Data shortage stalling $3.2bn private education investment opportunity

Lack of reliable data on learning outcomes, critical mass, scalability and long-term planning are preventing private sector investors from harnessing opportunities in Lagos state education market, says Developing Effective Private Education Nigeria (DEEPEN), a programme funded by UKAID.

According to the results of a recent survey conducted by DEEPEN, private education market in Lagos is valued at $3.2 billion but commercial investors a keeping away from it because there is lack of clarity.

“Investors in general and financial institutions in particular shy away from investing in education because they have a hard time measuring return on investment. Bankers do not understand what schools are doing and schools seem not to understand the language of investors” said Bunmi Lawson, Managing Director/CEO Accion Microfinance Bank Ltd on Thursday at the launch of Business of Education in Africa Report, sponsored by Caerus Capital and United Kingdom Department for International Development (DFID).

Recent trends around the world show that private sector driven education is the new normal and the way forward. This brings market principles to bear on how curriculum is designed and what skill sets are embedded in the education system.

The World Bank is launching a fund of over $600 million for results based learning outcomes next year, proof of recent bent towards measurable educational outcomes, which government funded schools might not be in a position to deliver.

“There are about 40 percent of children in private schools today in Nigeria because parents are voting with their feet. There are over 18, 000 private schools and about 2, 000 public schools in Lagos, a sign that the private sector has become dominant in the education space. Efforts should be geared towards leveraging private sector competencies in delivering low-cost, market relevant education” said Pauline Seenan, the Team Leader of Human Development Team at DFID Nigeria. “This is the most reliable way to grow the human capital needed to grow Nigeria’s economy.”