Good evening beloved all, My favourite business: Education. The business of Education in Africa – 7 lucrative opportunities you can exploit in this huge and growing market Make no mistake about it; education and training is big business in Africa! Why? Education is in a crisis situation in Africa as governments across the continent are overwhelmed with the huge and growing demand for quality education. The successes of Omega Schools (Ghana) and Bridge International Academies (Kenya) prove that private businesses can create profitable businesses from providing quality education to Africans. There are several opportunities for both small and big entrepreneurs to provide solutions and services for primary and secondary education, private tutoring, university training, professional certifications, vocational training, corporate-sponsored training, personal development and language training. This article discusses these opportunities in detail and explores the factors driving the huge and very lucrative demand for different types of education and training in Africa. You should really take your time to suck up this article! Why is the demand and market for private education so huge in Africa? Just before we take a dive into the interesting opportunities in education and training in Africa, it is essential that you understand the drivers and factors responsible for this huge demand. Knowing why the demand is so huge will give you more room to apply your creativity to the business ideas shared in this article. These factors creating the huge demand for quality education in Africa are as follows: #1 - African governments can no longer meet the growing demand for quality education According to the United Nations, Africa would require up to $8 billion (every year) to achieve its Millennium Development Goal for Universal Primary Education by 2015. Good education is one of the basic human rights that governments around the world owe to their citizens. However, due to the rapid rise in Africa’s population and the overwhelming demand for good quality education, African governments are finding it very difficult to provide this basic service. Across the continent, government-sponsored schools and training institutions face the same difficulties - poor funding, low quality, rapidly falling standards and general system failure. Due to the poor reputation of public schools, more parents (including the poor) are enrolling their children in paid private schools even in countries where government schools offer free education. Africa has one of the fastest growing populations in the world with an annual population growth rate of nearly 3 per cent over the last 20 years. More than 60 percent of the continent’s population is below 25 years old and the continent’s birth rates remain one of the highest in the world. By 2050, Africa’s current population of one billion would have more than doubled to 2.3 billion. This trend clearly shows an explosive demand (now and in the future) for education. And with the current situation of many government educational institutions, it will be impossible to provide basic (and higher) education to Africans without the support of private businesses and organisations. #2 - More Africans are betting on good education as the quickest exit from poverty Many Africans (young and not-so-young) now strongly appreciate and understand the value of education and its power to lift them out of poverty. The poor and rich are investing huge amounts of money in their personal and children’s education. In sub-Saharan Africa, school fees consume more than a quarter of a poor familys income, covering not only tuition, but also indirect fees( such as membership of parent-teacher associations, community contributions, textbooks and uniforms). (source: UN). Millions of poor African families are betting to climb out of poverty using education as a ladder. In pursuit of the promises of a brighter future for themselves and their kids, more Africans are making enormous sacrifices to get the best education. However, due to the poor reputation of public schools, more parents are enrolling their children in paid private schools even where government schools offer free education. (photo credit: Bridge International Academies, Kenya) Low-cost private schools, like the Omega chain of Schools in Ghana and Bridge International Academies in Kenya, are spreading across the continent in response to the huge and fast growing demand for quality education. According to an article in the Financial Times, parents are taking desperate measures (and often lose their lives) to enroll their children into private schools in South Africa. In several other countries like Nigeria, Ghana and Kenya, thousands of licensed and unlicensed private businesses are exploiting a heavily undersupplied market for quality education and learning. #3 - More Africans want to be better qualified to get good job opportunities Apart from basic primary and secondary education, many Africans are investing in higher education to improve their chances of getting good paying jobs. Due to high unemployment rates, the competition for good job opportunities is getting tougher every year. To stand a better chance of getting these jobs, more Africans are seeking for university, professional and vocational education and training. Due to poor quality education, there is a huge (and growing) gap between the skills and knowledge of Africa’s labour force and what is required by job employers. To bridge this gap, millions of high school and university graduates are enrolling in private learning organisations to acquire additional knowledge and skills that will make them relevant to a target job opportunity. Apart from the unemployed, Africans who already have jobs are also enrolling and investing in private training courses in order to advance their careers. These training courses range from professional qualifications (accounting, law, IT, engineering etc) to language programs and vocational training. We shall look at these areas in detail in the next section. #4 - Businesses are desperate to train personnel for higher productivity To improve productivity and efficiency in the workplace, businesses are making significant investments in staff training. When staff are more productive, companies are more likely to produce more (and better) goods and services. This often means better financial performance and less waste. This demand for high quality staff training is coming from both private and government organisations. While many large organisations have developed internal training programs to cater for their staff, a huge number of businesses are relying on private training providers to support their staff. Staff training often ranges from technical, managerial to non-technical courses (including soft skills like communication, presentation. leadership and teamwork). Six different opportunities in Africa’s education and training market… The most interesting thing about Africa’s education and training market is that there are opportunities for both small and big entrepreneurs to service this market - no matter the size of capital. As already mentioned above, the number of private schools and training institutions is growing fast, but many more are needed to satisfy the existing (and future) demand for these services. We shall now take a look at the different opportunities that entrepreneurs like you can exploit. 1. Primary and Secondary Education Omega Schools is a private primary school chain targeted at the poor in Ghana. The school runs a low-cost primary education model where parents can pay their children’s school fees on a daily basis (‘pay as you learn’). With a daily school fee of $0.75 and more than 15,000 pupils spread across several of its schools in Ghana, Omega is making money from educating a large number of poor children at a very low price. Ken Donkoh, the founder of Omega Schools, reveals his successful approach in the short video clip below. Primary and secondary education makes up a huge proportion of the overall demand for education in Africa because parents are desperate to give their children a good foundation in the early years. This is very important to catch them young and get them interested in education while their learning ability is high. Most of the existing primary and secondary schools are either ‘poor quality’ or too expensive for the majority of Africans who are demanding quality education. The Omega school model is a very practical and lucrative model that can be adopted across Africa. This is the same business model used by Bridge International Academies in Kenya which charges a $5 school fee per month. In addition to formal primary and secondary school education, there is a huge and growing demand for private tutors to supplement the training children get in school. More parents are paying extra fees to private tutors who provide addition training after normal school hours. These extra lessons may take place at the children’s home or at a dedicated location where children in the area come to receive classes after school. And parents are seeing remarkable results from these lessons. On average, primary and secondary school students who receive extra classes (private tutorship) perform better at school and general examinations than students who only attend school. 2. University Education If the condition of primary and secondary education in Africa is bad, university education is much worse. Apart from being poorly-run, the number of universities in Africa cannot cope with the huge (and growing) number of university-ready students every year. In Nigeria alone, only a quarter of the 1.7 million candidates who wrote university entrance exams in 2013 will gain admission (source: DailyTimes). The remainder (if they’re rich enough) will try to enroll in one of the few and very expensive private universities in the country. The Nigerian story is quite similar across many African countries. Although setting up a private university is much more capital intensive, the huge demand for university education in Africa justifies any business investment in the sector. African students spend upwards of US$3 billion every year to pursue graduate and post-graduate university education outside the continent (especially in Europe and USA). The increasing likelihood of employers to choose foreign-trained graduates over local ones is putting more pressure on the demand for high-quality and international standard university education in Africa. More parents and students are likely to prefer this option as it will be much cheaper and closer to home. Some smart entrepreneurs are already partnering with foreign-based universities to set up satellite campuses in Africa. Some others are using distance-learning (and online) courses to break into Africa’s lucrative university education market. 3. Vocational training Aside from formal school education, there is a severe shortage of vocational skills in Africa. Due to the absence of good vocational training, there are not enough carpenters, painters, plumbers, auto-mechanics, nurses, boat builders, tailors, machine operators, TV repairmen and craftsmen (like shoemakers, furniture makers etc.). To support its fast economic growth, Africa will need a skillful and productive labour force (employed and self-employed) to produce the goods and services that will drive rapid economic growth and development over the next decade. This shortage of skills has led to a huge influx of foreign workers from Europe, Asia and the Middle East into Africa. These foreign artisans and technicians (who are usually more skillful and experienced) are often paid higher than African workers. There is now a huge demand from a large pool of unemployed Africans who have no university education but want to develop basic vocational skills that will help them become self-employed or earn higher pay at jobs. Vocational training often involves a lot of practical work, and as a result, may require a significant investment in a workshop equipped with tools, equipment, materials and machines. 4. Professional training & Certifications The demand for professional training and certification in Africa is growing. More jobs now require candidates to have internationally-accredited certification. Employees are also taking these certifications to advance in their careers. The professions with the highest demand are Business & Entrepreneurship, Information Technology (IT), Engineering, Finance & Accounting, Law and Management training (including project management, supply chain management and several others). Many of these professions are strictly regulated by national and international private or government-backed organisations. These bodies often require that candidates be trained according to a specific curriculum before writing the certification examinations. These regulatory bodies often give approval to private companies to train candidates interested in getting these professional certifications. Depending on the profession, the fees charged for these training courses can be quite high. In addition to providing private training to candidates interested in professional certification, private companies can also act as test/examination centres for international bodies. For a portion of the fee paid to sit for the exam, private companies get to supervise candidates and ensure that the tests/exams are properly taken. 5. Personal development training More individuals, governments and businesses are investing in non-technical and ‘soft’ skills training. The most common courses covered in this type of training include Entrepreneurship, Leadership, Team Building, Communication, Presentation, Negotiation, Stress management, Time management, and motivation. Some smart entrepreneurs now organize conferences, workshops and retreats for individuals, private and public organisations who want themselves (or staff) trained. A lot of these events can attract very high prices depending on the size, profile of invited speakers and the type of participants expected (corporate or individual). 6. Corporate-sponsored training Every serious organization (private or public) invests a lot of money in training its personnel. Apart from the huge positive effect training has on staff motivation and morale, it increases their ability to be more productive and take on more complex and difficult tasks in the work place. Because most organisations understand this, staff training often takes a significant portion of the annual budget in many private and public establishments. In addition to the normal training of staff, newly recruited employees also take up a significant portion of the training budget. Most times, businesses and government offices do not have the ability or capacity to train their staff internally. As a result, private training companies are often invited to train company personnel or government officers within the office location or at a designated training centre. Because this training goes on all year round, it makes for an interesting and lucrative business opportunity for private companies and entrepreneurs who are willing to target this niche. 7. Language training Africa’s fast growing economy is attracting a lot of foreign companies, investors, entrepreneurs, job seekers and tourists looking for business and leisure on the continent. Language can often be a major barrier to doing business between African countries and foreigners. Despite its language barriers, a lot of African companies are spreading across the continent thereby creating a need for both the employed and unemployed to be multilingual if they want to have a better advantage at jobs. Banks, manufacturing companies and investment firms are becoming more global in their outlook. In the coming years, candidates who can speak more than one international language will likely be favoured over other equally qualified but unilingual candidates. Official international languages spoken in many African countries such as English, French, Portuguese and Spanish are in greater demand. Mandarin (Chinese) is also becoming an essential language skill given China’s huge and growing trade ties with sub-Saharan Africa. Foreign companies are also interested in learning native African languages to allow them better penetrate the market. Success tips and things you should consider in starting your own education and training business in Africa… Just like every other endeavor, starting a business in the education and training sector requires quite a bit of planning and some serious consideration. This list is by no means exhaustive but draws your attention to a couple of things you should keep in mind to succeed in this business. Laws, rules and regulations – What do they require? In many countries, education and training are strictly controlled by the government. Although many other countries allow private participation in the education sector, you still have to follow strict guidelines for setting up a learning organization. Before you start, it’s important that you find out what the laws/regulations require in your country. These rules and laws vary from country to country. Interested entrepreneurs need to confirm if they require any licenses, permits or registration to operate a school or learning institution. Are there any specific size and space requirements for schools and learning institutions? Is there an approved national school curriculum? Do teachers need to have a certificate or minimum qualification before they can practice? Is it against the law to charge above a certain school fee? Do the authorities require any periodic inspections or reports? If you’re targeting professional or specialized training, are there any associations or societies you must be registered with? It’s important to note that training providers may need to be registered with corporate organisations and government offices before they can train for them. Capital – How much do you really need? Although capital is an important requirement to take a business off the ground, it’s very possible to start a business in education at a scale you are comfortable with and can afford. Providing private tutorship to primary and secondary school students is a good way to enter this market at a small scale. The training could take place at the childrens’ house or at a small rented location. As you learn and expand, you may start to consider other opportunities in this market. Unless you plan to start a university or build a dedicated learning facility, your training projects should be based on the demand of customers. This way, you do not spend any huge amounts on rent, equipment or permanent training staff. However, if you can find investors or banks willing to invest in your training idea, that would be great! Make sure you have a proper business plan in place. Location & Competition – How large is the pond and how many fishes swim in it? While we admit that the opportunities for entrepreneurs to make money in Africa’s education and training market are huge, it’s important that you look out for locations with a high enough population (demand) and little competition. What kind of people (young, retired, families etc) live in your area? Will they be interested in the kind of training you want to offer? Let’s say you intend to start a professional certification and training business. Is there a large population of working class and employment-ready people who will be willing to enroll in your school or training facility? Are there already other businesses offering the same training courses in the area? How strong is the competition? What size and niche of the market are they serving? Is there room for your own business and others who may intend to come in later? Look for a segment of the demand that is not being served and focus on it! Partnership is key in this business! The common challenge in every education and training business is the knowledge and experience of the teachers/trainers. Partnerships and alliances are the easiest ways of getting around this challenge. Many training companies in Africa are partnering with foreign-based training providers (such as universities) who have the expert knowledge and experience to provide quality training. For example, Ken Donkoh of the Omega Primary School chain in Ghana partnered with Professor James Tooley, a pioneer in the low-cost private school field and a professor of education policy at Newcastle University in the United Kingdom. This type of partnership helps to improve your profile in the market and makes present and future customers to highly regard your services. When you identify a niche in the education and training market you’d like to tackle, do a quick research on any local and international institutes, professional bodies or foreign training companies who have experience in providing a similar service. Propose to work with them as a partner or representative in your country or area. Most of these organisations see alliances and partnership as a quick and easy way to increase their influence and revenues in foreign markets with little investment. Explore innovative teaching models and platforms The internet is changing the way traditional education and training is given. E-learning (electronic learning) and online/virtual classrooms are some of the innovative ways of teaching a wider audience no matter your location. The traditional method of sitting in a classroom and having a teacher/trainer talk to students and participants will gradually be replaced by more convenient methods of learning. Entrepreneurs should be aware of these trends and follow them very closely. Udemy and Learnable are some of the interesting online learning platforms that should inspire you. Putting it all together… Education is a social business that offers the opportunity to impact millions of young African lives and make money at the same time! With its population expected to double in the next 40 years, Africa’s education market will continue to provide a huge potential to smart entrepreneurs and private businesses. We believe that all the opportunities identified in this article can be taken further by your creativity and energy. If you believe an education business will work for you, it’s important that you start working on a business plan as soon as possible. You could also choose from many more amazing business ideas in the Browse ideas section of this website. Written by smallstarter ThinkTank
Posted on: Fri, 18 Jul 2014 17:01:33 +0000
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