Africa’s growing workforce: A demographic opportunity

With Africa poised to have the youngest and largest workforce globally by 2035, as the population increases to 1.1 billion people, roughly 440 million of them will be under the age of 25. This demographic shift presents immense opportunities for investment in the education sector. Driven by Africa’s strong economic growth and a rising middle class, with six out of the ten fastest-growing economies being African, investing in the education sector offers a unique chance to accelerate progress in human development and enhance community resilience.

Sandrine Henton, Managing Director at EG Capital, sheds light on how these demographic shifts coupled with strong economic growth in Africa are creating a fertile ground for EdTech solutions. With 40% of the population in Africa (1.4 billion) currently under 15 years old and an additional 100 million children expected by 2050, Africa’s education needs are rapidly expanding.

According to the Mastercard Foundation’s report, Young Women in Africa: Agents of Economic Growth and Transformation by 2030, increasing the economic productivity of young women alone could unlock $287 billion in economic value, generating 23 million jobs by 2030. This projection emphasizes the crucial role education will play in driving economic growth across the continent and ensuring that no one gets left behind. Henton underscores how these shifts, combined with Africa’s tech-savvy youth, present an unparalleled opportunity for the growth of EdTech solutions.

Africa as a Global Talent Hub Creating Local, and International Jobs

Henton explains that Africa is rapidly becoming a global talent pool, with a growing demand for qualified professionals in sectors such as technology, engineering, data science, nursing, and elderly care. Countries like Kenya, Rwanda and South Africa are becoming notable hubs for customer experience management (CXM) and creating remote jobs opportunities in the continent driven by the demand for talent in the US, and global technology sector. This talent boom is driving both local and international demand for scalable, tech-enabled education platforms that can meet the growing need for skills development.

Private Sector Investment in African EdTech

Historically, Africa’s education sector has been largely driven by government expenditure and policy. However, recent years have seen an increasing flow of private sector investment into the sector. Henton highlights the growing role of private investors in addressing the significant gaps between the demand for education and the available supply. The acquisition of South African EdTech startup GetSmarter by 2U for $103 million underscores the rising global interest in African digital education solutions.

As a trusted local fund manager working alongside its global network of investors and partners, EG Capital will play a critical role in mobilising private sector capital for the Education sector in Africa. The firm’s investment strategy focuses on combining private sector capital with government collaboration to create scalable and equitable education solutions across the continent.

Henton notes that since 2010, the number of students in primary, secondary, and tertiary education has grown by 23%, 30%, and 14% respectively, signalling significant market growth, and yet more needs to be done to ensure investments in the Education sector takes into consideration the principles of ‘leave no one behind’ as ultimately capital flows need to be directed towards Africa rising middle-class families, as well as lower income communities who  may never be able to afford private education. Henton believes innovating financing structures, coupled with technological advances, will play a catalytic role to ensure equitable, and inclusive investments in Education on the continent.

A Bright Future for African Education

With a youthful population, rising demand for digital learning solutions, and increasing private sector involvement, Africa’s education sector is ripe for investment at the growth stage, as well as supporting early-stage innovative models such as Project Y in South Africa and Chancen in Kigali. EG Capital is at the forefront of this transformation, identifying opportunities typically at the growth stage that promise not only financial returns but also a positive societal impact.