Investing in Africa’s education sector

The education sector in East Africa is currently experiencing a surge of interest from investors looking to capitalize on the vast opportunities in the private education space. With a rapidly growing population and an emerging middle class, there is a rising demand for skills-based learning that is propelling the market towards high-end private education. CNBC Africa recently spoke with Horace Mpanza, Regional Managing Director of ADvTECH Kenya, to delve deeper into the current trends and potential opportunities shaping the education landscape in Africa. According to Mpanza, the continent faces unique challenges and opportunities, given its youthful population and economic challenges that can be addressed through the development of skills, with education playing a crucial role. By 2100, half of the global population is projected to be born in Africa, emphasizing the need for quality education to meet the growing demands. State education systems may struggle to keep up with these demands, making room for the private sector to play a significant role in educating the burgeoning population. A key statistic highlighted by Mpanza is that five of the ten most populous countries in the world will be located in Africa, underscoring the importance of investing in the education sector to harness the potential of the youthful demographic. Private education has witnessed remarkable growth rates, driven by the expanding middle class that can afford private schooling for their children. As a result, more private education providers are entering the market to cater to this demand, creating a competitive yet consumer-beneficial environment where quality and value are paramount to survival. The landscape of education acquisitions varies across different African markets, with Kenya seeing substantial activity from major players entering the market to provide quality education. In contrast, South Africa has experienced more new school developments rather than acquisitions in recent years. Mpanza anticipates a promising future for premium education in Africa, fueled by urbanization, a growing and young population, and parental aspirations for their children's education. ADvTECH's recent acquisition of Flippa International School in Ethiopia marks a strategic move to establish a foothold in the Ethiopian market, capitalizing on the high demand for quality education in the country with over 120 million people. This acquisition complements ADvTECH's existing presence in Kenya, with brands like McKinney and Crawford Schools, solidifying its position as a leader in private education on the continent. With plans to accelerate growth and make a meaningful impact through education, ADvTECH aims to further elevate the private education sector in Africa.