Knowledge has been identified as the most powerful tool in driving economic, social and technical advancement globally and acts as a foundation for weighing a nation's competitive advantage.

 

The benefits of an educated society to an economy is immense and can be seen in some of the most developed economies today that have invested heavily in training their human resources and are reaping the huge profits

Education in Nigeria
The standard of education in Nigeria has been on the downward spiral over the years despite several reforms such as changing from the 8-6-2-3 system to 6-5-2-3 down to the 6-3-3-4 system, among others. These changes were introduced to improve the standard of education but did not deliver the required result and the attitude of the government has not helped the situation. Schooling in Nigeria remains an issue of concern and in need of total revamp.

Challenges in the sector
Some of the challenges faced in the sector and which investors have to contend with include funding, facilities/equipment, staffing/manpower, appropriate remunerations, pricing/fees, among others.

Why invest in education?
Growing population: Nigeria is the most populated country in Africa and among the top countries identified to drive the world population between 2005 and 2050. The current system will not cater for the projected growth (146%) in the coming years unless there is massive investment in the education sector. Failure to develop the growing human capital will further enhance our backwardness in the global terrain.

Growing middle class: The rapid growth of the middle class increases the number of people who can afford quality education. This is a good time to capture market.

Falling public school system: The government is no longer focused on providing quality education for its citizens. As a result, public schools lack maintenance; broken down walls replaced classrooms, while the remaining classrooms do not have windows or doors, coupled with other unhealthy conditions that make learning difficult. In addition, teachers' welfare suffer and at the end the students perform poorly. Proper investment and management can take care of these issues.

This year, over a million candidates registered to sit for the Joint Admissions and Matriculation Board (JAMB) exams as against over 800,000 candidates that registered for the 2006/2007 admission year and over 700,000 candidates the year before. The number keeps growing, indicating that the demand for education in Nigeria is high.

Strategy
Following the opening up of the sector, opportunities abound for investment at various levels of education. There are several strategies you can employ to invest in education; you can either invest directly or indirectly.

Direct investment
This requires setting up your own school or training centre:

• Start a private primary or secondary school: This is about the most common type of investment in education. There are a number of existing private schools, but to make a difference you have to maintain high standards both in morals and at the management level.

• Start a university: This is highly capital intensive and requires a lot of detailed research to be able to meet the need and demand of students and that of employers, particularly in new courses.

• Invest in language schools: The need for multiple language speakers increases with the dynamics of the business world. The demand for people who can speak more foreign languages such as French, Latin, German and Spanish is on the rise, especially in the embassies, banks and other institutions that deal with foreigners.

Speaking multiple local Nigerian languages is also an asset; it is becoming popular among telecommunications companies in Nigeria. Training for such skills is not common in Nigeria. Though there are a few Nigerian language schools around they are not enough. There is the Alliance François both in Yaba and in Ikoyi Lagos, Ilorin, Kwara State, and other locations.

• Special children teachers: Providing training for teachers who cater for children with special needs such as autistic children and children born with ‘down syndrome’ and disabled children. Parents of such children are often in a dilemma when the children reach school age because they often have a tough time getting along with other children. Parents hire specially trained teachers who attend to the children at home, or find one of the few schools which cater for the children with special needs. This service is often not cheap and there is an increasing need for such specially trained teachers. Also, starting a school to cater for this need will be a welcome idea, as well as providing training for such skills. A new school for autistic children started in Lagos recently.

• Professional skills school: Skilled culinary staff such as professional caterers, cooks, housekeepers, nannies, gardeners, and so on. Good cooks and caterers are in high demand by fast food businesses, in homes, and high quality restaurants and hotels. In most cases expatriates are employed in place of Nigerians because employers believe the expatriates have better training than their Nigerian counterparts.

This thinking will change if there are established private institutions that provide training for such skills. Though some possess some of these skills naturally a touch of formal training will enhance their value and employability.

• Finishing school: A finishing school is a private school that teaches cultural and social etiquettes. Though most finishing schools abroad are for girls there is no discrimination against gender when judging good manners. Finishing schools are not common in Nigeria but it is a sure investment opportunity.

• Private teachers training: Currently, only government trains teachers. This has not proven sufficient over time. Just as there are private schools, private teacher training colleges will help upgrade the standard of teaching and improve the worth of teachers in Nigeria. The standard obtained in private schools is not the same with what is obtained in public schools. As it is, government-trained teachers often have difficulty getting into the corporate world when they want to because they have not been exposed to the ethics of the corporate environment which the private bodies provide.

Indirect investment
This will come in form of:

• Consultancy: More Nigerians want to school abroad and need assistance in getting their visa and admission requirements. Meeting these needs is a growing which a number of investors are already taking advantage of.

• Publishing: Most of the books in public schools are old and are merely being reprinted. Some of the books in use do not capture modern scientific and technological information.

• Real estate: setting up a school, a training centre, or a publishing company requires land and or office space. An investor could invest in suitable properties, which can then be leased/rented out or sold to prospective school proprietors.

• Equities: One can also invest in education by buying stocks in quoted companies engaged in the publication and printing of educational materials. Companies such as Longman and Thomas Wyatt, who publish and print educational materials like textbooks and notebooks are doing well in the market.

• An investor could also set up a modern library for use, for a fee, by schools and even companies which undertake researches.

Capital
The capital required depends on the scale you want to operate at. A good feasibility study is one way to determine your start-up cost. For any of the strategies, you need: land, good staffing, school curricula, marketing/advertising and logistics.

If you choose to set up a school, your overall budget percentage breakdown may look something like the table above. With proper planning you can achieve your dream school.

Returns
Schools, like real estate, continue to yield profit as long as they maintain standards. This will require maintenance and upgrading of the human capital, physical structure and other resources. Experts say an average of 35% return annually is typical if the school is of top quality, with professional and highly trained educators and administrators in charge.

The temptation might be to try and reduce cost by using non-professionals, but then that will hamper your ability to attract high income clients, who are prepared to pay high fees to get good quality education/training for their children or for themselves.

An investor also benefits from tax rebates by investing in education: educational materials and services provided by educational institutions are exempt from value added tax.