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“Our country is undergoing an unprecedented economic transformation, guided by Saudi Vision 2030. To ensure
the continued prosperity of Saudi Arabia, we must empower young Saudi men and women who are the Kingdom’s
next generation of leaders. This requires a continued commitment to education, facilitating skills transfer and
creating new and valuable job opportunities by fostering growth and supporting diversification. At SAGIA, we are
focused on attracting the world’s leading education providers and facilitators and creating partnerships with local
firms to drive the growth of this strategic sector.”
His Excellency Eng. Ibrahim Al-Omar, Governor of SAGIA
The education sector in Saudi Arabia is the largest in the Arabian Gulf region. In 2019, the government allocated
US$51 billion for education, representing 21% of fiscal spending and 7% of total GDP.
In line with Saudi Vision 2030, there are several initiatives underway to unlock the education sector for private
investment with SAGIA leading the way with enabling access for international companies to establish operations
in the Kingdom. Following the recent lifting of foreign ownership restrictions in this sector, education has become
one of Saudi Arabia’s leading investment success stories.
Q1 2019 saw a major uptick in the number of new education-related companies that received a business license
from SAGIA. Compared to the same period a year before, Saudi Arabia saw an increase of 800% in the number
of education service providers establishing operations in the country. These companies include some of the
sector’s most well-known education providers from the United States, the United Kingdom and from across the
Gulf region with a total SAR 3.9 billion in confirmed commitments.
SAGIA is further strengthening its commitment to facilitating the development of the Kingdom’s education
offering and creating a dedicated Invest Saudi Education Team, which will undertake a series of international
and domestic roadshows to raise further awareness of opportunities in the sector.
Colliers International – Education & Healthcare Team
• A holistic regional view with granular in-country experience.
• 5 local Offices (Riyadh, Jeddah, Cairo, Abu Dhabi and Dubai) - 20 Years in the Region.
• Extensive knowledge and experience of the KSA education sector; including;
• 40+ market and financial feasibility studies for schools & higher education institutions
• 30+ business and property valuations in education sector having transaction value of US$ 2 + billion
• 20+ commercial and financial due diligence and review of business plans
• 10+ operator search and selection assignment for regional and international schools / higher education
institutions
As the three key components come together; underlying population demand, Government
support and an underserved market we look at this sector and specifically the anticipated growth
in foreign international schools.
The paper also provides a brief snapshot of the key factors impacting the K12 education market in
KSA and its outlook, identifying opportunities and challenges to operators and investors.
Similar to the K12 sector, higher education in the
Kingdom of Saudi Arabia is also the largest single
education market in the combined Arabian Gulf region.
Based on the latest data available, a total of 1.62
million students were enrolled at higher education
institutes across Saudi Arabia in 2017/18. Out of which
nearly 95% of total students were enrolled at public
sector institutions highlighting the heavy reliance on
the public sector for higher education.
However, this trend is expected to change under
Vision 2030 initiative, where the higher education
system in KSA is in its transformation phase. The
objective is to align higher education outcomes to the
requirements of employers. Concurrently the
Government wants to increase private sector
participation, changing its own role from a service
provider to a regulator and facilitator, which will present
new opportunities for the private sector.
Several factors converge to fuel demand for higher
education;
Vision 2030: Vision 2030 aims at transforming the
Saudi economy away from an over-reliance on oil to a
more balanced, investment-based economy. There are
several initiatives underway to unlock the education
sector for private investment with the Government’s
foreign investment driver SAGIA leading the way by
enabling access for international companies to
establish operations in the Kingdom. A key component
of this initiative is the introduction of full foreign
ownership simultaneously encouraging foreign
investment, diversifying the education offering and
boosting the growth of the private education sector.
The National Transformation Program (NTP), which
translates Vision 2030 into an actionable plan includes
the following strategic objectives as part of NTP:
• Improving recruitment, training and development of
teachers.
• Improving the learning environment to stimulate
creativity and innovation.
• Improving curricula and teaching methods.
• Improving students’ values and core skills.
• Development of financing methods and improving
financial efficiency.
• Educating students to address national development
requirements and labour market demands
• Increasing private sector participation in the
education sector.
Demographic drivers: As of mid - 2019, the
Kingdom's population stands at 34.2 million and is
expected to reach 45 million by 2030. The population
between ages 18-24 years is approximately 3.7 million
(11.2%), out of which 1.62 Million (2017) attend higher
education institutes. This is expected to grow to almost
2.3 million by 2030 creating an additional demand of
more than 640,000 student places.
Increase in private sector participation: In a bid to
transform higher educational system in the Kingdom,
the government is improving and reforming regulations
paving the way for investors to acquire and deliver
services. Initiatives such as exempting private
education from VAT will further boost development of
the sector. Further, a new university system has been
approved to grant universities a higher level of
independence from the Ministry of Education.
However, there are still at present some legislations
that can hamper demand such as; the preferential
treatment for public university graduates when
applying for employment and provision of fixed
stipends. Therefore, additional regulations should be
introduced to level the playing field for all participants
to ensure a balanced market.
Economic diversification: As Saudi leadership
diversifies its economy away from traditional
hydrocarbon revenues, economic transformation and
diversification program under Vision 2030 is expected
to spur demand for higher education. Colliers expects
demand to move from traditional offering to Artificial
Intelligence (AI), Robotic Sciences, Nuclear Energy,
Sustainable Energy, Renewable Energy, Solar Energy
etc.
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Increased demand for Saudi Nationals in healthcare,
tourism & hospitality and retail sectors: The Ministry of
Labour and Social Development started implementing
Saudization focusing on retail, healthcare and hospitality
sectors.
Healthcare: Presently, 68% of doctors, 62% of nurses, 22%
of the Allied Health Professional (AHPs) and 76% of the
pharmacists, a total of around 223,000 medical professionals,
are expatriates. By 2030, an additional 50,000 doctors, 66,000
nurses and 45,000 additional AHPs will be required. However,
this demand is for new jobs required and does not account for
the Saudization drive in the healthcare sector as most of
existing jobs must be filled by Saudi nationals.
Furthermore, as the Kingdom embarks in the adoption of new
medical technologies, there will be a resultant demand in the
transition from traditional courses to advanced medical
education. Artificial intelligence (AI), data analytics, robotic
medical sciences, genome sequences and short courses to
enhance the skill set of doctors, registered nurses (RN) and
AHPs. All of which will require additional facilities.
Tourism & Hospitality: Vision 2030 covers a number of
strategic sectors, including reforming the tourism market by
increasing capacity of visitors through doubling the number of
UNESCO heritage sites from the current level of five sites.
To further promote tourism, the Saudi government announced
a new visa regime in September 2019 offering 49 countries
tourist visas on arrival. This aligns with the target of increasing
the contribution to GDP from the tourism sector to 10% by
2030 from current level of 3%, aiming to attract 100 million
annual visits by 2030, up from current level of 40 million. This
growth requires nearly SAR 250 billion ($67 billion) of new
investments by 2030; including 500,000 new hotel rooms and
the creation of around 1 million tourism related jobs. The
ministry of Labour is also targeting 100% Saudization in the
tourism and hospitality sector.
Retail: In Q1 2018, there were 330,000 nationals working in
retail and wholesale business, this number has increased by
25% in Q1 2019 to 440,000, which is expected to further grow
in line with population and the retail sector growth.
Demand for technical and vocational training: The demand
has also grown at a CAGR of over 6% since 2012. We believe
as the initiative gains momentum and is implemented across
other sectors, that more nationals would enroll for higher
education in preparation for the expanding employment
opportunities.
An expected shift from studying outside KSA to within
KSA: Another significant impact is the realignment of
outbound Saudi students. Based on latest data available from
General Authority of Statistics (GAS), a total of 122,532 Saudi
students were studying abroad as of 2017/18 a reduction of
39% (76,753 students) compared to 2012/13. 87% of
outbound students are fully funded by the King Abdullah
Scholarship Program (KASP).
When combined, these factors are set to increase demand for
the provision of private higher education both in coverage and
quality.
Supported by a population growth rate of 2.5% per annum, total
demand for higher education enrollment will reach 2.3 million in
2030, compared to 1.6 million in 2018. An additional demand
for more than 640,000 new places in the Kingdom by 2030.
In Colliers’ opinion, the private sector in the Kingdom, similar to
the UAE and Egypt, offers significant opportunities to open
campuses of international universities. Those overseas
Universities which have previously welcomed Saudi students
are expected to have a ready demand due to brand familiarity.
However, it is important for the public sector to maintain
balance between public and private education to ensure quality
education for everyone; income disparity and living cost of
large families may restrict access to private education without
government support.
The establishment of a clear and stable regulatory environment
is also essential to encourage private investments in the
education sector.
The future success of higher education in KSA is to be based
on provision of degrees / courses with an objective of aligning
the outcomes to the requirements of the changing market
conditions under Vision 2030.
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The recent announcement enabling
foreign universities branch
campuses to operate in the Kingdom
will substantiates the Kingdom’s
announced goals.
Qualitative turning point in
increasing competitiveness in
the higher education system
Ministry of Education - Saudi Arabia
“ “
Source: General Authority of Statistics, KSA, Colliers International Analysis
3.7%
3.8%
3.9%
4.1%
4.1%
4.1%
4.3%
4.2%
4.6%
4.2%
3.7%
3.6%
2.9%
4.0%
3.6%
3.7%
3.8%
4.0%
3.9%
3.6%
3.5%
3.2%
3.1%
2.9%
3.0%
2.4%
1.4%
2.7%
8% 3% 2% 7%
0 - 4
5 - 9
10 - 14
15 - 19
20 - 24
25 - 29
30 - 34
35 - 39
40 - 44
45 - 49
50 - 54
55 - 59
60 - 64
65 +
Source: General Authority of Statistics, KSA, Colliers International Analysis
KSA Population Distribution by Province (2018)
4.3%
4.4%
3.9%
3.5%
4.1%
5.3%
5.7%
6.8%
6.1%
4.7%
3.4%
2.3%
1.4%
1.7%
4.1%
4.3%
3.7%
3.4%
3.6%
4.3%
4.0%
4.0%
3.5%
2.4%
1.6%
1.2%
0.9%
1.5%
8% 3% 2% 7%
0 - 4
5 - 9
10 - 14
15 - 19
20 - 24
25 - 29
30 - 34
35 - 39
40 - 44
45 - 49
50 - 54
55 - 59
60 - 64
65 +
Higher Education age group
18 years – 24 years3.7 Million 5.5 Million
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%
%
The population of the Kingdom of Saudi Arabia stood at
34.2 million in June 2019, rising from 27.1 million in 2010,
growing at a CAGR of over 2.6%. In 2018, the proportion
between Saudi nationals and expatriates was observed to
be 62% and 38% respectively.
Similar to other GCC countries, KSA also has a young
population profile fueling sustainable demand for higher
education in the long-term.
As of 2018, out of 33.4 million population, 3.7 million
(11.2%) is aged between 18 - 24 years, which is expected
to increase to 5.5 million (12.1%) by 2030 with total
population size of 45.4 million.
Out of 13 provinces, Makkah, Riyadh
and Eastern Province constitute 22.3
million or 66.7% of the total
population.
Riyadh and Makkah provinces also
have the highest concentration of
expatriates (non-Saudi Nationals)
with 46.7% and 42.8% respectively.
Makkah –
8.8 m
(26.3%)
Riyadh –
8.5 m
(25.3%)
Eastern
Region –
5.0 m
(15.0%)
Others –
3.5 m
(10.9%)
Aseer
Reg
ion
–
2.3
m (
6.8
%)
Mad
ina
h –
2.2
mil
lio
n (
6.5
%)
Jazan –
1.6 m
(4.8%)
Al-Qaseem
– 1.5
(4.4%)
“
“
Total Population
(18 yrs - 24 yrs)
Source: General Authority of Statistics, Colliers International Analysis
Key Higher Education Indicators
Key Highlights
• Enrolment: A total of 1.62 million students out of 3.73 million population between the age group of 18-24 years, were
enrolled with higher education institutes across Saudi Arabia in 2017. 95% attended public sector institutions, indicating
heavy reliance on public sector for higher education as they offer better quality of education and higher probability of
finding a job in both public and private sectors.
• Market dynamics: Overall, enrolment of male students is slightly higher (51%) compared to female students. A closer
look reveals that while public and private universities have higher proportion of female students at 52%, proportion of
male students is significantly higher (80%) at other public institutions offering technical/vocational /military courses.
Furthermore, business and management courses are most popular with students (20.8% share in public universities).
Area distribution shows that approximately 75% of student population is concentrated in four provinces - Riyadh,
Mecca, Eastern Provinces and Madinah.
• Outlook: As a part of its economic transformation plans, the government of Saudi Arabia has focused on privatisation
of the higher education sector to meet future demand. Colliers analysis estimates that the Kingdom will require more
than 640,000 seats by 2030.
20182019 2017
Student Population by
Gender
Male, 819,711, 51%
Female, 800,780,
49%
Total Population
June 2019 Estimate
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Students Enrolled
1.62 MN
Private College
30
Private Universities
28
Student Population
concentrated in four regions
75%
Enrolment in Bachelor
programs
84%
Private College Market
Share
5%
• Total registered students at higher education institutes including
technical and vocational public institutes reached 1.62 Million in 2017,
nearly doubling from 850,000 in 2009, a CAGR growth of 8.9%.
• Public universities/institutes account for majority (95%) of the student
enrolment with 1.54 million students enrolled, owing to better quality
and employment prospects, a consistent trend over the last five years.
• The total revenues of the 21 public universities in Saudi Arabia
amounted to about SAR 400 million (US$ 107 Million) in 2017.
• 85% of the total enrolment is in Bachelor programs, other institutes
providing technical and vocational education have recorded highest
CAGR at 6.1%.
• To further develop the sector, Saudi government plans to double the
participation of private sector under the National Transformation
Program (NTP), creating opportunities for the private sector.
Source: Ministry of Education of GCC Countries, SAGIA, Colliers International Analysis
Public and Private University students
by Education Level (2017)
6-year CAGR: 3.5%
6-year CAGR: 0.9%
6-year CAGR: 6.1%
1,1
65,0
91
1,3
59,4
47
1,3
23,6
92
1,4
00,2
72
1,4
25,5
69
1,3
85,6
20
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
75,1
19
74,5
69
78,7
98
88,7
16
85,4
31
78,5
79
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
11
6,3
92
11
4,6
80
12
5,2
79
13
3,4
28
16
9,9
13
15
6,2
92
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Diploma12%
Bachelor84%
Higher Education
4%
Note: Other includes public technical and vocational institutes
50,913students per public
institute
2,848students per private
institute
18,879
students per
institute
(42%)
(45%) (13%)
Student Enrolment by type of
Institution (2016)
Note: Other includes public technical and vocational
institutes
Public Institution
1,425,569
Oth
ers
169,9
13
Student Enrolment at Public Institutions
Student Enrolment at Private Institutions
Student Enrolment at Other Institutions
Private
85,4
31
Number of Higher Education
Institutes in KSA (2016)
50,913students per public
institute
2,848students per private
institute
(45%) (42%)
18,879
students per
institute
(13%)
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Source: Ministry of Education, KSA 2017, Data for 2015
Note: Does not include ‘Main Program’ as not clearly defined in statistics provided.
Social
& Behavioral
Studies
4
Share : 6.8 %
4-Yr CAGR : 5.6%
Enrolment : 95,817
1Business &
Management
Share : 20.8%
4-Yr CAGR : 11.8%
Enrolment : 291,622
2Humanities
Share : 14.9 %
4-Yr CAGR : 2.3
Enrolment : 208.036
Islamic Studies
Share : 12.9%
4-Yr CAGR : 3.4%
3
Economic transformation and diversification program under Vision
2030 is expected to spur demand for higher education, however, the
current enrolment structure in public universities is not in alignment
with the job sector, with significant enrolment in humanities, Islamic
studies and behavioral sciences.
Colliers expects demand to move from traditional offerings to Artificial
Intelligence (AI), Robotic Sciences, Nuclear Energy, Sustainable
Energy, Renewable Energy, Solar Energy etc. Additionally, demand
is expected to shift towards evidence based and Research &
Development (R&D) studies taking into consideration Vision 2030
economic transformation agenda and the changing market demand,
rather than traditional teaching style to reduce the “mis-match” of
degrees and jobs.
Colliers also expects a significant increase in offerings in the
health, hospitality and SMEs sectors.
The Kingdom has invested in major tourism projects and is
reshaping regulation to boost tourism. Other initiatives involve
setting up a Social Development Bank with a budget of SR 22
billion (US$6 billion) to support the establishment of more than
70,000 small-size enterprises in the private sector. Further,
Saudization drive in various sectors will see increased demand for
higher education. Colliers expects the demand to be focused on
specialised degrees (in alignment with job market) rather than
traditional degrees.
Future Demand to change as a result of economic diversification under Vision 2030
Enrolment : 180,191
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Healthcare
• Vision 2030 includes a number of strategic sectors, including
reforming tourism sector by increasing capacity of visitors,
doubling number of UNESCO heritage sites by expanding
accreditation to other sites.
• To promote tourism the Saudi government also announced a
new visa regime in September 2019, opening its doors to
foreign tourists with an initial list of 49 countries. The target is
to increase the contribution of tourism sector to 10% of the
GDP by 2030 by the current level of 3%, attracting 100 million
annual visits in 2030, up from current level of 40 million.
• The Saudi Commission for Tourism and National Heritage
estimated that there will be approximately SAR 250 billion
($67 billion) of investments is needed, including 500,000 new
hotel rooms by 2030, which are expected to build equally by
the public and private sector. The developments are expected
to create around 1 million tourism jobs.
• The Labour ministry has announced 100% Saudization of
jobs in the tourism hospitality sector for 20 jobs including hotel
deputy manager, assistant head of IT Administration, director
and assistant director of sales administration; sales
representative and sales manager, fitness club supervisor,
public services supervisor in a hotel, goods receiving clerk,
room service orders clerk, restaurant or café waiter, tourism
enquiry clerk, executive secretary, general administrative
clerk, administrative employee and administrative coordinator
• All these factors are expected to increase the demand for
tourism and hospitality related education.
• One of the key, yet often ignored, requisites to provide quality
healthcare service is the availability of human capital. Without the
availability of qualified and specialised human resources, even
the best medical facilities with the most advanced medical
equipment are substandard.
• By 2030, due to the increase in population, which is expected to
reach 45 million, and requirement of new healthcare facilities,
additional 29,000 to 47,500 beds will be required. There will be
additional demand for doctors, nurses, pharmacists and allied
health professionals (AHP).
• The demand will be even higher as a part of Saudization drive in
the healthcare sector majority of these jobs must be filled by
Saudi Nationals. Presently, 68% of doctors, 62% of nurses, 22%
of AHPs and 76% of the pharmacists, which total to around
223,000 medical professionals, are expatriates.
• Furthermore, as the Kingdom embarks towards the adoption of
new medical technologies resulting in demand moving from
traditional courses to advanced medical education. Artificial
intelligence (AI), data analytics, robotic medical sciences,
genome sequences and short courses to enhance the skill set of
doctors, registered nurses (RN) and AHPs to be able to opt for
specialised positions; all of which will require additional facilities.
HEALTHCARE DEMAND
Based on Colliers analysis, the additional number of
human resources in the healthcare sector by 2030 will be
as follows:
Non- Saudi Workforce
(2018)
Additional
Demand 2030
60,00049,000
114,00066,000
27,00045,000
Doctors: at 2.4 Doctors
/ 1,000 Population
Nurses: at 5.7 Nurses
/ 1,000 Population
AHP: at 3.7 APC / 1,000
Population
HOSPITALITY & TOURISM JOBS
Based on Colliers analysis, following jobs will be
demand by 2030 in hospitality sector
• Current Supply 2018: 542,566 keys (Source:
MAS)
• Number of Hospitality Staff (2018): 442,052
(Source: Euromonitor)
• Expected/ Projected New Supply (2019 to
2030): Approximately 108,000 keys (Source:
Operators, STR & Colliers)
• Total Rooms: Approximately 650,300 keys
• Total Number of Hospitality Staff (Applying
Staff to Room Ratio): Approximately 530,000
• New Additional Number of Hospitality Staff
required by 2030: Approximately 88,000; in
addition, non-Saudi staff to be replace by
2030, over 400,0000
Source: Colliers International Analysis
Hospitality & Tourism
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Source: SAGIA, Ministry of Education, Colliers International Analysis
Approximately 75%
of student enrolment
is concentrated in
four regions
• The total students in public education institutions were 1.4 Million and top five public universities enrolled 661,517
students in 2016/17, accounting for 46% of total enrolment in public universities. King Faisal University located in Riyadh
is the largest university in KSA in terms of enrolment with 191,492 students.
• Whereas, total students in private education institutions were 85,431 and top five private institutions enrolled 38,697
students in 2016, constituting 45% of total private higher education enrolment. Arab open university located in Riyadh is
the largest private university enrolling 15,837 students.
19
1,4
92
17
6,1
87
11
7,0
77
10
7,2
35
69
,52
6
King Faisal King Abdulaziz Al ImamMohammed
Um Al Qura Taibah University
15
,83
7
6,8
50
5,6
67
5,5
96
4,7
47
Arab OpenUniversity
Al GhaddInternationalColleges of
Health Sciences
Tech. &BusinessUniversity
PrinceMohammed Bin
Fahad
Prince Sultan
Top Five Public Universities by Enrolment
(2016)
Top Five Private Colleges by Enrolment
(2016)
Market Supply of Higher Education Institutions
• There was a total of 67 higher education institutions in KSA in 2016.
• A little under 75% of the student enrolment is concentrated in four provinces
of Riyadh, Mecca, Eastern Provinces and Madinah.
• Province of Riyadh has 22 institutions, constituting 33% of total provision.
Source: SAGIA, Colliers International Analysis
Northern
Borders
Eastern
Province
Riyadh
Qassim
Jouf
Tabuk
Madinah
Mecca
Baha
Hail
Jizan
1
1
2
3
4
6
8
7
9
10
11
12
13
16,107
1
35,611
1
74,340
5
385,389
22
270,317
9
19,223
1
Najran
61,450
1
29,082
1
36,715
2
89,283
5
373,610
13
27,255
2
84,969
3Asir
2
3
4
5
6
7
8
9
10
11
12
13
5
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One important aspect which is expected to have a
significant impact on the provision of higher education in
KSA is outbound Saudi student mobility. Based on latest
data available from General Authority of Statistics (GAS),
a total of 122,532 Saudi students were studying abroad as
of 2017/18. Numbers have reduced by 39% (76,753
students) compared to 2012/13. This is significant drop
since 2013/14 when almost 200,000 Saudi students were
pursuing higher education abroad, with the majority (87%)
fully funded by the King Abdullah Scholarship Program
(KASP).
• Based on reports issued by the Institute of International
Education (IIE) in 2017, as a result of declining oil
prices, budgetary constraint, expected changes to the
KASP scholarship program and restrictions by some
US universities, there has been a decline in numbers of
oversees students.
• Highest percentage of decline is from students visiting
Canada (-61%), Asian Countries (-54%) and Arab
Countries (-52%).
• Engineering, Manufacturing and Construction students
account for the highest proportion of students at 31.6%
(38,730 students) followed by Business, Administration
and Law at 20.3% (24,860 students) and Health and
Welfare students at 17.1% (20,931 students).
• Key fields of study that witnessed the most decline in
number of students include Business, Administration
and Law (39,086 students) and ICT (13,067 students)
and Health and Welfare (9,435 students). This
indicates that there is a general acceptance among
students to study these courses in KSA.
• With respect to qualifications, highest number of
students are enrolled in Bachelor programs at 55%
(67,400 students) followed by Master's students at
22.5% (27,589 students).
• While enrollment for Doctorate and High Diploma
programs has increased by 30.1% (3,125 students)
and 106.3% (68 students) respectively, Bachelors and
Master program registered a decline of 44% (52,931
students) and 41.9% (19,867 students) indicating an
increasing preference towards higher education for
students going abroad for higher education.
• In conclusion, there is a steady decline in the number
of Saudi students studying abroad, more so in students
opting for Business / Administration and ICT related
courses and Bachelors and Masters programs. This
provides a target segment for private segments for
private universities looking to expand in the KSA.
Source: General Authority of Statistics (GAS), Colliers International Analysis
Top Designation for Saudi Higher Education Students
Source: General Authority of Statistics (GAS), UNESCO Institute of Statistics (2019), Colliers International Analysis
Australia:
6,744 (5.5%)
USA: 71,472
(58.3%)
UK: 14,874
(12.1%)
Canada:
7,438
(6.1%)
European
countries:
6,899
(5.6%)
Arab Countries:
10,938
(8.9%)
Australia : 6,744
(5.6%)
Asian
Countries:
4,108
(3.4%)
All these factors are expected to
increase the demand for higher
education and in Colliers’ opinion
the private sector in the Kingdom,
similar to the UAE and Egypt,
should open branch campuses of
international universities in the
Kingdom, especially targeting those
universities which currently host
most of the Saudi students in their
country of origin.
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2030 Projections
Based on The Saudi Arabian General Investment
Authority (SAGIA) population projection of 2.5%
per annum, the Kingdom population is expected to
reach 45 million by 2030.
Implications for Higher Education
Sector
Based on SAGIA population growth rate of 2.5%
per annum, the total demand for higher education
enrollment will reach 2.26 million in 2030,
compared to 1.62 million in 2017, an additional
demand for more than 640,000 new seats in the
Kingdom by 2030.
Total Seats
1.62 million2017
Private Sector
0.08 million2017
Public Sector
1.54 million2017
Total Seats 2.26 m => Additional Seats 0.64 m
Total Seats 2030
Private Sector2030
Public Sector2030
Total Seats 2.15 m => Additional Seats 0.61 m
Total Seats 0.11 m => Additional Seats 0.03 m
Source: SAGIA, Colliers International Analysis
Note: Numbers may not add due to rounding
Public includes technical and vocational institutes
In conclusion The
Kingdom will require an additional
640,000 new seats by 2030.
Supported by the Saudi
government’s role shifting from a
regulator to facilitator, this
presents significant opportunities
for the private sector. However, it
is important that education
institutions focus on providing
students with qualifications that
compliment the modern employer
requirements.
Changes in Regulation and Resulting Opportunities in
Education
As one of the 9 priority sectors identified in Vision 2030,
education is front and centre in KSA planning for the
future, so much so that education is one of the largest
areas of spending in the 2019 national budget with an
allocation of US$ 51 Billion In order to progress Vision
2030 the National Transformation Program 2020 was
developed, one if its stated objectives in the field of
education is the ‘increase of private sector participation in
education and training’.
Practical Changes
The Saudi Arabian General Investment Authority
(“SAGIA”) has been working closely with the Ministry of
Education (“MOE”) and the Technical and Vocational
Training Corporation (“TVTC”) to streamline the approvals
process for foreign investors in the education sector.
SAGIA
Foreign investors may be 100% shareholders in a
company licenced by SAGIA to provide university
education. A foreign investor may invest as a sole
shareholder or together with another investor (Saudi or
foreign).
The foreign investor must be able to present its
commercial registration and its audited financial
statements for the last financial year (certified by the Saudi
Embassy in its home country).
The foreign investor must be able to demonstrate that is
well regarded on the international stage by proving:
• Its academic programs for bachelor’s programs should
be included in the list of the top 200 universities for
each of the academic disciplines classified according to
international standards www.qs.com/rankings;
• The postgraduate programs of the foreign investor
should be in the top 200 programs according to the
shanghai classification of graduate programs
(www.shanghairanking.com/index.html).
SAGIA previously also required foreign investors to submit
a pro forma letter of commitment to meeting certain criteria
(including in relation to limits on the time for which non
Saudis could be employed and the content of the
curricula) but this is no longer required.
Other approvals required
The foreign investor will not be able to practice its activities
until it has completed the incorporation formalities with the
Ministry of Commerce and Investment.
Ministry of education approval is required for universities
and the approval of the Technical and Vocation Training
Corporation is required before the approval of a licence for
the construction and management of higher institutes.
The requirements for approval differ depending on the
type of licence required (initial approval, general
accreditation licence, special accreditation licence or final
licence). Approval will also be required for buildings and
facilities.
Public Private Partnerships
The old procurement law (the Government Tenders and
Procurement Law or GTPL) has served well as a method
of procuring input-based, client specified assets and some
limited ancillary service provision. It was, however,
unsuited to the procurement of complex outputs or
outcome based services where the costs of assets and
services are bundled into a “unitary charge” delivered
against attainment of key performance indicators over a
long term concession period. That old has been replaced
by a revised (and highly innovative) new GTPL which is
expected to come into force in late 2019. Some of the
innovations in that new law (such as the ability to have
framework agreements, tendering through an electronic
portal and reverse auction tendering) remain to be fleshed
out in the Implementing Regulations.
Parallel to the new regime for conventional procurement,
the regulatory framework in respect of PPP is developing
quickly.
The National Center for Privatisation (“NCP”) was
established to regulate privatisation in KSA. Article 3 of
the Statute for the National Centre for Privatisation states
explicitly that public private partnerships shall be deemed
privatisation. The NCP is tasked with establishing the
frameworks under which privatisation occur.
Council of Ministers Resolution No (665) establishes the
institutional framework under which the NCP will operate.
Pursuant to that resolution NCP has promoted a system of
sectoral/supervisory committees relating to sectors
targeted for privatisation – this includes education.
The NCP published a Privatisation Projects Manual (the
“Manual”) in May 2018. The Manual sets out a
methodology for procurement which is mandatory.
However there do remain some regulatory gaps – many of
these were addressed in the draft Private Sector
Participation (“PSP”) Law published in 2018 but not yet
finalised.
Royal Decree No. (101) was officially published in the
Official Gazette on 18 July 2018. That decree disapplied
the old GTPL from privatisation projects and was a
welcome clarification in that regard pending formal
adoption of the draft PSP Law (which has yet to occur).
Therefore the precise extent to which the new GTPL
applies to such projects will hopefully become apparent
once its own Implementing Regulations are published.
As the draft PSP Law has not yet been finalised there may
still be changes in both the draft law and the Manual
consequent on that consultation exercise. The interplay
between the Royal Decree, the draft PSP Law, the Manual
and the new GTPL are yet to be fully determined and will
likely develop further.
Conclusions
Huge strides have been made in education reform in KSA
over a very short period. Likewise the institutional and
regulatory architecture to enable private sector investment
has also made significant progress. The next eighteen
months will see a steady increase in the number and scale
of opportunities coming to the market.
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FOR MORE INFORMATION
Ian Albert
Head of Research & Advisory
Colliers International | MENA
Imad Damrah
Managing Director
Colliers International | KSA
Mansoor Ahmed
Director I Development Solutions |
Healthcare | Education | PPP
Colliers International | MENA
+971 55 899 6091
