) is leading the way by enabling access for international companies to establish operations in the Kingdom.

In Q1 2019, there was an 800 percent increase in the number of new education-related companies that received a business license from SAGIA.

“These companies include some of the sector’s most well-known education providers from the United States, the United Kingdom and from across the Gulf region with a total SAR 3.9 billion in confirmed commitments,” said Ahmed.

The report also highlights a potential for growth with a focus on Saudi nationals. It revealed that, currently, only 13 percent of the Saudi student population attend private schools, compared to Oman (14 percent), Kuwait (21 percent), Dubai (37 percent) and Abu Dhabi (57 percent).

Ahmed said:

“Similar to other GCC countries, KSA has a very young population profile, continuously fuelling demand for K12 education. As of the end of 2018, out of a 33.4 million population, 7.3 million (21.8 percent) are in the school going age group of 3 years (KG1) to year 17 (Grade 12), which is expected to increase to 9.5 million (21 percent) by 2030 with total population size of 44.9 million.”

With a per capita income of $20,000 per annum, affordability is also expected to play a major role in the growth of K12 private education sector in the Kingdom.



“There will always be demand for premium schools with even higher fees levels, however, based on Colliers Education’s local knowledge, the sweet spot for international private schools would range from between $9,500 to $16,000 per annum,” said Ahmed.

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Category Life | 2019/06/19 latest update at 6:00 PM
Source : Arabian Business | Photocredit : Google
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