The Indicator

Unlocking Human Potential via Investment in East African Education

In this column called “The Indicator”, we will be taking an economic or financial statistic from East Africa and breaking it down into bite-sized nuggets of knowledge for investors.

This month’s indicator figure is 4.6

4.6 of what?

Parents around the world are consistent in their desire for better lives for their children and for most parents that means giving their children a good education.

In this month’s Indicator we will cover the number 4.6, the average number of years of formal schooling for adults in the East African Community countries.

What do you mean by average years of schooling? 

 As per UNESCO’s definition, the Mean Years of Schooling metric provides the average number of years of education completed by a country’s adult population aged 25 years and older (excluding years spent repeating grades). In terms of classifications of educational levels attained, primary education is from 0 to 7 years of schooling, secondary is 7 years to 12 years, and tertiary is 12 years and up. The measured average of 4.6 years of schooling in East Africa means that most East Africans are unable to complete their primary education.

We are limited by the data available and have used the most recently available figures. In some cases these numbers are estimates or extrapolations based upon available data.

Which EAC country has the most and which the fewest years of schooling?

Kenya, the largest economy in the region, also has the most years of education attained averaging at 6.3 years, followed by Uganda at 5.4 years.

Tanzania is not far behind Uganda with 5.1 years of schooling attained.   Rwanda has 3.3 and Burundi has 2.7 years of schooling per adult.

How does the EAC compare to other regions of the world in average years of schooling?

It should not be a surprise to most readers who live in the region that EAC countries are near the bottom of the table globally when it comes to educational attainment.

The world leader in average years of schooling is a tie between the US and Germany with 12.9 average years of schooling.

These two book-smart countries are followed not surprisingly by other countries high on the Human Development Index table including Australia at 12.8 years, Norway at 12.6 years, and New Zealand and Israel both with 12.5 average years of schooling for their respective populations.

In Asia, the studious South Korea is the leader with 11.8 years followed by Japan at 11.5 years of schooling per adult.

On the African continent, South Africa is the leader with 9.9 years of schooling and in the Sub-Saharan region Gabon is the next highest at 7.4 years of schooling.

Adults in other leading regions are able to attain more than 8.0 years over their European, North American, or Australasian counterparts and nearly double the EAC’s neighbors to the south.

Is this number increasing or decreasing in the EAC?

Despite the low base, the numbers are improving with over 145% growth in number of years of schooling since 1980 though slowing down in recent years with only 8% growth in the past decade.

How does this affect the economies of East Africa?

More education brings higher rates of literacy and other formal skills to the workforce. The more educated the workforce is, the higher the ability of workers to do a variety of jobs. In this case, we would expect to see an expansion of workers and innovation in the industrial, services, and technology sectors. Usually, jobs in these sectors bring in higher wages and overall prosperity to communities. Reduced educational levels compared with the rest of the world are limiting economic growth in EAC countries.

The esteemed scholar Confucius is credited as saying, “If your plan is for one year plant rice. If your plan is for ten years plant trees. If your plan is for one hundred years educate children.”

What is being done to increase the education levels in EAC countries?

Educational levels in EAC countries are low due to a number of factors.

One reason is that after water, food, and other essentials to sustain basic life for a family, gathering money for education for children is unfortunately out of reach for many EAC citizens. School fees are high relative to other costs because of the high costs required to effectively educate children.

Each government has made strides to increase access to education in their respective countries.

Tanzania has recently announced free education for all primary schools; however, ancillary fees for uniforms, books, and school supplies can add up to a prohibitive amount of funds required for everyday citizens.

The EAC itself is in the final phase of an Educational Harmonization plan, which will have every country’s educational policies and procedures aligning. This phase is projected to end in the next two years.  Harmonization of policies and procedures offers abilities to find efficiencies and gain economies of scale in regional efforts and investments.

Development partners and NGOs are very active in the sector and region though quite varied in their approaches, missions, and efforts.

For example, UNESCO has been supporting the expansion of the scope of education by pushing for literacy tests, pastoralist education, vocational programs, and educational programs for out-of-school mothers and the introduction of innovative education policies throughout various locales in EAC countries.

What are the opportunities created to solve these challenges?

Where there are challenges or deficits oftentimes there are business and investment opportunities. The following is a brief summary of a few market opportunities and investment ideas that could fill the gap where educational services have been lacking for students of all ages:

  • Private low-cost schools – Bridge International Academies describes itself as “the world’s largest education innovation company serving the 700 million families who live on less than US $2 per day”. The for-profit social enterprise company serves one hundred thousand students including in Kenya and Uganda with technology enabled solutions, mobile phones, tablets, and Learning Labs.

Another example of a social enterprise focused on youth education is Kidogo, which focuses on low cost early childhood (years 0-5) child care and education through hubs in Kenya’s urban centers.

  • Educational entertainment and enrichment: Ubongo is an edutainment company that creates interactive applications for tablets, phones, and other screens focused on primary and kindergarten level students to make learning more accessible and enjoyable for kids.

Another example of using phone and tablet-based education outside of the classroom is Eneza Education which started in Kenya and is expanding to Tanzania.  Costs for national curriculum content delivered by SMS is currently priced at less than US $0.10 per week.

  • Educational competitions: The EAC Students Essay Writing Competition is an annual competition where students can compete and demonstrate their writing skills. The competition is intended to help students from EAC countries to get to know each other and the EAC as an institution better, and to help rising stars shine.
  • Corporate sponsored training: In addition to on-the-job training for employees global corporations are seeking to enhance skills through targeted training sessions. One such event is Africa Code Week, a corporate sponsored week-long program throughout schools across the continent to encourage learning in information and communication technologies by both students and teachers.
  • Vocational, apprenticeship and intern programs: Significant opportunities to develop and transform unskilled workers into productive technicians is likely to emerge in the upcoming years.  One such program is the US $62 million African Development Bank loan to Kenya’s Support to Technical and Vocational Education and Training. This program targets future technicians, artisans and workers in various industries.

This is but a small list of several potential and emerging types of investments into the EAC education industry to respond to the demand for knowledge and development among students.

We can hope that the investment and venture communities will work to solve this increasing problem for the benefit of the rapidly growing youth population of the EAC.

How can I learn more?

To learn more about the topics in this article you can visit:

United Nations Development Programme Human Development Reports on Mean years of schooling (of adults) (years) – http://hdr.undp.org/en/content/mean-years-schooling-adults-years 

UNESCO Institute for Statistics Mean Years of Schooling – http://www.uis.unesco.org/Education/Pages/mean-years-of-schooling.aspx

Bridge International Academies – http://www.bridgeinternationalacademies.com/

Kidogo – http://www.kidogo.co/

Ubongo – http://ubongo.co/index.php/about/

Eneza Education:  http://enezaeducation.com

EAC Students Essay Writing Competition – http://www.education.eac.int/index.php?option=com_content&view=article&id=51&Itemid=107

Africa Code Week – http://africacodeweek.org

About the authors:

David L. Ross is Managing Director of Statera Capital and US Ambassador to the Open University of Tanzania active in growing companies in Eastern and Southern Africa through primary investment, investment advisory, strategic partnerships, and executive education. Connect on LinkedIn at http://tz.linkedin.com/in/davidlross1 or at david@stateracapital.com.

Catherine Mandler is a Senior Analyst at Statera Capital. Connect on LinkedIn at http://www.linkedin.com/in/CatherineMandler or at catherine@stateracapital.com.

 

 

 

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