Amazing! How This Low-Cost Private School Chain Is Educating Poor Children For Profit In Ghana
by John-Paul Iwuoha and Dr. Harnet Bokrezion, authors of 101 Ways to Make Money In Africa
Who would ever have thought that educating poor African kids could be the basis for a viable business?
On a continent where government-run schools are notorious for low quality education and school fees in private schools are priced out of the reach of the poor, millions of poor parents who are willing to send their kids to private schools have very few (if any) options.
Omega Schools (Ghana) is a low-cost private school chain that is currently exploiting the huge, lucrative but overlooked demand for affordable quality education in Africa. At an incredibly affordable school fee of less than $1 a day per student, this school franchise is attracting thousands of poor African kids to school while making a very tidy profit.
How did it pull this off?
The idea of low-cost private school chains in Africa appears to be gaining ground. The idea for Omega Schools was conceived by Ken Donkoh, who comes from the Cape Coast region of Ghana.
Coming from a very poor background himself, he clearly understands the challenges poor people face when it comes to getting affordable quality education for their children. He observed that the Pay-As-You-Learn model would be popular among poor people as it allowed them to pay a daily school fee (instead of the monthly or term-based school fees).
Ken also noticed that the astounding success of mobile phone companies in Africa is mainly due to the Pay-As-You-Go Service that allows millions of poor people to buy cheap call credit. That was when he hit his golden idea! He would develop a profitable low-cost private school chain that targets poor children in Ghana. A social development business that would make good profits while providing good quality education to young Africans!
Using a business plan he developed for this idea during his MBA program, he approached Professor James Tooley, who is well-known for his ground-breaking research on private education for the poor in India, China and several parts of Africa.
After a couple of twists and turns, the plan was clear for take-off. The first school in the chain was scheduled to open its doors on 1st September 2009.
On D-day, Ken Donkoh and Professor Tooley expected only 200 students to show up. Instead, more than 400 kids showed up. By the end of the month, up to 1,000 students had been enrolled with 300 more on a waiting list! Today, Omega Schools has more than 20,000 students in schools across Ghana, offering education from nursery to Junior High school.
For a daily school fee of 1.5 Ghana Cedis (about $0.75), Omega students get uniforms, a school bag, work books and exercise books, and a hot daily lunch. Unlike what is common in many of the ‘free’ government schools, there are no ‘hidden charges’ in Omega’s fees.
To ensure a low cost structure, the school employs high school graduates as teachers. These guys are quick to learn, very enthusiastic to teach and don’t cost as high as university or government-trained teachers. With only two weeks of pre-service training, Omega’s young teachers become ready to take up the teaching challenge in its classrooms!
Its schools are open 7 hours a day (compared to 4 hours at government schools).
Omega’s low-priced private education model is attracting a lot of attention both locally and internationally. In mid-2012, Pearson, the giant UK-based education company announced that Omega schools would receive a portion of its $15 million investment fund targeted at providing affordable education to poor children in Africa and Asia.
With similar investments and its unique brand, Omega Schools plans to expand beyond Ghana into other countries of West Africa. It has already started making inroads into Sierra Leone, Liberia, Gambia and Africa’s largest market, Nigeria. Its franchise model makes it possible for these low-cost schools to spread fast thereby benefiting tens of thousands of African children.
The future is very bright for Omega!
Despite this huge demand for low-cost and quality education, the government’s ‘free’ education system has failed across Africa. Poor funding, rapidly falling standards and general system failure is forcing millions of Africans to seek alternative and better quality options. It’s no surprise that the ‘Omega formula’ has achieved astounding success in Africa.
The potential to create change, impact lives and still achieve financial success is huge in Africa. With similar innovative social business models like this, entrepreneurs can achieve very great things in Africa!
You too can become part of Africa’s bright future. It’s possible!
If you’d like to read more amazing success stories like this one and learn more about the interesting business opportunities in Africa, you should get a copy of our new book: 101 Ways To Make Money In Africa.
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