Understanding Middle East Education
The UAE is one of the more mature education markets in the region and remains a draw for investors, providers and students. Its scale and ambition remain undimmed, but what is the reality on the ground? What do the trends over time tell us about the education sector by segment, and what are the key differences between its main markets?
Sources: World Economic Forum, HSBC Expat Explorer, PwC Middle East Economy Watch, S& Investment opportunities in the GCC education sector, YouGov Omnibus Research 2018
Global Competitiveness Index Rankings (2015, 2016, 2017)
|Change from 2016-17 to 2017-18||2017-18||2016-17||2015-16|
|Quality of primary education||⇓||16th||12th||13th|
|Quality of higher education||⇓||12th||10th
|Primary education enrolment, net %||⇑||87th||100th||94th|
|Secondary education enrolment, gross %||NA||71st||67th|
|Tertiary education enrolment, gross %||⇑||94th||96th||99th|
The UAE continues to be the most competitive country in the Arab World according to the Global Competitiveness Index, but its ranking dropped back to 2015-16 levels in 2017-18. This was mainly due to the relative improvement of other countries, highlighting a need to accelerate change. Education was highlighted as a key driver of competitiveness.
PISA Results (2012, 2015)
Sources: OECD, Ministry of Education, International Monetary Fund
PISA Rankings: between 2012 and 2015 the UAE moved up one spot in Mathematics, where it now stands in 47th place, but fell two places in Reading, from 46 to 48 and in Science, from 44 to 46. However, the UAE Government has an aspiration to move into the top 20 by 2021.
PISA Scores: both UAE scores and OECD average scores dropped compared with 2012 levels. The UAE scores are the highest in the region, but remain below the OECD average. Dubai private schools offering international curricula performed better than private and public schools offering MoE curricula. The MoE curricula is being modernised to address this issue.
TIMSS Scores show significant improvement for Dubai in Mathematics and Science (4th & 8th Grade) and small improvement for Abu Dhabi in 4th Grade Mathematics & Science, with drops in 8th Grade Mathematics & Science performance.
TIMSS Results (2011, 2015)
|Math 4th Grade
|Abu Dhabi||417||Abu Dhabi||⇑||419|
|Math 8th Grade||UAE||456||UAE||⇑||465|
|Abu Dhabi||449||Abu Dhabi||⇓||442|
|Science 4th Grade||UAE||428||UAE||⇑||451
|Abu Dhabi||411||Abu Dhabi||⇑||415|
|Science 8th Grade||UAE
|Abu Dhabi||461||Abu Dhabi||⇓||454|
Pre-K Enrolment Estimates (2013-2021)
*: Estimated figure for Abu Dhabi and actual data for Dubai
**: Population estimates include half the 4 year old population to account for academic year considerations
Sources: UN, Dubai Statistics Center (DSC), Statistics Centre Abu Dhabi (SCAD), PwC Analysis
Whilst Dubai has reported having more than 200 nurseries, (around 50 more than Abu Dhabi reported), nursery enrolment in Abu Dhabi has seen faster growth, which, if it continues, will result in an expected 2016-2021 CAGR of 11.5% compared with 9% in Dubai. Overall we expect growth to continue as the emphasis on the importance of early childhood education increases, alongside a move towards higher female participation rates in the workforce.
OECD average participation rates of 0-2 year olds are estimated at 33%, compared to estimated participation rates of 7% in Abu Dhabi and 10% in Dubai.
More than 150,000 new students will enroll between 2016 and 2021 in private K-12 if enrolment growth continues at the current rate – although some of this will be absorbed by capacity in existing school with low utilization rates, particularly those most recently opened.
Private education enrolment is expected to grow at a CAGR of ~4%, almost 4 times higher than the rate of public education enrolment growth.
K-12 Enrolment Estimates (2013-2021)
* Population estimates include half the 4 year old population and half the 18 year old population to account for academic year considerations.
Sources: UN, Ministry of Education, International Monetary Fund, PwC Analysis
Dubai’s average fees per student is around 26,000 AED, with the majority of schools charging fees below 30,000 AED, particularly where schools tend be bigger and have ratings of “Good” or lower. The majority of “Very Good” and “Outstanding” Schools charge average fees over 40,000 AED. There is a market gap for schools in the 30,000-50,000 AED range, specifically for high quality schools.
Private School Fee Distribution by Size, Curriculum and Rating in Dubai (2017)
* Estimated figure for Abu Dhabi and actual data for Dubai
Sources: Knowledge and Human Development Authority (KHDA)
Higher education enrolment grew between 2013 and 2015 but fell in 2016, due to a drop in private enrolment estimated at -2.5%. If enrolment continues to drop at the same pace, the market will lose more than 10,000 students in private HE by 2021, in what could be called a pessimistic scenario.
On the other hand, the 18-24 population is projected to grow at a CAGR of around 2% (2017-2021), inbound student numbers exceeded 70,000 in 2016, and recent reforms have extended student visas from 1 year to 5 years and up to 10 years for “exceptional” students. These factors, in addition to arrival of highly ranked universities such as University of Birmingham, are likely to drive recovery in a “supply driven” market, closing some of the gaps resulting from the small range of programs currently offered. An optimistic scenario could see private enrolment continuing to grow linearly at a CAGR of 3.5%, adding more than 21,000 students by 2021.
The reality may be somewhere between these scenarios, where some recovery is expected, but at a growth rate lower than that seen over the past few years. We estimate both public and private enrolment will grow at a CAGR of around 0.7%, resulting in more than 5,500 extra enrolments by 2021.
Higher Education Enrolment Estimates (2013-2021)
*2014 is an estimate
Sources: Knowledge and Human Development Authority (KHDA), UN, UNESCO, Federal Competitiveness and Statistics Authority (FCSA), PwC Analysis
In Dubai private provision makes up a much larger proportion of seats while in Abu Dhabi the split is even, likely driven both by the fact that ~70% of Abu Dhabi students are Emiratis, compared with ~35%,in Dubai. Equally important for understanding the difference is the impact of Dubai’s academic free zones, which attract a large number of private universities and international branch campuses to the Emirate, making private higher education a more attractive option for students seeking quality international education.
Higher Education Enrolment Estimates by Emirate and by Sector (2016)
Sources: Knowledge and Human Development Authority (KHDA), Dubai Statistics Center (DSC), Federal Competitiveness and Statistics Authority (FCSA)
Global Education & Skills Network Leader, PwC Middle East
Tel: +971 (0)56 6820539
Partner, Education, PwC Middle East
Tel: +971 (0)50 900 3094