Robust growth for GCC's education sector

Robust growth for GCC's education sector
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Published June 21st, 2012 - 14:00 GMT via SyndiGate.info

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Higher demand for education will propel growth in the number of schools in the region
Higher demand for education will propel growth in the number of schools in the region
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Alpen Capital Group
,
Sanjay Vig
,
Sameena Ahmad

The GCC Education sector is poised for robust growth in the future, a leading regional investment bank has said. According to the Alpen Capital Group, which has a presence in the Kingdom in the form of Alpen Capital (Bahrain), the growth is on the back of increasing population, rising private sector participation, and increased willingness of parents to ensure high-quality education of their children. Earnest intention of the governments to improve the coverage and quality of education in their respective countries through various reform measures also bodes well for the sector.

In its GCC Education Industry report, the firm said it expects the total number of students in the GCC region to grow from an estimated 10.2 million in 2011 to 11.6m in 2016, registering a compound annual growth rate (CAGR) of 2.7 per cent.

Growth in the total number of students in the pre-primary and tertiary segments is expected to outpace the growth rate of primary and secondary segment. The pre-primary segment will see a growth rate of 11.2pc, followed by tertiary segment at 4.8pc, primary segment at 1.7pc and secondary segment at 1.6pc. Total enrolment in pre-primary, primary and secondary education segments in private schools will grow at a CAGR of 10.2pc.

The share of students in the pre-primary segment is expected to increase from 5.3pc in 2011 to 7.9pc in 2016, while the share of tertiary students is expected to rise from 12pc to 13.4pc during the same period. This is due to the fact that these segments are currently under-penetrated and expected to grow at a relatively faster pace.

The share of students in private schools is expected to grow from 21.1pc in 2011 to 30.4pc in 2016. Private school enrolment in Bahrain is expected to grow at a CAGR of 5.9pc between 2011 and 2016.

Higher demand for education will also propel growth in the number of schools in the region. By 2016, the region is likely to have a total of 51,450 schools; out of which 20.6pc will be private schools.

According to Alpen Capital Managing Director Sameena Ahmad: "Despite the challenges that private providers face in terms of high initial investment and running costs, the education sector remains an attractive investment opportunity across the region." Elaborating on what makes the sector an attractive proposition for private investors, Alpen Capital Managing Director Sanjay Vig said: "The GCC governments realise that education is a pivotal pillar in the development of any nation and have undertaken several initiatives to enhance the quality and reach of education. Although the private school market across the GCC is highly fragmented, it still offers significant opportunities for new investments and ample room for consolidation for existing players."

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