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By 2027, student enrolments in the GCC are expected to reach 14.2 million, according to the latest GCC Education Industry Report by UAE investment banking advisory firm Alpen Capital. As such, the rising cost of education has become a major focus for the Gulf states as they look to bridge the market gap. 

The report states growing school-age population, high per capita income, sizable budgetary allocations, and favorable government initiatives are expected to drive future growth of the sector. 

Between 2022-2027, the pre-primary and tertiary segments are expected to grow faster than the other segments, at a CAGR of 2.2% and 1.7%, respectively. The primary and secondary segments, which constitute the majority of enrolments, are expected to grow by 1.5% CAGR.

The number of students in private schools is projected to grow at a CAGR of 1.7%, whereas enrolments at public schools are likely to increase marginally slower, recording a CAGR of 1.5% between 2022 and 2027.

“Student enrolments across the region have increased by more than half a million over the past five years. Apart from the growing school-age population, this was led by factors such as the influx of private school operators, favorable policies/ guidelines, and focus on technology-driven education, which is also expected to continue playing a crucial role in future growth,” says Krishna Dhanak, Managing Director, Alpen Capital.

The report finds inequality within the private school system due to the fee structures and corresponding quality levels supporting the rise in demand for affordable schooling in the GCC. Fees charged by international schools offering British, American, and IB curricula were the highest.

A recent survey by Zurich International Life and YouGov revealed that 62% of parents in the GCC use their monthly income for school-related expenses. Parents in the UAE spend approximately $ 27,776 annually on tuition fees.

According to Dhanak, rising living costs have affected school operators and parents. The gap between the fees and the quality of education has given rise to affordable schooling and the need to build digital infrastructure to remain competitive.

Saudi Arabia is expected to remain the largest education market in the GCC, growing at a CAGR of 1.6%. In terms of annualized growth, the number of students in Kuwait and UAE is projected to grow faster than the other member nations between 2022 and 2027.

According to the report, Saudi Arabia is leading in the education sector, having allocated 17%, totaling $50.4 billion, of its budget towards the industry. Similarly, in the UAE, a budget increase worth 15.5%, amounting to $2.7 billion, was made in 2023 to improve the sector and integrate technology. 

The report also highlights that governments are critical in transforming traditional learning methods into blended digital capabilities to facilitate learning in collaboration with private players. Additionally, the growing adoption of technology and ramping up investments in digitally aided platforms will help boost the quality of education across the GCC.

Even edtech platforms have grown exponentially in recent years enabling schools to provide higher engagement and flexibility. 

The region is also witnessing the establishment of a number of foreign colleges and universities, particularly those from the UK and the US, to meet the rising demand.