The education sector also needs a quality assurance rating system to help parents and students make informed choices regarding university education.
"Increasing private investments in university education could produce greater benefits including enhanced access to university education," the bank said.
Private investments would also help improve the quality of education with the increased competition.
"Creating a favourable environment for private investment in university education requires developing new legislation, regulations and accreditation policies," the bank said.
It suggested the government could seek alternative methods to encourage private investment in university education such as establishment of private degree awarding colleges or institutions in selected disciplines.
The government could also al