Increased spending on education by Kenya’s wealthy is rapidly enriching investors in high-end private schools, earning them billions of shillings in annual revenue, according to newly published taxpayers’ report.
The Kenya Revenue Authority’s (KRA) latest ranking of top taxpayers shows that at least 25 private schools have broken into the special club of institutions that earned more than Sh350 million in annual revenues.
The list includes Molo-based St Andrews Turi, International School of Kenya (ISK), Brookhouse and the German School that offer international curricula, and mostly prepare their students for further studies in foreign universities.
Also in the list are Kilimani Junior Academy, Makini Schools and Juja Preparatory that offer the national curriculum, but have more recently become popular with the decline of standards in public schools that began with the introduction of free primary education (FPE) in 2003.
That change in policy caused a sharp increase of enrolment in public schools that was not matched by expansion of facilities and the teaching force compromising the quality of learning.
Pupil-to-teacher ratio has since the change in policy risen from 38:1 to about 41:1 currently.
Leading political parties in the August 8 elections have promised to make public secondary education free beginning next year, raising the potential of standards falling at that level and increasing enrolment in private secondary schools.
High private education spending
The KRA list shows that the 25 schools have a combined annual turnover of at least Sh10 billion, indicating the depth of spending on private education.
The schools charge hundreds of thousands of shillings in annual fees with the elite group levying as much as Sh2 million per student.
St Andrews Turi, one of Kenya’s most expensive schools, for instance, charges Sh2.1 million for a student in Year Eight on full board.
Increased demand for private education has more recently attracted new players, including Nova Pioneer and Sabis International School that is partly owned by Centum Investment Company Plc.
High returns in the industry have also attracted private equity (PE) firms, leading to multi-billion shilling deals.
Africinvest, for instance, was among a consortium of investors that sold Brookhouse School to UK-based PE fund Educas for an estimated Sh3.6 billion in 2015. This was one of the biggest transactions in Kenya’s high-end education sector.
Existing and new private school brands are expected to continue benefiting from growth of the local middle class and expatriates working for multinationals, foreign governments and global institutions like the UN.
Kenya’s rich households and expatriates, including ambassadors and executives, prefer private schools offering international certifications such as the General Certificate of Education (GCE). The general effect of the rush for private schools has been a rapid increase in fees.