There is a “compelling case” for investors to look seriously at Saudi Arabia’s rapidly changing education sector, according to new research.
Knight Frank’s Saudi Arabia 2021 Education report said the sector is undergoing rapid transformation at all stages of education, especially as policies stemming from Saudi Vision 2030 are put into play.
The kingdom’s schoolgoing population is almost three times that of the rest of the GCC and with the growing interest towards private education, as well as a higher acceptance of foreign curricula.
This creates a compelling case to invest in the education space of the kingdom, according to Shehzad Jamal, partner, head of Healthcare & Education at Knight Frank Middle East.
“The Saudi Arabia government has recognised that improvements need to be made in the quality of its education system, which are to be addressed through its Human Capital Development Vision Realisation Program of the Vision 2030. Significant reforms are under implementation to address challenges faced by the sector, which include 100 percent foreign ownership, Sector specific PPP regulations and greater access to financing,” said Jamal.
“There are also planned reforms to improve educational results, that include improvements in teacher training and development,” he added.
On pre-primary education, Knight Frank said that due to its largely non-compulsory status and availability of affordable and quality institutions, enrolment rates have been very low.
As at 2019, only 21 percent of the applicable age groups were attending pre-primary education institutions, the lowest rate compared across our selected worldwide countries.
However the Saudi Arabian government aims to increase the enrolment rate to 95 percent by 2030 and demand for affordable and quality pre-primary institutions is only likely to increase, said Knight Frank, adding that Saudi Arabia’s Ministry of Investment, in conjunction with the Ministry of Education, estimates that 1,500 kindergartens are required across Saudi Arabia over the next decade alone.
Regarding primary and secondary education, the report said that over the four years to 2019, Saudi Arabia has seen a marked increase in the number of students and schools, up 16.5 percent from 2015.
Of the total 38,150 of schools, 80.3 percent of these schools were public schools, 12.5 percent private and foreign schools – schools that offer international curriculums such as American, British or Indian – accounted for 6.2 percent of schools. These fee-paying schools have grown in number by 42.1 percent since 2015.
“Foreign schools are seeing increased levels of demand from Saudi nationals as this segment of the population increasingly realises the benefits of their children obtaining international education,” the report noted.
In the five years to 2018, the total number of students in higher education has increased by 8.3 percent and currently stands at 1.62 million. In total, Saudi Arabia has 60 universities.
Knight Frank said the Saudi Government has set out many strong initiatives to ensure education outcomes are in line with market requirements. These include applying more stringent eligibility criteria to the King Abdullah Scholarship Program, which will lead to increased demand for education within the country. They are also going to expand the technical and vocational education sector, reducing public school funding and privatising public universities.
The report added that the technical and vocational training (TVT) sector is the cornerstone of Saudi Arabia’s economic diversification plan, which is aiming to create five million employment opportunities in the next 20 years to 2030.
Around 40 percent of these new jobs are expected to be vocational and technical in nature, ensuring an efficient and effective TVT sector will be crucial going forward, it noted.
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