Private Primary and Secondary School Centers
Private Primary and Secondary School Centers
Business Model Description
Establish or acquire independent private school chains in the primary and secondary education phases. This model could also cater for a portion of early childhood development centers.
Expected Impact
Enhance access to quality education at the primary and secondary level through private school centers.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Namibia: Khomas Region
- Namibia: Erongo Region
- Namibia: Omusati Region
- Namibia: Ohangwena Region
Sector Classification
Education
Development need
Namibia struggles with a high youth unemployment rate of 39%, which is particularly critical given that 37% of Namibia's population is aged 16-35. This has largely been ascribed to the fact that the youth is under-skilled and lacks technical skills, which is seen as a precondition for becoming an industrialized nation (II).
Policy priority
The Government identified education as one of five "game changers", given the sector's potential to act as a catalyst for sustainable economic growth (II). Under the Harambee Prosperity Plan, the Government highlights vocational education and training as critical contributors to Namibia's social progression (III).
Gender inequalities and marginalization issues
Despite progress on the primary level, the overall quality of education is a major concern in Namibia. At secondary schooling level, repetition and drop-out rates in remote and rural areas are particularly high; it is estimated that only around 19% of matriculants are able to transition from secondary to tertiary education (IV).
Investment opportunities introduction
While both technical and vocational training provide youth, especially women, with increased chances to obtain employment (VII), returns on investment at secondary education level tend to be higher than those of the vocational track given the unit cost of vocational training (VII, VIII).
Formal Education
Development need
Limited quality curricula, besides the lack of infrastructure and international expertise, is the biggest obstacle for Namibia's tertiary education system. Improving the quality of the country's tertiary education system, and increasing access, is expected to result in diversification of economic sectors and accelerating Namibia's industrialisation (V).
Policy priority
To support Namibia's Vision 2030, the Government developed the Technical and Vocational Education and Training (TVET) Transformation and Expansion Strategy, which details the costing of developing the industry through expanding physical infrastructure and capacity building, which is estimated at NAD 6.9 billion (USD 500 million) (VI).
Gender inequalities and marginalization issues
Education, among others, generates significant multipliers on output, GDP and income. An increase in final demand for among others education generates the highest impact on low-income households, and leads to the largest income multipliers for unskilled labourers (IX).
Pipeline Opportunity
Private Primary and Secondary School Centers
Establish or acquire independent private school chains in the primary and secondary education phases. This model could also cater for a portion of early childhood development centers.
Business Case
Market Size and Environment
Nearly a third of Namibia's population requires mandatory basic education.
Namibia's population is expected to increase to 3,113,643 by 2030 (9).
As at 2018, 36.5% (880,979) of the population is under the age of 15 and 22.6% (545,483) of Namibia's population is between the age of 5 and 14, which is the primary school going age. This means that almost a third of the national population requires mandatory basic education in line with the constitution of the Republic of Namibia (10).
Indicative Return
20% - 25%
A benchmark project, the Gateway English School in Windhoek, achieved an IRR of 25.25% (6).
IRRs are expected to vary dependent on the socio-economic status of communities served and the degree of labour intensiveness, generally expected to range between 20-25%.
Investment Timeframe
Long Term (10+ years)
New institutions require sufficient lead times to establish facilities and attract sufficient students to sustain operations. Investments require a long-term perspective and may need to feature a 2-4 year payment holiday or an interest-only payment period to reach an effective size (4).
Market Risks & Scale Obstacles
Market - Limited market size
Impact Case
Sustainable Development Need
5% of Namibia's youth have no formal education and 19% have attained at most incomplete primary education, meaning that a quarter of 15-24 year-olds have not completed primary education. Only a small proportion of students who enrol in primary school proceed to and complete secondary school (1).
7% of primary school aged children are out of school in Namibia. The country's net attendance ratio is only 50% at the secondary level, resulting in the fact that, inter alia, 13% of Namibians remain illiterate (1).
High levels of grade repetition and drop-out rates characterise the secondary schooling level. It is estimated that only 19% of matriculants are able to transition from secondary to tertiary education (2).
Gender & Marginalisation
7% of boys of primary school age are out of school compared to 6% of girls of the same age. Nearly 29% of the female youth of secondary school age are out of school compared to 32% of the male youth of the same age (1).
Repetition and dropouts at the secondary school level are significantly higher in remote and rural areas of Namibia than in the country's cities and towns (2).
Expected Development Outcome
Enhanced quality of education delivery at the primary and secondary level, allowing for better performances and lower levels of repetition across all grades.
Increased quality and number of matriculants, which leads to higher eligibility for tertiary studies and greater employability of young Namibians.
Gender & Marginalisation
Primary SDGs addressed
4.1.1 Proportion of children and young people (a) in grades 2/3; (b) at the end of primary; and (c) at the end of lower secondary achieving at least a minimum proficiency level in (i) reading and (ii) mathematics, by sex
4.1.2 Completion rate (primary education, lower secondary education, upper secondary education)
4.3.1 Participation rate of youth and adults in formal and non-formal education and training in the previous 12 months, by sex
4.6.1 Proportion of population in a given age group achieving at least a fixed level of proficiency in functional (a) literacy and (b) numeracy skills, by sex
4.c.1 Proportion of teachers with the minimum required qualifications, by education level
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Public sector
Indirectly impacted stakeholders
People
Outcome Risks
Resources invested in private schools may limit required improvements in public schools, offering an alternative for those who can afford it but leaving disadvantaged groups with no option.
Impact Risks
Centers with fee levels that are unaffordable to most Namibians may limit the impact and offer opportunities for high quality education mostly to more advantaged groups.
Impact Classification
What
The outcome is likely to be positive, important and intended because the school centers provide a quality alternative to publicly funded education.
Risk
While the model of private school centers is proven, it requires careful considerations to balance commercial potential, quality and affordability for target groups.
Impact Thesis
Enhance access to quality education at the primary and secondary level through private school centers.
Enabling Environment
Policy Environment
Inclusive Education Policy, 2013: Contributes to pedagogical and educational development, and correlates with the directions of the National Curriculum for Basic Education, the Curriculum Framework for Inclusive Education and the Education Sector Policy for Orphans and Vulnerable Children (11).
Ministry of Education, Arts and Culture, Strategic Plan, 2016: Provides direction to all stakeholders in education. It also provides a basis for the implementation of the Performance Management System (12).
Financial Environment
Financial incentives: The Government provides subsidies to private schools based on a funding formula (5).
Regulatory Environment
Education Act, 2001: Makes provision for accessible, equitable, qualitative and democratic national education service and to provide for the establishment of schools and hostels (7).
Basic Education Act, 2020: Aims to provide for the establishment, accreditation, registration, governance and management of state and private schools and hostels (8).
Marketplace Participants
Private Sector
Investors such as EOS Capital running the Namibia Infrastructure Development and Investment Fund and Musa Capital. Businesses such as Amazing Kids, Gateway English School, Curro and ADvTECH in Namibia, and PLG Schools, Spark Schools and Sifiso Learning in South Africa.
Government
Ministry of Education, Arts and Culture.
Non-Profit
Namibia Qualifications Authority, Namibia's Private Schools Association, Independent Schools Association of Southern Africa (ISASA).
Target Locations
Namibia: Khomas Region
Namibia: Erongo Region
Namibia: Omusati Region
Namibia: Ohangwena Region
References
- (I) SDG Center for Africa and Sustainable Development Solutions Network, 2019, Africa SDG Index and Dashboards Report 2019, Kigali and New York: SDG Center for Africa and Sustainable Development Solutions Network, https://sdgcafrica.org/wp-content/uploads/2019/06/SDGS_INDEX_REPORT_2019WEB.pdf. II) Republic of Namibia. National Planning Commission, 2017, Namibia's 5th National Development Plan (NDP5), https://www.npc.gov.na/?wpfb_dl=294. III) Republic of Namibia, Office of the President, 2016, Harambee Prosperity Plan 2016/17 - 2019/20 Progress Report, Goals and Outcomes, https://op.gov.na/documents/84084/572904/HPP+Report+2019/66c2eef8-3b23-45be-bc2c-5e728699057e. IV) Republic of Namibia, National Planning Commission, 2018, Implementation of Sustainable Development Goals. Voluntary National Review, https://sustainabledevelopment.un.org/content/documents/19880New_Version_Full_Voluntary_National_Review_2018_single_1_Report.pdf. V) Jellenz, M.; Bobek, V. and Horvat, T, 2020, Impact of Education on Sustainable Economic Development in Emerging Markets—The Case of Namibia’s Tertiary Education System and its Economy, Sustainability 12, 8814; doi:10.3390/su12218814. VI) The Research Department of the Bank of Namibia, 19th Annual Symposium: Creating Employment through Technical Vocational Education and Training in Namibia, 2018, https://www.bon.com.na/CMSTemplates/Bon/Files/bon.com.na/e9/e9a69b18-c864-48fc-825f-7d9eb982b781.pdf. VII) World Bank, 2017, Skills Development, https://www.worldbank.org/en/topic/skillsdevelopment. VIII) Psacharopoulos, G. & Patrinos, H. A, World Bank, Policy Research Working Paper, Returns to Investment in Education: A Decennial Review of the Global Literature, 2018, http://documents1.worldbank.org/curated/en/442521523465644318/pdf/WPS8402.pdf. IX) DNA Economics, 2021, SAM Multiplier Analysis for the SDG study in Namibia, Six Capitals.
- (1) Republic of Namibia, National Planning Commission, 2018, Demographic Dividend Study Report.
- (2) Republic of Namibia, National Planning Commission, 2018, Implementation of Sustainable Development Goals. Voluntary National Review, https://sustainabledevelopment.un.org/content/documents/19880New_Version_Full_Voluntary_National_Review_2018_single_1_Report.pdf.
- (3) Moritz Jellenz; Vito Bobek and Tatjana Horvat, 2020, Impact of Education on Sustainable Economic Development in Emerging Markets—The Case of Namibia’s Tertiary Education System and its Economy, Sustainability (12):8814; doi:10.3390/su12218814.
- (4) J. Hofmeyr & S. Schirmer, 2015, Investing in Potential: The financial viability of low fee private schools in South Africa.
- (5) UNICEF, 2017, 2017/2018 Budget, Children and the Namibian Budget: Basic Education, https://www.unicef.org/esa/media/991/file/UNICEF-Namibia-2017-Education-Budget-Brief.pdf.
- (6) Feasibility Study for Gateway English School, 2011, conducted by Dr. Loneson Mondo (MBA, DBA), Available on request from Loneson Mondo (lonesonmondo@gmail.com).
- (7) Education Act, 2001, Republic of Namibia, https://laws.parliament.na/annotated-laws-regulations/law-regulation.php?id=411.
- (8) Basic Education Act, 2020, Republic of Namibia, https://laws.parliament.na/annotated-laws-regulations/law-regulation.php?id=526.
- (9) National Planning Commission of Namibia (NPC), 2015, Policy Brief: Population Dynamics, https://www.npc.gov.na/?wpfb_dl=238.
- (10) Namibia Statistics Agency, 2019, The Namibia Labour Force Survey 2018, https://d3rp5jatom3eyn.cloudfront.net/cms/assets/documents/NLFS_2018_Report_Final_.pdf.
- (11) Ministry of Education, Arts and Culture, Sector Policy on Inclusive Education, 2013, https://www.moe.gov.na/files/downloads/MoE%20Sector%20Policy%20on%20Inclusive%20Education.pdf.
- (12) Ministry of Education, Arts and Culture, 2016, Strategic Plan 2017/18 - 2021/2, https://www.moe.gov.na/files/downloads/b7b_Ministry%20Strategic%20Plan%202017-2022.pdf.