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The role of higher education is vital in successful functioning of a state, especially of post-conflict states, such as that of Bosnia-Herzegovina, that are in the process of peacebuilding, state-building and nation-building. Therefore, this paper deals with prospects and challenges of private higher education in Bosnia-Herzegovina. In order to put in the perspective private higher education, the author examines its possible role in bringing about economic development, political stability and education development. The author uses ethnographic research methodology, written sources and international and local education reports. Thorough analysis of the relationship between, on one side private higher education and, on the other side, economic development, political stability and education development indicate necessity for the greater role of private higher education in Bosnia-Herzegovina.