Could impact funding solve our education crisis?
With the #FeesMustFall movement quietening for now, it seems that there are some initiatives out there that are looking to solve our education crisis, at least at school level. Angelique Ruzicka relays whether Old Mutual’s impact funding will be one of those solutions.
According to the World Economic Forum’s Global Information Technology Report, the overall quality of South Africa’s education system ranked 137 out of 139 countries in 2016. We’re close to the very bottom of the list. While there is no quick-fix to combat the education crisis the country is facing, impact funding could be a game-changer in improving education across the country, or so Old Mutual claims.
Lala Steyn, head of the schools and Education Investment Impact Fund of South Africa (Schools Investment Fund) – the country’s first education impact fund, located within the Impact Funds business unit of Old Mutual Alternative Investments – says that since launching in 2011, the fund has invested in 24 schools with 16 500 learners enrolled in 2017.
“The Schools Investment Fund, which was launched to address the education infrastructure backlog and support the improvement of education in South Africa, partners with expert education operators to deliver not only affordable schooling, but quality education. At present, there are eight school operators rolling out facilities across the country, including Meridian, BASA, Royals and Prestige – to name a few,” says Steyn.
The fund has two main objectives when facilitating the launch of a school; one social and the other commercial. “The social objective is measured in terms of the education outcomes being improved year on year and the number of additional children being given the opportunity to learn and develop. Of the matric class of 2016 who sat for the National Senior Certificate (NSC) exam, 93.3% passed and 44.3% achieved a university exemption – far exceeding average national standards.
“It is also incredibly fulfilling to see the transformational power of education. The Meridian Pinehurst School in Cape Town, for example, has its first matric class this year, which includes youngsters who will be the first matriculants in their family,” says Steyn.
In terms of meeting the commercial return objective, Steyn explains that it would be premature to say whether or not this has been achieved before the investments have reached their full-repayment stage. “These investments have a long-term time horizon, and the initial phase – which many schools are currently still in – is characterised by spending, as the schools are being built and set up, with returns only occurring later in the process. However, the fund’s returns to date exceed the hurdle and forecasts are good,” she adds.
The fund has so far allocated R1.3 billion over the past six years. However, more is yet to come. “At this point, we already have 10 more schools that are set to open in 2018, which means we are right on track to achieving our long-term goal of having enrolled a total of 50 000 learners by 2030,” says Steyn.