With 46 countries in Sub-Saharan Africa (“SSA”), generalisations should be avoided when analysing the merits of a particular sector.
Nevertheless, in Education Technology, a few trends are becoming increasingly clear, and giving cause for optimism about arguably the most important driver of growth and development in this region.
First – some context. Education in the region is fragmented with different levels of access, quality, and affordability across all levels (K-12, secondary, and higher education). This causes inherent inequality and puts SSA behind other regions in developing its knowledge capital. Of the 59 million out-of-school children of primary school age globally, 32 million live in SSA. These out-of-schools figures include one-fifth of 6-11 year olds, a third of 11-14 year olds and 60% of 15-17 year olds.
The public sector’s shortcomings mean funding has not kept pace with enrolment growth – making access and quality a challenge. In Nigeria, out of a population of 200 million, total university enrolment stands at two million – a mere 1% of the population. In South Africa, higher education is supply constrained. The applicant-to-seat ratio is over three to one at public institutions.
When we factor in the macroeconomic fundamentals defining SSA’s future growth – rapid population growth, urbanization, technological change, and making its way in a globalizing world – the need to address the access and quality gaps in education is necessary and urgent.
Economic growth in the region is already being driven by technological innovation and in internet and mobile penetration. Applications of this developing infrastructure and improving connectivity in the education sector will increase access, reduce costs, and improve quality – all of which will drive higher retention across all schooling levels.
The experience of the pandemic has magnified these issues, and private players are now trying to fill the vacuum. EdTech start-ups are creating solutions for long-distance learning including online tutoring, access to online studying material, and more.
Tertiary education was most significantly disrupted by the pandemic, with tech-enabled supplementary education platforms accelerating in higher education. In SSA, there are promising models already functioning in schooling systems and across countries, such as Eneza Education (Kenya, Ghana, and Tanzania), PrepClass (Nigeria), BRCK Education (Kenya), and Siyavula (South Africa). It is still early, and there is limited data on financial sustainability, but distance learning spurred by Covid-19 is showing early potential.
uLesson’s recent $7.5 million Series A round shows this, with Andela – now valued at $700 million – even more indicative of the market’s potential. By connecting developers in emerging markets to global tech companies, Andela is addressing a major discrepancy between global supply and demand of talent.
Longer term, growth markers are even clearer
Research by GSMA Intelligence forecasts 66% of SSA will have a smartphone by 2025. Traditional value chains are being disrupted by mobile-enabled platforms, enabling EdTech to make content accessible for learners, and training content available for educators. Most learners in SSA will be interacting with educational content via a mobile device.
Consumer attitudes are also changing. Parents view their children’s education as a means to improve their economic situations. They are prioritizing education expenditure, even in the lowest income brackets, because it is the future. A report by the African Development Bank shows that at 5%, households in Africa spend a greater proportion of their average GDP per capita on education than other developing markets.
Research by Caerus Capital shows 21% of African children and youth are already being educated in the private sector, which is likely to rise to one in four by the end of 2021. Low-cost private schools are integrating ICT as a core component of their models to increase access, quality, and affordability.
Investors are waking up to the opportunities too
With increasing access to mobile internet and a simultaneous rise in demand for urban living, conditions are ripe for SSA EdTech penetration, and there is a major opportunity for private sector participation. Inevitably, different investment opportunities will suit varying risk appetites, return expectations, investment capabilities, and social impact objectives – but as other global regions have dominated receipts of EdTech spending to date, there is fertile ground in SSA for smart investors.
It is likely EdTech and FinTech will also need to work together. Financial inclusion is critical for the success of EdTech. Banking the unbanked and increased digital payments are already increasingly high priorities across SSA. Schoolable, a Nigeria-based fintech company, focuses specifically on providing access to affordable finance in Africa’s private school system in Africa. 30% of African families send their children to expensive, private K-12 schools because public school systems suffer from infrastructural challenges which diminish the quality of, and limit access to, education. Schoolable equips these private institutions with the necessary tools to run a cost-efficient business.
Governments are also upping their game
The Kenyan Ministry of Education has implemented a multi-platform home schooling model using television, radio, online resources, and live video-schooling, in partnership with the Kenya Institute of Curriculum Development (KICD).
Rwanda’s Ministry of Education and the Rwanda Education Board (REB) have partnered with telecommunication platforms and UNICEF to give free access to online educational materials. In Ghana, universities have partnered with Vodafone and MTN Ghana, so lecturers are not charged to use Zoom video conferencing software to record and upload lectures. The University of Ghana has agreed a deal with Vodafone to distribute SIM cards with 5 GB of data to its students, to access online educational content.
Finally, future-proofing employers and employees know they need to upskill. Microsoft’s report ‘Continuous learning is the key to success’ notes over 230 million jobs in sub-Saharan Africa will require digital skills by 2030, resulting in almost 650 million training opportunities, including retraining. Big Tech is already in on this. Microsoft launched its first African Development Centre in 2019, and complemented it with the Africa Research Institute in 2020. Both are geared toward technology solving local challenges via development and support of African talent.
SSA’s EdTech future may not be a smooth path, but market conditions are ripe for promising growth for all stakeholders, from students, investors, governments to entire nations whose development and advancement will be expedited as access to, quality and cost of education are improved.