RIYADH: Strong growth drivers in Saudi Arabia have resulted in the Kingdom’s education sector becoming an attractive investment opportunity, says a new report.
According to research by global consulting firm L.E.K, released at the Education Investment Saudi being held in Riyadh on Dec. 7, rapidly increasing household disposable income and growth in the youth demographic shows significant headroom for a return on investments in the Kingdom’s schools.
The analysis revealed that the Kingdom is the largest education market in the Gulf Cooperation Council region, with as many as 8.3 million students enrolled in schools and higher education facilities.
However, Saudi Arabia has a lower share of enrollment in private schools compared to other GCC countries, according to Chinmay Jhaveri, partner at L.E.K. Consulting’s Global Education Practice, adding: “This leaves significant room for growth in the region. As a part of Vision 2030, the government aims to transition to a knowledge-based economy, with education as a critical component, the market is expected to become more favorable for private operators.”
The education sector is one of the main pillars of the Saudi Vision 2030 reform plan, with a special focus on enabling the private sector to play an active role in developing it.
The significance with which the Kingdom takes education was directly reflected by the portioning the lion’s share of the country’s budget allocation for 2022 to the sector.
Saudi Arabia’s finance ministry announced 19.37 percent of the Kingdom’s budget, or SR185 billion ($49.2 billion), would be invested in education in 2022.
“A multitude of underlying growth drivers make the KSA education landscape an attractive destination for private investors. Positive macroeconomic factors point to a bright future for the region’s education sector, with the demographic outlook suggesting a sizable market opportunity and an increase in household income, creating a demand for quality private education,” said Danish Faruqui, partner at L.E.K. Consulting, and a founding member of the firm’s Global Education Practice.