NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

As COVID-19 spreads across the continent, African universities are shutting their doors in unprecedented numbers. Students are taking virtual classes and trying to adapt to learning at home. Much like students in other countries around the world, they’re finding that conditions at home – which range from distracting (at best) to chaotic (at worst) – can negatively impact their ability to learn. But they’re also facing some unique challenges: For many African students, home is not an ideal learning environment due to shaky electricity supply and slow or non-existent internet.

Indeed, though COVID-19 has brought these issues to the forefront for students across Africa, the challenges of student housing exist independent of the pandemic – and they’re often overlooked. Impact investments in Africa’s education sector tend to focus on funding existing schools, training teachers, and edtech and remote learning opportunities. Scant attention is paid to what happens when students leave the classroom. Yet a student’s experience outside the classroom is as important as their experience in the classroom – and many students have lacked a home environment that’s conducive to learning since long before COVID-19 came along. As university students everywhere recognize, living on or near campus is a dramatically different experience than commuting from home. From being able to walk to one’s dorm between classes, to having convenient access to libraries, study rooms and other services, student housing delivers many benefits that enhance the educational experience.

That’s why investors can have a significant impact on student outcomes by investing in student housing. Expanding opportunities for students to live and study on campus can make higher education more accessible to millions of Africans, improve educational outcomes, and help prepare the next generation of African professionals to fill the talent shortage in their local markets.

Preparing for a Tsunami of Students

Already drastically overcrowded, African universities are unprepared for the coming tsunami of future students, as they face the looming challenge of the continent’s youth bulge. Sub-Saharan Africa is home to nearly 90 million people between the age of 20-24, and this number is set to double in the next three decades. Nearly 60% of Africans in that age group will have completed secondary school by 2030 and will look to enroll in university. These new students will join an already overburdened university system. In the 10 most populous African countries, there are only 740 universities for 660 million people. The scarcity of higher education institutions is reflected in low tertiary enrollment across the continent; less than 10% of youth in Sub-Saharan Africa are enrolled in tertiary education. The imbalance between supply and demand has resulted in large classroom sizes ; there are 50% more students per professor than the global average. These figures show the need for further development of African university systems by opening more universities and hiring more professors.

Overcrowding in African universities extends to student accommodations, which affects student outcomes. With scarce on-campus accommodation options, students are forced to seek housing  that’s often far away from the university. The extra burden of commuting to school can negatively affect learning outcomes and ultimately lead to a decrease in enrollment rates. A student in Lagos, for instance, cannot be expected to perform well in school if their morning and evening commutes take several hours each in the city’s infamous traffic.

However, addressing this issue is easier said than done. The scale of the student housing deficit is astounding: A leading student housing developer estimates that students face a shortfall of over 300,000 beds at universities in South Africa alone. To take just one typical example from that country, roughly four students were competing for every single available bed at Stellenbosch University. Students made headlines by protesting these shortages (and other issues plaguing higher education in South Africa) in 2015, 2017 and 2019. The widespread “#FeesMustFall” protests centered around tuition rates, but students were also protesting against housing conditions. Some students at Wits University were resorting to sleeping in campus libraries since they could not afford housing.

The Need for Impact Investing in Student Housing

Although the South African government quelled the protests by promising more public spending on education, government funding alone cannot solve the student housing crisis. Government-sponsored student accommodation often generates the most complaints about cleanliness and safety.

That’s why impact investors looking to alleviate a major bottleneck in the continent’s higher education system are well-placed to provide an alternative solution. Private investment in affordable student accommodation can be both an impactful and profitable opportunity. Such investments would provide immediate relief for overcrowding on the campuses of African universities. Investors would also benefit from the long-term trend of rising university enrollment rates across the continent; Kenya alone, for example, faced a student housing gap of over 600,000 beds last year.

In considering this opportunity, investors should recognize that education and infrastructure are not completely distinct investment sectors, and education investments can and should focus on more than software and teaching tools, financing existing schools and teacher training. This is something that education companies working in Africa understand well. For instance, Bridge International Academies illustrates how education companies must take a broader approach when operating in African markets. While Bridge does not build student housing, they have integrated building schools into their business model alongside other innovations in curriculum and student performance metrics. This focus was part of Bridge’s pitch to investors from the start, and the investors that backed them did not balk at the idea of an education company expanding into infrastructure. Education and infrastructure go hand in hand, yet there are only a few student housing developers in Africa that operate more than 1,000 beds – which presents an opportunity for investors.

Africa’s population of students seeking higher education is only growing, yet there is no guarantee that these students will enjoy a full on-campus learning experience. Impact investors in education have typically focused on learning outcomes in the classroom, but they must now expand their mandate to include improving a student’s experience outside of the classroom as well. Addressing the student housing shortage will make university education more accessible, while boosting student performance. It is an integral part of improving educational outcomes across Africa – and a worthy focus of investment capital.

Abayomi Onasanya is the founder/CEO of Student Accomod8.

Photo: Dormitories at the University of Ghana. Courtesy of Adam Cohn.