Saudi private education market to reach $12 bln by 2023: BCG

The K-12 private education market in Saudi Arabia is poised to grow from $5 billion in 2017 to $12 billion in the next five years, Boston Consulting Group (BCG) said in a recent report.

The several factors that will fuel the growth include the shift towards private schools, enrollment growth and increase in tuition fees.

The consultancy estimates that the share of students in private schools is set to increase from 18 percent in 2017 to 30 percent by 2023, with the government offering incentives to support this increased enrollment in private schools in line with the education goals set under Vision 2030.

Saudi Arabia has a relatively low enrollment rate at the

kindergarten level which is less than 20 percent versus 60 to 90 percent in the rest of the GCC. 

According to BCG, private school fees are likely to rise faster than inflation as school offerings become more sophisticated in terms of curriculum, learning resources, teacher qualifications, and extra-curricular and ancillary services.

In terms of challenges, the report noted processes to obtain permits and licenses in Saudi Arabia could be "inefficient and time-consuming".

There is also a shortage of qualified teachers (strict Saudization ratios restrict the number of expatriate teachers and it is difficult to attract qualified expatriate teachers given the competition with the rest of the GCC), and public schools offer favorable salaries, benefits, and hours compared to private schools.

The government is making an effort to address these challenges, but change takes time, the consultancy added.

However, the Kingdom offers opportunities given that it is still a relatively immature market, with few international schools, limited exposure to international curricula, and limited experience with international investors.

"There is a strong need for high-quality private schools that offer a variety of curricula and fee ranges," BCG said.

Meanwhile, the consultancy said it expects to see greater consolidation in the private education market, increasingly sophisticated educational offerings, and additional emphasis on educational support, such as teacher training and extra-curricular offerings.

There are also significant opportunities for growth in Saudi Arabia given the announcement of recent mega-projects, such as NEOM, a high-tech mega-city that will be four times the size of Dubai and will attract Saudis and foreigners alike, BCG said.