Mar 2, 2025
Africa is undergoing a significant period of change. The continent offers exceptional investment potential due to its fastest-growing population and rapid urbanization. However, in the midst of all the talk about fintech and agriculture, two areas are unexpectedly understudied: Proptech and Education. These industries promise significant societal change and large returns, making them prime candidates for disruption.
Introduction to Africa’s Investment Landscape
Africa is home to over 1.3 billion people, with projections indicating this number will reach 2.53 billion by 2050. The continent boasts 60% of the world’s arable land and significant mineral reserves, yet it contributes only 3% to global GDP. Despite these challenges, Africa is on track to become a major growth market, with over 400 companies generating more than $1 billion in annual revenue. The implementation of the African Continental Free Trade Area (AfCFTA) is expected to further boost economic integration and attract foreign direct investment (FDI).
Education Sector: Challenges and Opportunities
Current Challenges
- Learning Crisis: Africa faces a severe learning crisis, with millions of children out of school and many more falling behind in basic skills like reading and math. The COVID-19 pandemic has exacerbated this issue, with nearly 89% of 10-year-olds projected to be unable to understand a simple text.
- Infrastructure and Capacity: The education system is at capacity, and the demand for quality education is increasing rapidly. By 2050, Africa will account for over 40% of the school-age population in low- and middle-income countries.
- The Teacher Shortage Crisis: Africa’s growing population is driving a surge in student enrollment, yet classrooms remain overcrowded with over 50 students per teacher, far exceeding the global average of 23:1; while inadequate teacher training and poor retention rates further strain the education system.
- The Digital Divide: Africa’s digital divide remains a major challenge, with only 43% of the population having internet access; far below the global average of 66%, while rural penetration drops to 20% or lower due to high costs of internet and devices, with regional disparities ranging from 60%+ in North Africa (led by Egypt, Morocco, and Algeria) to around 42% in West Africa (dominated by Nigeria but with rural gaps), 35–40% in East Africa (with Kenya leading but Ethiopia lagging), ~30% in Central Africa (with very low access in DR Congo and Chad), and over 50% in Southern Africa, where South Africa leads in connectivity; the situation is worsening as the Nigerian Communications Commission (NCC) recently approved a 50% increase in telecommunication tariffs, causing a sharp rise in the cost of phone calls (from N11 to N16.50 per minute) and mobile data (with a 1GB bundle jumping from N300 to N800), further limiting access to online education and digital opportunities.
There are 5.35 billion people using the internet in 2024, equating to 66.2 percent of the world’s total population. Internet users have grown by 1.8 percent over the past year, with 97 million new users coming online for the first time during 2023.
Investment Opportunities
- Growing Demand: The demand for educational services is rising due to a growing population. Investing in education infrastructure, technology, and innovative learning platforms can help bridge the gap between supply and demand.
- Digital Learning: The COVID-19 pandemic has accelerated the adoption of digital learning tools. Investors can capitalize on this trend by developing and investing in e-learning platforms, educational software, and digital literacy programs.
- Vocational Training: There is a significant need for vocational training that equips students with skills relevant to the modern workforce. Investing in vocational education can help address unemployment and support economic growth.
Proptech — Real Estate in Africa
Africa is experiencing the fastest urbanization rate globally. By 2030, 50% of Africans will live in urban areas, necessitating approximately 65 million new housing units. However, the current housing deficit is staggering: Nigeria alone needs 22 million units, while Kenya faces a deficit of 2 million units.
Property Technology (PropTech) is driving a significant revolution in Africa’s real estate industry. They are altering how Africans buy, sell, rent, and manage properties in response to increased urbanization, an emerging middle class, and an increasing demand for affordable housing.
While fintech has dominated Africa’s startup sector, PropTech remains an untapped opportunity for investors. However, interest in real estate is rising, especially in Africa, particularly in Nigeria, where more people are exploring this sector.
Challenges and Market Inefficiencies
- Fragmented Real Estate Market: Information asymmetry, lack of transparency, and inefficient property management practices hinder growth.
- Infrastructure Deficits: Africa faces significant infrastructure challenges, including housing shortages and inefficient property management systems. Nearly 600 million Africans lack access to electricity, and many more face housing deficits.
- High Cost of Financing: Mortgage penetration is below 5% in most African countries due to high interest rates and stringent lending conditions.
- Land Ownership Complexities: Inconsistent land registration systems create legal uncertainties, affecting property investments.
Investment Opportunities
- Digital Property Listings and Marketplaces: Platforms like PropertyPro (Nigeria) and Houses.ng are addressing information gaps by offering verified property listings.
- Smart Property Management: Startups like Estate Intel are using data analytics for property management, enhancing operational efficiencies.
- Fractional Property Ownership: Innovations in blockchain technology are enabling fractional ownership, making real estate investments more accessible.
- Smart Cities and IoT Solutions: As urban centers grow, smart city solutions in security, utilities management, and waste management are gaining relevance.
Strategies for Success in Education and Proptech
Below is an expanded exploration of actionable strategies for success in these sectors.
Strategies for Success in Education
1. Investing in Teacher Training and Development
Teachers are the backbone of any education system. Africa faces a significant shortage of qualified teachers, with UNESCO estimating that 9.5 million additional teachers will be needed by 2050 to meet the growing demand for education.
Actionable Steps:
- Develop teacher training programs that emphasize both subject matter expertise and pedagogical skills.
- Use technology to provide ongoing professional development, such as virtual workshops and online certifications.
- Offer incentives like competitive salaries, career growth opportunities, and housing allowances to attract and retain talent.
Case Study: Rwanda’s Ministry of Education has successfully implemented digital transformation initiatives across 4,900 schools, enhancing teacher capacity through technology integration.
2. Leveraging EdTech for Inclusive Learning
EdTech solutions can bridge gaps in access, equity, and quality of education. Digital tools can help mitigate challenges such as overcrowded classrooms and limited resources.
Actionable Steps:
- Deploy affordable digital devices (e.g., tablets or laptops) in classrooms.
- Expand access to internet connectivity in rural and underserved areas.
- Develop localized e-learning platforms with content tailored to African curricula.
Case Study: Nigeria’s EdoBEST initiative uses digital technologies to improve teaching and learning outcomes, serving as a model for scalable EdTech adoption.
3. Enhancing Access through Infrastructure Development
Africa needs at least 9 million additional classrooms by 2050 to accommodate its growing school-age population. Infrastructure investments can significantly improve access to education.
Actionable Steps:
- Build cost-effective schools using innovative materials like prefabricated structures.
- Partner with private investors through Public-Private Partnerships (PPPs) to fund large-scale infrastructure projects.
- Incorporate sustainable energy solutions like solar panels to power schools in remote areas.
4. Promoting Equity and Inclusion
Marginalized groups: such as girls, refugees, and children with disabilities face significant barriers to education.
Actionable Steps:
- Implement policies that ensure free or subsidized education for vulnerable populations.
- Provide scholarships or financial aid programs targeting girls and marginalized communities.
- Design inclusive curricula that accommodate diverse learning needs.
Case Study: Senegal saw significant improvements in literacy rates by distributing high-quality textbooks to all children, demonstrating the impact of equitable resource allocation.
5. Adopting Results-Based Financing Models
Innovative financing mechanisms like results-based models can ensure accountability while driving impactful investments.
Actionable Steps:
- Tie funding disbursements to measurable outcomes such as improved literacy rates or school enrollment numbers.
- Encourage international donors and development banks to adopt multi-phase programmatic approaches (e.g., AIM4Learning).
Strategies for Success in Proptech
1. Leveraging Technology for Affordable Housing
Africa faces a housing deficit of over 50 million units. Proptech solutions can address this gap by streamlining construction processes and reducing costs.
Actionable Steps:
- Invest in modular construction techniques that lower building costs.
- Use AI-driven platforms for property valuation and market analysis to optimize housing affordability.
- Develop blockchain-based systems for secure property transactions.
Case Study: M-Kopa Solar provides affordable solar-powered homes by integrating technology into housing solutions, showcasing how innovation can address infrastructure deficits.
2. Building Smart Cities
Urbanization is accelerating across Africa, with cities projected to house an additional 950 million people by 2050. Smart city initiatives can enhance urban living through integrated technology solutions.
Actionable Steps:
- Implement IoT (Internet of Things) systems for efficient utility management (e.g., water, electricity).
- Use GIS (Geographic Information Systems) tools for urban planning and land use optimization.
- Promote eco-friendly construction practices to build sustainable cities.
3. Developing Digital Property Platforms
Digital platforms simplify property management, buying, renting, and selling processes while increasing market transparency.
Actionable Steps:
- Create user-friendly apps that connect buyers, sellers, landlords, and tenants.
- Incorporate AI chatbots for customer support and property recommendations.
- Offer subscription-based models for real estate agents to list properties on digital platforms.
Case Study: SweepSouth leverages technology to offer cleaning services tailored to property management needs, demonstrating how digital platforms can enhance operational efficiency.
4. Encouraging Regulatory Reforms
Complex regulatory environments often hinder proptech growth. Streamlined policies can foster innovation while protecting stakeholders.
Actionable Steps:
- Advocate for simplified land registration processes using blockchain technology.
- Collaborate with governments to develop clear guidelines on property taxation and ownership rights.
- Establish regulatory sandboxes where startups can test new technologies without bureaucratic constraints.
5. Fostering Public-Private Partnerships (PPPs)
Collaboration between governments and private investors is crucial for scaling proptech solutions across Africa.
Actionable Steps:
- Partner with local governments to co-develop affordable housing projects.
- Engage international investors in funding large-scale smart city initiatives.
- Use PPPs to build infrastructure like roads, utilities, and public spaces that complement housing developments.
Education and PropTech in Africa are not just investment opportunities; they are avenues for social impact and economic transformation. By bridging education gaps and addressing housing shortages, investors can contribute to sustainable development while enjoying high returns. As Africa continues its digital transformation journey, these overlooked sectors are set to become the next big investment frontiers.
Are you ready to be a part of Africa’s growth story? The time to invest is now! BGR is here to help you scale in the African market, we are more than just a consulting firm; we’re a passionate team of experts dedicated to solving your people and process challenges.
Let us help you crack the hard nut!