Affordable Day Care Centers

November 2022

Indicative Return:

More than 25%

Investment Timeframe

Short Term (0–5 years)

Ticket Size

Less than USD 500,000

Business Model Description

Establish or acquire and operate day care centers providing quality and affordable childhood education to low- to mid-income communities unable to afford high-end day care facilities currently available. The centers either run as commercial entities where a private actor owns and operates the entity or via a public-private partnerships where the entity is government-owned but managed and operated by the private sector. For the latter case, the government provides the necessary infrastructure, such as repurposing abandoned and / or underutilized buildings and renting them to users.

Expected Impact

Enhance accessibility and affordability to quality pre-primary education and care for low- and middle-income communities.


Lake, Northern, Central, Eastern, Southern Highlands

Education > Formal Education

Direct Impact SDGs:

Indirect Impact SDGs:


Development need: Significant progress has been made in expanding free primary education in Tanzania, raising primary and secondary enrolment rates and increasing investment in higher education. However, Tanzania’s Human Capital Index (HCI) remains well below the average of low and low middle income countries. Access to education is highly unequal, and a lack of qualified teachers undermines learning outcomes (1).

Policy priority: The government is committed to develop and maintain a skilled and competitive workforce through: increasing enrolment of age-appropriate children; construction of classrooms and teacher allocation to keep pace with the rapid increase and incorporate STI and digital learning and teaching (2,8,21)

Gender inequalities and marginalization issues: The ratio in primary and lower secondary schools for girls to boys is about 1:1, while in upper secondary and higher education it is 1:2. This shows a decreasing trend for the progression of girls from one level to the other. Although drop out affects both boys and girls, girls have a greater possibility for leaving school prematurely (3).

Investment opportunities introduction: Tanzania has one of the world’s fastest growing young people’s population. Of the estimated 60 million people, more than 50% are under 18 and over 70% are under 30. Tanzania requires means of educating these large numbers of young people, which offers engagement opportunities (6, 7).

Key bottlenecks introduction: Despite important gains in primary enrolment, learning outcomes remain broadly unchanged. The distribution of educational opportunities is highly unequal, and a lack of qualified teachers undermines education quality (5).

Formal Education

Development need: Tanzania made primary education free in 2002, and has since nearly achieved universal primary education. The shift now is into secondary education. However, Tanzania still faces some issues such as the shortage of teachers and classrooms, as well as inequality in access to educational services (1,4, 12).

Policy priority: Tanzania has put in place policies to promote diversity of supply for independent private schools. Individuals, private organizations, and non-government organizations are legally permitted to own and operate private schools. These can be community, not-for-profit, faith based or for-profit providers (4).

Investment opportunities introduction:The expanding middle class, representing 10% of the population and growing at a steady rate, offers significant demand for quality education in line with international standards, life skill development, education infrastructure and learning tools, including digital technology and education IT solutions (8,35).

Key bottlenecks introduction: Significant progress has been made in expanding free primary education, raising primary and secondary enrollment rates, and increasing investment in higher education. However, Tanzania’s Human Capital Index (HCI) remains well below the LMIC average. Access to education is highly unequal, and a lack of qualified teachers undermines learning outcomes (1).

Market Size and Environment
Critical IOA Unit

As of 2021, Tanzania had 1,738,843 students enrolled in pre-primary schools. About 5% of these (86,942 students) are enrolled in private schools. The actual per unit cost for financing pre-primary education is around USD 25 per month, which is equivalent to USD 300 per year and approximates to a market opportunity of USD 26 million per year (4, 15).

Pre-primary enrolment has increased in absolute terms from 1,034,729 pupils in 2012 to 1,562,770 in 2016 and was projected to grow to 1,738,843 students by 2021 (15). The country’s rapid urbanization and growing middle class offers increased demand for day care services (18).

Indicative Return

More than 25%

Investment Timeframe

Short Term (0–5 years)

(Short to medium term) – Private school investments are likely to produce a cash-flow in the short to medium term depending on the quality and the speed of the marketing/branding process to attract pupils (36).

The global private rate of return to schooling is 10% for every year of schooling. This recent estimates comes from data from 139 economies. The returns are highest in Sub-Saharan Africa, including Tanzania besides South Africa and Ethiopia (39).

Ticket Size

Less than USD 500,000

Market Risks & Scale Obstacles

Business – Business Model Unproven

Business – Supply Chain Constraints

Market – High Level of Competition

Sustainable Development Need

The net enrolment for pre-primary education is estimated to have reached 44.6% in Tanzania, which is one of the highest in Sub-Saharan Africa. With 95% of pre-primary students enrolled in public school, the public system faces capacity pressures, and low enrolment of age-appropriate children, leading to some children entering Standard I without having passed through pre-primary (9, 21).
Pre-primary enrolment has grown from 1,562,770 in 2016 to 1,738,843 in 2021 at an estimated growth rate of 2% annually, resulting in an increase of the average number of students per teacher from 112 to 135, which compromises quality education delivery and results in a lack of appropriate learning infrastructure (21).

Expected Development Outcome

Affordable day care centers reduce the pressure on available pre-school institutions and increase the enrolment rate for pre-primary schools. They offer quality care and education through specialized teachers, which meets and exceeds the recommendations of the National Pre-Primary Curriculum (22).
Early child education lays the foundation for promoting a well educated and learning society. The early childhood period plays a critical role in a child’s life, since any developmental and growth domain gaps at this time can have a lifelong impact, restricting children’s ability to realise their full potential later on in their lives (15, 16).

Primary SDGs addressed

Secondary SDGs addressed

Directly impacted stakeholders

People: Low-income families enjoy pre-primary education services, which supports the development of the children and offers new economic and social opportunities to the parents.
Gender inequality and/or marginalization: Women, particularly female headed households enjoy greater opportunities to pursue income generating opportunities while their children are in pre-primary education institutions

Corporates: Educational and pedagogical service providers and partners access new market opportunities.
Public sector: The government benefits from additional options to provide pre-primary education for children under the age of five years, and enhanced levels of healthy human capital development paths.

Indirectly impacted stakeholders

People: The general population benefits from higher levels of engaged youth and job opportunities in the private schools.

Gender inequality and/or marginalization: Women and urban poor communities as well as youth are able to secure employment opportunities in the schools (e.g security services, cleaning, catering, supply of equipment’s etc)

Corporates: Secondary enterprises (i.e., large companies and SMEs) can benefit from the construction of day care centers and servicing them with e.g., office supplies, energy and telecommunication services etc

Outcome Risks

If the pre-primary schools target primarily higher performing students and / or focus on students from higher-income households, leaving disadvantaged youths in the public system, they may exacerbate existing inequalities and draw away public education funds (11).

A limited pool of qualified pre-primary school teaching staff locally may necessitate outsourcing, which may increase operation costs and result in unaffordable service provision (11).

Impact Risks

If the day care centers are unaffordable to students from low-income communities or inaccessible to those outside of the urban hotspots, only those already served by public institutions may benefit and the expected impact may be limited (21).

If affordable day care centers are not complemented with other essential services, such as school transportation programme, to address accessibility issues for children living in hard-to-reach areas, the impact may be limited especially for marginalised communities (15).

A limited pool of qualified teaching staff may limit the resultant job opportunities for Tanzanians, and the lack of physical infrastructure available may not allow to serve communities at scale, which may reduce the expected impact (15).

Impact Classification

B—Benefit Stakeholders


Affordable day care centers provide quality pre-primary education and care to low- and middle-income communities.


Low- and middle-income communities in urban and rural areas, the early childhood education workforce and the public pre-primary education programmes benefit from affordable day care centers.


While the affordable day care center model is proven, affordability and accessibility as well as education staff and infrastructure availability require consideration.

Impact Thesis

Enhance accessibility and affordability to quality pre-primary education and care for low- and middle-income communities.

Policy Environment

Tanzania Development Vision, 2025: Seeks to transform the education system right from the pre-primary shool level so that it can develop the country’s human capital in tandem with socio-economic changes.(24).

Education and Training Policy, 2014: Stresses the importance of pre-primary and primary school education. It emphasises that pre-primary education is compulsory for a period of not less than one year in order to meet children’s needs (25).

Child Development Policy, 2008: Provides guidelines to the fulfilment of children‟s rights, welfare and development in Tanzania in terms of physical, mental and spiritual growth. The Policy was compiled in accordance to the International Convention on the Rights of the Child (CRC) (26)

Education Policy 1978: The policy describes the role of the private sector in primary and secondary education. The Policy also sets out a 14-point criteria upon which a school can be granted or denied registration (41, 42)

Financial Environment

Financial incentives: The Global Partnership for Education (GPE) offers grants totaling USD 112 million to build on Tanzania’s efforts to get more children in school. Investor will benefit from a special package for girls and children from disadvantaged backgrounds (31).

Fiscal incentives:Tanzania offers import duty and VAT exemption on deemed capital goods, including building materials, utility vehicles and equipment. Private schools are among the potential beneficiaries of the scheme (32).

Regulatory Environment

The Education Act of 1978: Allowed private sector to operate schools in Tanzania. It set conditions to be fulfilled. The policy affords private schools’ moderate levels of autonomy. They can set teacher salaries, deploy and dismiss teachers (subject only to labor laws) but they have to adhere to centralized requirements on teacher qualifications, class sizes, and pedagogy (41,42).

Law of the Child Act, 2009: Guarantees the child’s right to education, and stipulates that parents, legal guardians and those having custody of children have the duty to provide the child with the right to education and guidance (29).

Education Fund Act, 2001: Seeks to establish an Education Fund to improve access to and equality of education at all educational levels in Tanzania and Zanzibar (30).

The Aga Khan Nursery School located in Dar es Salaam aims at providing students with well-rounded education which allows them to discover and nurture their creativity and develop into independent critical thinkers. The school curriculum has been modified to ensure compatibility with the National Curriculum of Tanzania and the Tanzanian culture (10).

My World Preschool & Day Care Msasani has been created as an early childhood center of excellence in Dar es Salaam. It ties together experience in child development and progressive play-based learning.
The child adult ratio is 16:5 for the 1.5-3 years class and 16:4 for the 3-6 years classes (11).

Private sector

Aga Khan Nursery School (run by the Agakhan Foundation)

Haki Elimu

My World Preschool & Day Care Msasani

Alnegar daycare & Nursery school

Happy Kids Puzzles

Chameleons Pre-School

Active Tots Zone – Pre School & Day Care


Ministry of Education, Science and Technology (MoEST)

Tanzania Institute of Education (TIE)

Tanzania Teachers’ Union (TTU).



Global Partners for Education (GPE).


Swedish International Development Cooperation Agency (SIDA)

Tanzania Early Childhood Development Network (TECDEN)

Children in Crossfire (CiC).

Public-Private Partnership

Not available

Sector & Subsector Sources

1) World Bank, Tanzania Economic Update, 2021 – Raising the Bar for Achieving Tanzania’s Development Vision

2) United Republic of Tanzania, National Skills Development Strategy 2016/17 – 2025/263) University of Dodoma, Early childhood education in Tanzania: Views and beliefs of stakeholders on its status and development, 2020

4) University of Dar es Salaam, School of Education, Analysis of the Unit Costs of the Government’s Provision of Pre-Primary Education in Tanzania, 2014

5) The World Bank, Tanzania Economic Update, 2021
6) UNICEF, Young People Engagement: A priority for Tanzania, 2018)
7)The British Council, Tanzania’s Next Generation Youth Voices, 2016
8) United Republic of Tanzania, Third National Five-Year Plan (FYDP 3), 2021
9) Ignasia Mligo, Enhancing Young Children’s Access to Early Childhood Education and Care in Tanzania, 2018

IOA Sources

  • 10) Aga Khan Schools, 2022.
  • 11) My World Pre Schools, 2022.
  • 12) Julia Faria, 2020. Number of Primary Schools in Tanzania.
  • 13) World Bank Group, 2014. Comparable Estimates of Returns to Schooling Around the World.
  • 14) Fursa Kwa Watoto, 2008. Financing Pre-Primary Education in Tanzania.
  • 15) United Nations Children Fund, 2020. Education Budget Brief, Mainland Tanzania.
  • 16) Education International (IE) and Tanzanian Teachers’ Union (TTU), 2017. Situation analysis and baseline study on early childhood education in Tanzania mainland, Final Report.
  • 17) World Bank’s Systems Approach for Better Education Results (SABER), 2015. Engaging the Private Sector in Education, Country Report.
  • 18) Statista, 2022.
  • 19) Open University of Tanzania, 2013. Delivery of Early Childhood Education in Urban Areas of Tanzania: A Case of Ilala Municipality in Dar es Salaam.
  • 20) World Bank, 2016. Trends in returns to schooling: why governments should invest more in people’s skills.
  • 21) Bernard van Leer Foundation, 2001. Early Childhood Care and Development in Tanzania. 22) The Open University of Tanzania, 2013. Delivery of Early Childhood Education in Urban Areas of Tanzania: A Case of Ilala Municipality in Dar es Salaam.
  • 23) World Bank Group, 2020. Low-Cost Private Schools in Tanzania. A Descriptive Analysis.
  • 24) United Republic of Tanzania. 2020. Tanzania Development Vision 2025.
  • 25) United Republic of Tanzania, 2014. Education and Training Policy.
  • 26) United Republic of Tanzania, 2008. Child Development Policy.
  • 27) Sustainable Development Goals Centre for Africa, 2020. Africa SDG Index and Dashboards Report.
  • 28) United Republic of Tanzania, 1977. The Constitution.
  • 29) United Republic of Tanzania, 2009. Law of the Child Act.
  • 30) United Republic of Tanzania, 2001. Education Fund Act.
  • 31) Global Partnership for Education, 2020.
  • 32) United Republic of Tanzania, 2022. Standard Incentives for Investors.
  • 33) UNSTAT Hub, 2022.
  • 34) United Republic of Tanzania, 2016. Education Sector Development Plan.
  • 35) The Borgen Project, 2018. Everything to Know About Tanzania’s Improving Economy.