Wednesday28 August 2019 ★ FINANCIAL TIMES 5

African Development

I

n classrooms across Nigeria’s Edo

state, teachers areequipped with

information systems designed to

better instruct and track the

progress ofpupils in an effort to

encouragechildren to stay in school.

The programme — dubbed EdoBest —

provides services fromBridge Interna-

tional Academies, a US company that

began operating private, low-cost

schools in Africa with backing from

donors and social impact investors but

which is increasingly focused on provid-

ing support to state-run systems.

“By investing in social enterprises and

other non-state actors, investors can

improvegovernment schools and help

to create more high-quality learning

opportunities, ultimately helping to

transform the development path of low

and middle-income countries,” says Jay

Kimmelman, Bridge chief executive.

His organisation’s approach, which

haselicited both praise for impact and

criticism over quality and price, high-

lights the considerable scope but also

the potential pitfalls of impact investing

in Africa, notably in the highly sensitive

and politicised field of education.

Amit Bouri, head of theGlobal Impact

Investing Network, an association for

impact investors, saysa survey of its

members suggested thatsub-Saharan

Africa has become one of the top regions

targeted by funds, accounting for 14 per

cent of their assets under management.

Education — like healthcare — is

becoming a sector ofinterest, although

it only accounts for 4 per cent of assets

invested in the region. “It’s still early

days,” Mr Bouri says. “Capital deployed

has not caught up with the level of inter-

est, partly because finding a role can be

complicated because of thestate.”

On paper, there is enormous potential

for investors, including those with a

focus on social impact. The continent’s

young population is expanding, and the

need for additional funding is clear.

There is a chronic undersupply of teach-

ers, and wide variations in the quality of

education provided.

There isinterest from groups includ-

ing Novastar Ventures, backed by the

UK’s Department for International

Development (Dfid) through its Impact

Fund which is managed via CDC; and

Investisseurs & Partenaires, a Paris-

based Africa-focusedvehicle that is pre-

paring an education fund in partnership

with the government of Monaco.

Its recentstudy in francophone Africa

highlighted the scope for greater techni-

cal and vocational training; the poten-

tial to support theprivate sector for

schooling; and opportunitiesin ancil-

lary services, such asteacher training,

student loans and equipment supplies.

But, as with the other pillar of

“human capital” — health — there are

tensions for investors. Many aspects of

both medicine and teaching are consid-

ered by civil society to bethe domain of

government, with an imperative for

equity and fair access.

That is why a number of investors and

providers alike havefocused on sup-

porting state provision. Amel Karboul,

head of theEducation Outcomes Fund,

is exploring a three-year programme

co-funded by Dfid and the government

of Ghana, which will link payments to

improving attendance in the country’s

schools. One difficulty for such projects

is how to measure performance effec-

tively, and the distortion that such met-

rics risk creating.

Sam Freedman, head of Ark Educa-

tion Partnerships Group, a non-profit

consultancy that advises a number of

African countries, says: “It’s incredibly

difficult to measure outcomes in educa-

tion. Even in the UK, if you make organi-

sations financially dependent on the

measure, they will start focusing every-

thing on it rather than the education.”

“In countries where accountability

data is relative weak, it’s even harder,”

he adds. “You have to collect data your-

self with nothing to cross reference.”

If measurement is difficult for

funders, anotherchallenge is a lack of

projects in which to invest. “Most

schools in Africa are predominantly

mom and pop operators,” he says. “They

don’t have the risk profile that would

make people want to invest in them, nor

the capacity to grow, nor any sign of

quality or ability to develop quality.”

Oliver Sabot, head ofNova Pioneer,a

network of low-cost schools based in

Kenya, sees afunding gap foreducation

projects. “There’s amissing middle,” he

says. “If you are looking for asmall

amount of seed funding to get an idea

going, there is a fair number of opportu-

nities. If you are a large operator with a

strong track record that is profitable,

there are lots of backers. But the path in-

between is barren. There arefew players

who are able or willing to work with

teams in that middle portion.”

He also points to abarrier to school

operations in many cities in Africa:

property prices, which undermine

efforts to keep costs low. “For any school

or university, it’s one of the biggest

impediments,” he says. “It would unlock

huge growth if some big funders came

together and created a pool of capital for

education property.”

He highlightsa number of new entre-

preneurial school operators, but adds:

“It’s asmall number when you think

about the scale of the continent. Even if

you believe the private sector should

only have asliver of the sector, given the

needs of the next 10 or 20 years, we need

to seed entrepreneurs and managers.”

Impact investors learn value of education

Investment

Youthful population

fuels demand for private

funding for classroom

programmes, writes

Andrew Jack

‘It’s still early days.

Capital deployed has

not caught up with the

level of interest’

Educational: Pupils at Bridge

International Academies in Nigeria

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