Private Education

Saudi Arabia expects to nearly double its population by 2030. By that date, the Kingdom could reach 60 million citizens, a significant growth from an estimated 34 million in 2020.

That growth, which will be driven in part by an influx of foreigners into the country, also means an increase in the number of students in primary and secondary schools.

Specifically, the school-age population in Saudi Arabia could reach around 7.6 million by 2030, according to estimates from consultancy L.E.K.

This increase means that the private education market will more than double in the coming years, as the rising population is coupled with Vision 2030 education initiatives and changes in parental spending habits.

As a result of this trend, the kingdom will need to build more schools to accommodate its students, a need in which it will have to turn to the private sector. In total, 2.1 million new school seats will be needed between now and 2025, of which 534,000 will be for private schools, according to a study by consultancy Strategic Gears.

Therefore, more than 980 new private schools will be needed by 2025, which will increase current private school enrollment from 13% to 15%. This percentage of private school enrollment is the lowest compared to four other GCC countries.

In the UAE, 74% of K-12 students attend private schools, in Kuwait 35%, in Bahrain 32% and in Oman 23%, according to the Strategic Gears study, which highlights the opportunity for private companies to close the gap in Saudi Arabia compared to its neighbors.

Compared to the GCC average of 31 international schools per million population, Saudi Arabia has only 7 private international schools per million. There are only 83 foreign schools in Riyadh and 82 in Jeddah, compared to 281 in Dubai and 151 in Abu Dhabi. “This indicates the huge potential that the Saudi private education market has, particularly for high quality schools that offer international curriculums,” the Strategic Gears report.

Some of the market drivers for this segment is the fact that the education sector is one of the pillars of Vision 2030, as it is fundamental for the Kingdom to meet its goals of economic expansion and sustainable development. This interest in having a better prepared population makes the education sector one of the main budget items every year, such as in 2021 when education received 19% of total spending, according to a report by Mordor Intelligence.

Part of these resources are allocated to strategies that include the development of public-private partnerships to convert public schools to private schools or for the construction of new schools. These are just some of the strategies to grow the share of private education to 25% by 2030. “By doing so, the government will reduce the cost burden on the public purse while also leveraging private provision to deliver higher quality,” according to an L.E.K. special report.

According to the L.E.K report, some of the challenges that may be faced by new investors looking to enter this market is a complex regulatory landscape, although the country is in the process of transforming to ease many administrative formalities.

Two other major challenges for investors are the difficulty in finding high quality international teachers and the difficulties in accessing accurate and reliable data on the K-12 market, as it is a highly fragmented sector where it is difficult to find reliable sources of information to support investment decisions.

Meanwhile, the Saudi education market faces its own challenges, with educational quality being the most pressing of all. As mentioned above, the low level of teachers means that Saudi Arabia scores a 4.3 out of 7 on the Quality of Education Score developed by the World Economic Forum, a grade below the GCC benchmark of 5.7 and the international benchmark of 6.1, according to the Strategic Gears report. Therefore, the intention of Vision 2030 is to provide the country with better teachers, while it is estimated that 183,600 education professionals will be needed by 2030.

In fact, teacher quality is the main motivation for Saudi parents when choosing a school for their children, according to the study. Incorporating higher quality teachers is a determining factor for private schools to differentiate themselves from public schools and thus increase the percentage of the population in private institutions. Another of the axes on which the country has been working since the implementation of the National Transformation Program in 2020 as part of the 2030 Vision is to improve teacher training, in addition to improving hiring processes and educational development programs for these employees.

That has been achieved through initiatives such as increasing the number of professional development hours for teachers from 10 in 2016 to 18 in 2020, for example. With measures like those, the country makes it easier for foreign investors to start up private school projects, which helps parents find the high-quality education they are looking for their children in these centers. All this contributes to the kingdom having the schools it needs and the educational quality necessary to train the professionals who will help meet the goals of Vision 2030.