GCC education sector faces rising costs, teacher shortage despite student growth: Report

Dubai: The GCC education sector is projected to experience a significant increase in student enrolment over the next five years, reaching 15.5 million from 14 million by 2029, according to a new report by Alpen Capital.

However, this growth is accompanied by increasing challenges for private operators, including rising operational costs and a shortage of qualified teachers.

The UAE-based investment banking advisory firm said in its latest GCC Education Industry report that private education providers are facing mounting expenditure on teacher retention, real estate, and digital infrastructure. These cost pressures are exacerbated by the highly competitive nature of the market, with a growing number of premium international schools vying for students.

The report also pointed to a continuing shortage of skilled teachers and educational staff across the sector. This issue is becoming more intense with the rapid expansion of high-end international schools that require top-tier teaching talent.

Poonam Bhojani, CEO of Innoventures Education, said, “At this juncture, the greatest barrier to growth has been the high cost of real estate and construction-related challenges as the GCC expands. There are also gaps between education outcomes and labour market needs, teacher shortages, and disparities in access to quality education across urban and rural areas.” The rapid digital transformation has also exposed digital infrastructure and training gaps, said Poonam.

Meanwhile, Sameena Ahmad, Managing Director at Alpen Capital, said that the demand for private education continues to rise, supported by sustained economic growth, a growing population, rising affluence, and a strong preference for globally recognised curricula.

“However, institutions are facing pressure from rising operational costs and a shortage of qualified teachers, particularly in an increasingly competitive and quality-conscious market,” she said.

The report, however, also said that regional governments are taking targeted steps to address these shortages. In Kuwait, the Ministry of Education has announced plans to mitigate shortfalls by reinstating experienced Kuwaiti teachers who had retired or previously terminated contracts.

Additionally, to address a critical shortage of Mathematics teachers in 2025, the Ministry is considering recruiting civil engineering graduates for teaching roles.

The rapid growth of premium international schools has intensified competition for high-calibre teaching talent. Several GCC countries have introduced policies to attract and retain international teaching talent.

The UAE, for instance, has expanded its Golden Visa program to include teaching professionals. In Ras Al Khaimah, the Department of Knowledge launched a dedicated Golden Visa initiative targeting private school teachers, offering eligible educators long-term residency through self-sponsorship.

Saudi Arabia has also eased regulations, now permitting the employment of expatriate dependents in both the education and healthcare sectors, read the report.

Despite these challenges, investor sentiment in the education sector is largely favourable. The report forecasts a robust compounded annual growth rate (CAGR) of 2.1 per cent for student enrolments in the GCC between 2024 and 2029.

The K-12 segment is expected to grow similarly, reaching 12.9 million students by 2029. This growth is predicted to be driven by sustained economic expansion in the region and a consistent rise in population, leading to a larger school-age demographic.

Hameed Noor Mohamed, Managing Director, Alpen Capital (ME) Limited, said, "The education sector of the GCC offers a strong growth outlook, with investor interest remaining high, driven by robust fundamentals and sustained long-term demand.”  

He added, “This creates substantial opportunities for regional and international education providers to establish or scale their presence in a growing market."

The report also anticipates a rise in demand for schools across the GCC, with over 2,800 new schools needed by 2029. Private schools are expected to see a faster demand growth than public schools. Saudi Arabia is projected to remain the largest education market in the GCC. At the same time, Oman is expected to lead in an annualised growth rate, followed by Bahrain at 2.4 per cent, and the UAE and Qatar at 2.2 per cent.