Kenya’s education sector is experiencing a period of increased investment and attention. With pressing demand created by a growing population, the government is focusing on improving access and quality across the system. The attention on the sector, and the desire to align the system with the needs of the labour market, is likely to lead to significant opportunities for private sector players, especially at the tertiary level.
Kenya’s fundamental indicators are relatively sound. Gross enrolment at the primary and secondary levels stood at 103.6% and 62.9%, respectively, in 2015. Indeed, the number of Kenyans attending primary and secondary schools increased by 400,000 pupils in 2015 alone, which, at the secondary level, represented an annual increase of 9.7%. The number of primary schools increased by 6.4% in 2015, while for secondary schools, that number stood at 7.9%.
Kenya has also increased the total number of teachers by 5.1%. In terms of student performance, over 80% of Kenyan children reach the expected reading level after four years of schooling. This is well above the sub-Saharan African average of roughly 62%. “Kenya is one of the continent’s leaders in terms of quality of education at the primary and secondary level,” Colin McCormack, CEO East Africa of GEMS Cambridge International School, told OBG.
Investing In The Future
These improvements come on the back of strong government investment in the sector. The federal government is responsible for all segments of the education system with the exception of early childhood education, youth polytechnics and home craft centres, which fall under the remit of county governments. As part of its strategy to improve access, the current federal administration has increasingly devoted funds to ensuring free primary education and free tuition across the public system. Indeed, the budget allocation for free schooling increased by 33.3% to KSh40bn ($390.3m) in FY 2015/16. This was part of a plan to ensure free and compulsory primary and secondary education over the next half decade. As part of this process, the government has also allocated KSh3bn ($29.3m) worth of funding to cover examination fees associated with both the Kenya Certificate of Primary Education (KCPE) as well as the Kenya Certificate of Secondary Education.
While primary school is now free across the public system, at the secondary level there are still costs. However, the federal government has taken the a step towards improving access and attendance by setting a cap on secondary school fees, with the total annual costs of KSh53,500 ($522) for state boarding schools and KSh7900 ($77) for state day schools. The overall cost of secondary education is part subsidised by the government, with the current administration contributing KSh12,870 ($126) per student per year. This has helped push up the attendance rates, although relaxed oversight has led to some schools ignoring caps and charging as much as KSh100,000 ($976) per term. However, these problems should become a thing of the past by 2019. In June 2016 President Uhuru Kenyatta promised to make secondary education completely free within the following three years, and pledged to significantly improve the quality and standards of education, and reduce the impediments faced by parents in accessing secondary education.
Food For Thought
This rationale also extends to indirect costs associated with higher learning outcomes. Nairobi developed plans in FY 2014/15 to provide mid-day meals to 1.3m pre-primary and primary school children in rural areas, as well as providing sanitary pads to 675,000 primary school girls and 1.2m secondary school girls. Such measures are a direct response to significant research showing that issues such as nutrition, food costs and cultural attitudes towards menstruation are significant barriers to school attendance in rural areas of Kenya.
The general upwards trend in enrolment and attendance suggests that government interventions are having a positive effect. However, there are some concerns that this momentum could be lost. The education sector’s share of budget expenditures for 2016 fell by almost 3%. However, this was, in part, due to the result of new methods of reporting with budget allocations for school laptops being recorded under the energy, infrastructure and ICT budget for the first time.
Indeed, in general terms the scale of public sector provision has improved as a result of strong investment. This has not only had implications for state schools, but also for the private education sector. Although the public system has shortcomings, there is little demand for private institutions at the primary and secondary level, Eldah Onsomu, a policy analyst in the social services sector at the Kenya Institute for Public Policy Research and Analysis, told OBG. Unlike the health care sector, where low-cost private clinics fill a pressing market need, there is little need for private schools to cater to the volume-driven segments of the market.
The private education market is highly fragmented, with a handful of expensive schools serving the elite while lower socio-economic areas that are out-of-reach of government institutions are served by informal private institutions. “There is little demand for private schools catering to middle-income students,” Onsomu told OBG. The private sector accounts for between 5% and 8% of educational institutions at the primary and secondary level. “When the government said it was bringing laptops into its schools, the majority of private schools closed, especially in the more deprived areas,” Onsomu added.
As this suggests, in terms of basic provision and access, Kenya’s public school system is reasonably robust. “The sector is experiencing a good amount of funding. Financing is not the issue,” Onsomu told OBG. “There is no issue of capacity in the medium term. Even with the current demographic trends, the expansion requirements of the system are not major, but we do need more teachers.” While the pupil to teacher ratio in the public education system remains relatively high at 41 to 1, this is largely comparable with the level for primary education across sub-Saharan Africa, which stood at 42.6 students per teacher in 2010.
Given the country’s demographic trends, educational quality and outcomes have become a particularly pressing issue. Not only is the population growing steadily at 1.9%, but also more than 60% of the population is under the age of 25. This places a heavy burden on the system. While this demand is being met in terms of sheer numbers, the system needs to be able to graduate students that are well prepared for the needs of the labour market.
To that end, the country will need to produce young people that can meet the requirements of private sector companies looking to invest in the country. Currently, this remains one of the greatest challenges for education policy in Kenya.
The government is well aware of quality issues and is contemplating radical reform to address this. Discussions are currently ongoing about proposed changes to the curriculum, examination system and structure of schooling. The reform plan represents an effort to move largely away from a theory and test-based system, to a skills-based system. Through the effort led by the Kenya Institute of Curriculum Development (KICD), the government hopes to have a new syllabus in place for primary and secondary school by 2018. The last curriculum reform was carried out more than 30 years ago, when the school system shifted to the 8-4-4 system – eight years of primary education, four years of junior high school and four years of senior high school.
Current consultations are at an early stage and will include a number of stakeholders, including secondary schools, universities, teachers’ unions, religious organisations and other civil society groups. Fred Matiang’i, cabinet secretary for the Ministry of Education, Science and Technology, has laid out the general parameters of the new programme with a focus on critical thinking and the overall development of students both inside and outside the classroom. “The vision of the curriculum reform is nurturing every learner’s potential, and this will address key issues such as ethical values, equity, diversity, equality of opportunity and excellence for all learners,” Matiang’i told local press in December 2015.
As part of this process the government is contemplating scrapping the KCPE and restructuring the school system. This would entail moving from the 8-4-4 system – in place since 1985 – and moving to a 5-6-3 structure, which includes five years of early childhood and lower-primary education, six years of middle-primary and lower-secondary, and three years of upper-secondary. However, it is still uncertain whether these specific changes will be implemented. At this stage the government has expressed its intent to change. According to a 2016 Education World Forum presentation by Julius Jwan, CEO of the KICD, the rationale for reform rests upon the fact that the current education system does not meet the needs of the country’s learners and tends to be tailored to those who will proceed to higher education institutions.
While the details of reform are yet to be defined, the government has already taken some steps to recalibrate the system to the needs of the 21st-century workplace. The $600m DigiSchool Scheme, for example, is currently being piloted in segments across the primary education system, with the government introducing tablet computers, KICD-developed digital content and associated infrastructure into 151 schools as of May 2016.
The government allocated KSh17bn ($165.9m) in FY 2015/16 for the first phase of the programme. Around 11,000 primary schools will receive laptops, with the scheme aiming to bring computers to a total of 1.2m pupils across 23,000 schools. The Ministry of Information, Communication and Technology (MICT) has also trained 61,000 primary school teachers to use the new tablets and content. Joe Mucheru, cabinet secretary for the MICT, told the BBC that the primary goal was to prepare Kenyan children and schools for 21st-century employment in the global economy.
The challenge of meeting the needs of the labour market is perhaps even more acute at the tertiary level, where digital learning is becoming increasingly more important. “ICT is very important. This is what differentiates a university from other schools. It is an important consideration in university choice, especially for students in and around Nairobi,” Faith Nguru, deputy vice-chancellor of Academic Affairs at Riara University, told OBG.
Indeed, universities are increasingly aware of the need to bring in new teaching methods that are better suited to producing well-trained graduates. By working with private sector companies, universities are increasingly using their expertise to help advise on curriculum development and content delivery. Furthermore, the government is pushing for all students to undertake internships with companies and institutions. Such moves should help the higher education system as it seeks to align its content and practices with the needs of the growing labour market.
At the tertiary level, there is substantial pressure for services. “There is still a strong demand for higher education and this is increasing as the country progresses. High population growth rates are putting pressure on the system as it struggles to accommodate the growing number of students,” Edwin Wamukoya, vice-chancellor of Zetech University, told OBG. Furthermore, Kenya remains a strong regional centre for learning. “We attract students from all regions of Africa. The Kenyan education market is very strong, and international students come here based on its excellent reputation and because of referrals from current students,” he added.
In 2014 both the number of institutions and the number of students was on the rise. There were 67 public and private universities catering to around 421,000 students. This represented a large increase with enrollee numbers doubling in the four years to the beginning of 2015. Demand is greatest for public institutions, but unlike at the primary and secondary level, there is considerable scope for private sector education at the tertiary level. “Kenyans look for public university education because of the public funding, but those who can afford to attend a private university usually do,” Wamukoya told OBG. “While students at private institutions should have access to public financial aid, as stipulated by the 2012 legislation, this has yet to materialise,” he added.
For many private institutions there is strong demand for courses from the middle-income segment of the population. For example, at Zetech University, a private university in Nairobi, the average household income of attendees would range from KSh20,000 ($195) to KSh40,000 ($390) per month. As such, many students require financial aid to be able to access private higher education. In 2014, 39.8% of students took out loans across the entire public and private university system. The main source of student financing is the government-run Higher Education Loans Board. In 2016 the board had an annual budget of KSh8.8bn ($85.9m) that was used to support approximately 200,000 students across 75 universities and 65 colleges. Loans and sponsorship are not only provided by the state, but also by a number of international donor agencies and charities, as well as local religious organisations.
Tuition fees in the private sector are market driven. The average cost of a business course at Zetech University, for example, comes to KSh120,000 ($1170) per year. At Riara University a business degree costs KSh70,000 ($683) per semester, while a law degree is priced at KSh120,000 ($1170) per semester. Fees have been relatively stable with small annual increases, but new funding structures and the position of the Kenyan shilling are likely to lead to further increases in the next 12 months. Nonetheless, private universities remain competitively priced. “We are on par with public universities in terms of cost,” Nguru told OBG.
In 2014 the government began supporting students entering private university for the first time. Under the deal negotiated among the country’s universities, private institutions would accept 25,000 students in the first two academic years of the scheme. The government agreed to fund these students up to a limit calculated on the average cost of a specific course. The move is designed to the benefit both private institutions and the state. “The government is looking for access, and private universities have extra capacity,” Nguru told OBG. However, specific financing terms remain an issue, with state funding falling short of the overall programme costs for many universities. Currently, each academic programme in the public system receives a flat fee of KSh120,000 ($1170) per year, while each university receives a total average of KSh129,060 ($1260) per student. This falls well below the actual private university average cost of KSh259,720 ($2534) per student.
Nevertheless, the government is currently overhauling the funding system. From the coming academic year, loans and grants will be disbursed on a per unit cost basis. As such, more expensive courses, such as medicine, will receive a greater level of government funding and loan support than less expensive degrees. Given that many students at private universities are reliant on government support – the figure stands at approximately 50% at Zetech University, for example – this will also benefit private tertiary institutions.
Indeed, although funding remains a challenge, the private sector is thriving. While private institutions face stiff and growing competition, revenue generated from fees is usually enough to keep these universities in business. For tertiary institutions, meeting operational costs is not usually the greatest challenge. The biggest issue is the initial capital cost, which often acts as a barrier to new market entrants, according to Nguru. “Private sector returns are high and institutions can more easily break even, unlike at primary and secondary levels of the system. But only those strong on capital can initially break through,” Onsomu told OBG.
The education system is currently undergoing a comprehensive transformation. Funding is deepening as the state boosts access. With strong demographic growth and a massive youth population, education reform is seen as a priority. Indeed, the emphasis is moving from access to quality, as the government looks to reform content and methodology in the primary and secondary system. With high demand for services and a focus on employability, there are increasing opportunities for private providers at the tertiary level. Given the underlying conditions these investment opportunities are likely to stay available.