The South African Government considers education its highest domestic priority and the single greatest long-term challenge facing the country. The sector receives the greatest share of government spending (6% of GDP), with 21% of non-interest allocations set aside for basic and higher education.

While we have made enormous strides in providing access to schooling with 98.8% of children aged seven to fourteen enrolled in school, it is struggling to provide a quality education to most of its 12 million learners in its 25 000 schools.

Most learners exiting the school system are not equipped with basic skills and core competencies necessary to succeed in the workplace, much less in a highly competitive global market.

Part of Government’s solution to addressing the problem was the Basic Education Laws Amendment (BELA) Act of 2024, implemented in September 2024 and represented a key legislative milestone. Its key features included:

• Compulsory Grade R (reception year) attendance from age six.

• Compulsory schooling up to Grade 9 or age 15.

• Recognition of South African Sign Language for instruction.

• Expanded oversight on admission and language policies in schools

Making Grade R compulsory means that early learning centres are now integrated into the Department of Basic Education and not the Department of Social Development. It is widely agreed that to influence the quality of education targeted initiatives need to start with children as young as three years old, therefore the expansion of early learning programs has become a focus, receiving significant investment to formalise and improve the quality of output in this segment. This is a step in the right direction, but to speed up the rate of change, a multi-pronged approach is required. This could include, investing smarter into early childhood education, holding schools accountable, boost rural connectivity to the internet, and aligning vocational and tertiary pathways with labour market needs.

Education and economic reforms are deeply intertwined. Education is both a cause and an effect of economic stagnation. Improving the education system is a necessary precondition for the growth of the country’s economy. Meaningful progress requires commitment to systemic transformation.

Education reform should therefore be a key focus area for the South African private sector.

The cooperation between the public and private sector is a primary way education reform can be accelerated. The private sector can play a significant role by leveraging its resources, expertise and influence to complement government efforts. Below are examples of how business can become involved.

Investment in Infrastructure and Resources

• Build or refurbish schools - Especially in under-resourced rural and township areas.

• Provide learning materials – Examples include textbooks, stationery, and digital devices.

• Support ICT integration - Fund the rollout of internet access, computers, and e-learning platforms.

Skills Development and Training

• Teacher training - Partner with government or NGOs to upskill teachers in pedagogy, subject content, and digital literacy.

• Leadership development - Support training for school principals and administrators in effective school management.

• STEM education support - Offer programs that boost science, technology, engineering, and mathematics education.

Public-Private Partnerships (PPPs)

• Adopt-a-School programs - Companies can “adopt” schools, providing financial and non-financial support.

• Co-manage schools - Collaborate with the Department of Basic Education on managing public schools to improve outcomes.

• Curriculum enhancement - Work with education authorities to align school curricula with market needs, especially in technical and vocational education.

Funding Scholarships and Bursaries

• Tertiary education support - Provide scholarships to deserving students, especially in high-demand fields.

• Support for Technical and Vocational Education (TVET) colleges - Help fund these colleges and create pathways to employment.

Innovation and Entrepreneurship in Education

• EdTech investment - Support or develop educational technology solutions tailored for local needs.

• Social entrepreneurship - Fund or incubate education-focused social enterprises.

• Research and data analytics - Use data to identify education gaps and pilot scalable solutions.

While the private sector cannot replace the role of government in education, it can amplify efforts, bridge gaps, and bring innovation. Sustainable reform requires long-term collaboration between government, business, civil society, and communities.

The idea of viewing education as an asset class is becoming more accepted in the South African market, with pension funds and private equity houses allocating a greater amount of capital towards the sector. However, the Old Mutual Alternative Investments Education Funds, namely the Schools and Education Investment Impact Fund South Africa and Education Investment Impact Fund of South Africa, remain the only education focused investment funds in the country. As social impact funds, investment goes beyond achieving a financial return, it is used as a catalyst to drive improved academic outcomes, better governance and fiscal discipline to ensure sustainable enterprises and transformation of the sector.

The Funds continue with a strategy that allows diversified investment across multiple operators into all forms of education investment. We are currently incubating several deals and partnerships in basic and tertiary education.

Fixing education is South Africa’s most bankable growth strategy.

Government has moved on policy. Now business must shift from cheque-book CSI to outcome-based partnerships that fund early learning, strengthen teachers and leadership, connect schools and align curricula with work. This is what patient capital with measurable returns looks like: literacy and numeracy gains, better matric results, higher throughput into TVET and university and improved employability.

If you want to be part of building South Africa’s education future, partner with us by visiting: Education Investment Impact Fund of SA | Old Mutual