Rising incomes among Africa’s vast population have created a pool of customers willing to pay for better schooling for their children. That in turn is driving an explosion in education businesses that means Africa could soon rival Asian countries like India as the next big hit with school investors.
Private schools are springing up everywhere from Lagos to Kenya offering annual fees from $2,000 to as much as $16,000 and pulling in big profits.
Britain’s Pearson, the publishing firm behind the Financial Times, is backing companies involved in rolling out affordable academies. In January the company tripled its investment to $50-million in a fund that backs emerging-market ventures that provide education to budget schools.
“By any metric – demographic growth, economic growth – or by demand for better educational outcomes, the circumstances are ripe for African education to significantly improve in the next two decades,” said Katelyn Donnelly, the head of Pearson’s Affordable Learning Fund, set up with $15 million in 2012.
Other investors include Dubai-based GEMS Education, Bridge International Academies and South Africa’s AdvTech Ltd, which last week said it had attracted a takeover bid that sent it shares skyrocketing.
South African investment company PSG Group is the major shareholder in Curro Holdings, a low-cost private-schools operator in South Africa that is growing at a breakneck pace, both operationally and in the stock market.
Source: Globe & Mail