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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Oman’s private education market set to grow to $1.8bn in five years

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Business Reporter -


MUSCAT, MAY 15 -


Oman’s private school market has the potential to grow from $1 billion in 2016 to $1.8 billion in 2023, according to a new report by The Boston Consulting Group (BCG), entitled ‘Where to Invest Now in the GCC Private Education’.


Growth in the private education market will be driven primarily by one factor: Enrolment growth. Only 23 per cent of Oman’s 730,000 students are enrolled in private schools, lower than the 30 per cent GCC average, indicating plenty of room for growth. Enrolment in private schools in Oman has grown at a 7 per cent CAGR, whereas enrolment in public schools has only grown at a 2 per cent CAGR. This trend is expected to continue, albeit at a slightly slower rate.


The private education sector in Oman is relatively immature, with a restrictive regulatory environment. Government scholarships favour public school students, placing private school students at a slight disadvantage if they hope to be selected for scholarships to study abroad.


“The private education market has become increasingly complex and competitive in recent years, particularly in mature markets such as the UAE — and these shifts have implications for investors,” said Maya El Hachem, Principal at The Boston Consulting Group. “Omanis place more value on the quality of education than ever before, and the government is engaging with the private sector to increase enrolment in preschools. The private school market is highly fragmented, composed mostly of standalone private schools, and there is a need for high-quality private international schools with low- to mid-range fees.”


Across the GCC, the private education market is becoming a magnet for investors, and rightly so, as it is expected to double over the next five years. Despite the fact that strong growth has been predicted across the region, investors must fine-tune their strategies to account for the shifting circumstances before committing to an investment opportunity.


The report identified four drivers of growth in private education, affecting markets across the GCC:


Shift towards Private Schools: At $11,000 per student per annum, private school spending is higher in the GCC region than in OECD counterparts. Parents across the region are becoming increasingly willing to pay for private schools that provide differentiated offerings and improved outcomes — and this trend will likely grow now that governments are beginning to publish performance ratings for all schools.


Tuition Fees: Across the GCC region, tuition fees for private education will continue to rise 2 per cent to 4 per cent per year. However, tuition fees are rising at a slower rate than in recent years owing to tighter regulations and an economic environment that limits consumer spending. Expatriates are also facing increased financial pressure as employers have begun to scale back their tuition-reimbursement packages. Some governments have placed caps on tuition hikes: in recent years, Kuwait has limited tuition hikes by 0 per cent to 3 per cent, and the UAE and Bahrain recently set a limit of 5 per cent, linked to the education inflation index and schools’ performance.


Population Growth: The student-aged population (age 3 to 17) is expected to grow at a Compound Annual Growth Rate (CAGR) of 1 per cent to 3 per cent. The expatriate population is expected to grow even faster than national populations, and expatriates attend private schools.


Enrolment Growth: Private school enrolment at the primary level and above is high throughout the GCC and expected to remain steady. Enrolment rates at the preschool level (ages 3 to 6) are growing, most notably in Saudi Arabia, which has the largest overall population in the GCC region and the lowest kindergarten enrolment rate (less than 20 per cent kindergarten enrolment in Saudi Arabia versus 60 per cent to 90 per cent in the rest of the GCC).


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