Giving Compass' Take:

• Global investment in Africa's education is necessary and the onset of private funding from impact investors, entrepreneurs and philanthropists could help spur change in Africa. 

• What other global industries could use private investment and alternative financing plans? 

• Read about the international corporations already making efforts to finance global education initiatives. 

One of sub-Saharan Africa’s most famous sons, Nelson Mandela, accurately characterized education as “the most powerful weapon ... you can use to change the world.”

A UNESCO report identified a worrying trend: Despite a significant global push for new investment and the inclusion of a number of education targets in the Sustainable Development Goals, aid to global education has stagnated since 2010. And while sub-Saharan Africa is home to more than half the world’s out-of-school children, it receives only about a quarter of global education aid. Sub-Saharan Africa’s improvement in primary education has exceeded that of any region since the original Millennium Development Goals were established, but daunting challenges remain.

The funding gap is not likely to go away anytime soon. While it would be ideal if richer countries increased education aid, the anticipated shortfall to reach agreed global targets is a staggering $39 billion per annum. Countries in sub-Saharan Africa already spend an average of 18.4 percent of their budgets on education—a higher proportion than in other regions—so it is unlikely that significant additional public funds will become available.

Complementary contributions from the private sector—both for-profit and nonprofit—are one part of the solution. The private sector already contributes significantly to education in sub-Saharan Africa, educating an estimated 21 percent of pupils, with this figure set to rise to 25 percent by 2021. Reaching this target will require some $16 billion to $18 billion in private education investment over the next five years.

The majority of the investment will be out of reach for traditional venture capital and private equity investors, because it will be in less formalized or consolidated sectors, or will require more risk-tolerant capital. There are, however, opportunities for impact investors, philanthropists, and entrepreneurs to drive innovation and generate impact.

Read the full article about Africa education by Danish Faruqui, Sudeep Laad, Mary Abdo, & Priyanka Thapar at Stanford Social Innovation Review