Investment opportunities in African tertiary education

By Sudeep Laad, partner, L.E.K. Consulting and Subhash Kunche, manager, L.E.K. Consulting

In Africa’s growing tertiary education landscape, investors have numerous opportunities across a range of themes.

Gross enrolment ratios at the post-secondary level are low and less than 15% of the working population holds a tertiary degree. Problematically, applicant-to-seat ratios are between 2:1 and 4:1 at public tertiary institutions (Figure 1). This showcases significant demand that the private sector, which has less than 20-25% share of tertiary enrolments in many African nations, can meet. Education sub-sectors including technical and vocational education and training (TVET) and edtech can benefit a great deal from private investment.

Figure 1: Opportunities in Africa’s tertiary education sector

As with any diverse, high-potential market, there are challenges for investment in the tertiary education sector. Affordability constraints can hinder growth and employment outcomes are not always predictable. Additionally, investors must deal with regulatory obstacles.

Investment potential: Higher education institutions, edtech, TVET

However, investors can back key investment trends across the higher education institution, edtech, and TVET sectors. In addition, opportunities across the tertiary education sector can be explored in student financing and public-private partnerships (PPPs). Staying informed about these investment themes is central to success (Figure 2).

Figure 2: Key considerations for investors in Africa’s tertiary education sector.

Within the higher education institutions sub-sector, scaled platforms allow expertise to be shared and outcomes to be reproduced across the network. Investors can support scaled platforms in both greenfield expansion and acquisitions. Due to the financing challenges and risks associated with greenfield projects, collaboration with real estate focused private equity firms, real estate developers, and governments could work. Examples of scaled platforms are AdvTech Group, Honoris, Galileo Global Education, Stadio Holdings and UPM (KMR Holdings). These platforms operate sustainable models that investors can back.

Connecting African education to international private education providers can lead to symbiotic resource flows. Co-investment with these providers can take place in three ways. First, campuses can establish foreign branches of their campuses – University of Lancaster in Ghana and Monash South Africa are some examples. Second, they can grow through acquisition, as the Europe-based Galileo Global Group did by purchasing the Senegalese ISM Group network. Third, they can establish greenfield higher education institutions. For example, the UAE’s Thumbay Group plans to open a medical school and teaching hospital in Ghana and a “Medicity” in Egypt with the government.

Covid-19 has emphasised the need for quality distance learning, particularly in regions with reduced technological resources. Public open learning colleges command most enrolment in distance education. Investing directly in private distance learning providers enables enrolment growth. Facilitating public-private partnerships could improve the quality of public offerings and has a ripple effect across civic sectors.

The edtech sub-sector offers models that make online degrees accessible to working demographics. These include university-linked online degrees/short courses (e.g. GetSmarter, Masterstart, Mindsharp), and upskilling courses (e.g. Andela, Mosabi). Traditional institutions can pivot more firmly to digital or offer fully online degrees/diplomas/certificates like UNICAF and Damelin Online without classroom components. They can adopt online program management (OPM), learning management systems (LMS), and enterprise resource planning (ERP) solutions to transition to digital. Investors can make this transition profitable for traditional tertiary education institutions and support the growth of new-age tertiary learning models.

TVET is another vital sub-sector. Kenya’s Moringa School focuses on technological upskilling for career readiness, a model that can be expanded through education to employment strategies. Industries and tertiary education institutions can provide practical internships and courses. Employee-sponsored training leads to success and industry participation in curricula helps students learn real-world skills.

Investment opportunities across segments

For equitable access to opportunities, investors can contribute to student financing options. They can invest in innovative financing solutions, including but not limited to student loans, income-sharing agreements, and microfinancing. This will create a workforce that is not saddled by debt and free to achieve.

Of course, the private sector cannot do this alone and developing productive PPPs will be necessary given many African nations’ historically socialist policies. While PPP is a significant investment opportunity in the TVET sector, it can also be directed towards higher education institution, edtech and student financing. There is a wealth of PPP models in Africa and around the world, such as infrastructure PPPs, service delivery models and voucher programmes, that investors can draw insights from in creating partnership structures.


To sum up, the right information can enable investors to garner social and financial returns by investing in Africa’s tertiary education landscape. If investors spot and back key trends, they will be able to deliver success to students and communities at an international level by offering quality tertiary education.