Low- to Mid-Fee Schools

November 2022

Indicative Return:

More than 25%

Investment Timeframe

Medium Term (5–10 years)

Ticket Size

Less than USD 500,000

Business Model Description

Establish or acquire and operate independent and cost-effective private school chains on the primary and secondary level targeting the growing middle class in the urban centres at a low- to mid-fee price level. The schools 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

Improve access, equity and quality in primary and secondary education especially for low- to middle-income households in urban centers.


Western, Central, Eastern

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

Average government spending for free education in Tanzania is USD 59 million per year. Private schools comprise of only 2% and 18% of the primary and secondary school students, respectively (10,11,12).

The number of primary and secondary school students is estimated at around 10,601,616 and 2,338,457 respectively. The transition rate from primary to secondary level is 17% meaning that 8,799,341 will be left out (19,31)

Indicative Return

More than 25%

Investment Timeframe

Medium Term (5–10 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 (34).

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 (16).

Ticket Size

Less than USD 500,000

Market Risks & Scale Obstacles

Market – Volatile

Sustainable Development Need

Tanzania’s free basic education system has resulted in primary education gross enrolment rates becoming universal, at 96.9%, with net enrolment standing at 84% and more than 70% of the primary school leavers transiting to secondary education. This has put pressure on the country’s public education system (21).

The population structure in Tanzania places a premium on the cost of education and other social services. By 2025, the system will have to cater for further 6.3 million pupils of which 4.7 million will be enrolled in basic education. There are increasing concerns about the quality of education and learning outcomes especially at basic education levels (21).

Expected Development Outcome

Low- to mid-fee schools present a cost-effective option for improving access and equity in education. Private schools can fill a supply gap given that there is demand to expand faster than public infrastructure can support (11).

Enhanced schooling increases the scope for youth to benefit from the transition underway in the economy and more specifically get skills demanded by the emerging sectors of the economy. Research has shown that those with post-secondary or university education earn approximately 40 times more than those without education, while completing primary education yields about four times the earnings of those with no schooling (35,36).

Primary SDGs addressed

Secondary SDGs addressed

Directly impacted stakeholders

People: Low- and middle-income households obtain access to quality and affordable education options.

Gender inequality and/or marginalization: Low-income and rural populations as well as female-headed households enjoy greater access to education.

Indirectly impacted stakeholders

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

Corporates: Secondary enterprises such as construction companies and SMEs can benefit from the rehabilitation and/ or construction of mid-fee schools and servicing them. with e.g., office supplies, energy, telecommunication services etc

Outcome Risks

If the private 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 teaching staff locally may necessitate outsourcing, which may increase operation costs and result in unaffordable service provision (11).

Impact Risks

If the private schools are inaccessible and unaffordable to students from low-income communities, only those already served by public schools may benefit and the expected impact may be limited.

Uncoordinated efforts in curriculum development may influence teachers’ reliance on the follow-repeat-and-memorize-methods, rather than problem-solving, which may obstruct the quality of learning and limit the expected impact (21).

A limited pool of qualified teaching staff locally may necessitate outsourcing, which may limit the resultant job opportunities for Tanzanians and reduce the expected impact.

Impact Classification

B—Benefit Stakeholders


Low- to mid-fee schools improve access, equity and quality in primary and secondary education.


Low- to middle-income households in urban centers obtain schooling options, and the education workforce gets access to job opportunities through low- to mid-fee schools.


While the low- to mid-fee schools model is proven, affordability for low-income communities, quality of service provision and availability of qualified teaching staff require consideration.

Impact Thesis

Improve access, equity and quality in primary and secondary education especially for low- to middle-income households in urban centers.

Policy Environment

Education and Training Policy (ETP), 2014: Provides statements that direct the transition to fee-free and compulsory basic education of 11 years, including one year of mandatory pre-primary education (18).

Education Sector Development Plan, 2016/17-2020/21: Presents Tanzania’s commitment to providing 12 years of free and compulsory basic education. Outlines the overall strategy for transforming the sector it into an efficient, effective and outcome-based system (19, 21).

Information and Communication Technology (ICT) Policy for Basic Education, 2007: Focuses on integrating of ICTs in pre-primary, primary, secondary and teacher education, as well as non-formal and adult education (20).

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 (36, 37)

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 (25).

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 (26).

Regulatory Environment

National Education Act, 2019: Guarantees compulsory primary education for every child who has reached the age of seven years. It stipulates that no child shall be refused enrolment in school and parents shall ensure that the child regularly attends primary school (22).

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 (23,37).

Education Act 10, 1995: In order to operate, independent private schools are required to pay an inspection fee of US$3) per student per year, as well as an examination fee of US$9 for each student in a grade where standardized examinations are administered (24,37).

Silverleaf Academy has built a network of high-quality, pre-school and primary schools affordable and accessible to children of the working poor and lower middle-income families across Tanzania. The academy has adapted the use of tablet technology, student-centered instruction, interactive videos and other tech-enabled means of improving children’s understanding (9).

FEZA schools are one of the contribution schemes of Ishik Foundation in education for Tanzania. The schools are established to give different colors to the world of education by delivering several concepts which maximize all potential and utilize them as educational and learning tools for students. FEZA schools firmly believe in the talents possessed students, and strive to nurture them (30)

Private sector

Silverleaf Academy FEZA Boys, Dar es salaam Independt School, St Francis Secondary Schools, Agakhan Schools, Dar es Salaam International Academy, St. Augustine Secondary School


Ministry of Education, Higher Education Accreditation Council, President’s Office Regional Administration and Local Government (PO-RALG), Tanzania Institute of Education, Agency for Development of Educational Management, Commission for Science and Technology (COSTEC),


World Bank Group (WBG), UNICEF, UNESCO.


HakiElimu, East Africa Youth Inclusion Project (EAYIP), , TWAWEZA, Tanzania Education Network/Mtandao wa Elimu Tanzania (TENMET), Tanzania Food For Education (TAFFED). CAMFED Tanzania, Born to Learn (BTL)

Public-Private Partnership

Higher Education Students’ Loans Board (HESLB)

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 – 2025/26
3) UNESCO, Empowering Adolescent Girls and Young Women through Education in Tanzania, 2016
4) United Republic of Tanzania, Engaging the Private Sector in Education, SABER Country Report, 2015
5) The World Bank, Tanzania Economic Update, 2021
6) (The British Council, Tanzania’s Next Generation Youth Voices, 2016
7) The British Council, Tanzania’s Next Generation Youth Voices, 2016
8) United Republic of Tanzania, Third National Five-Year Plan (FYDP 3), 2021 )

IOA Sources

9) http://www.silverleaf.co.tz/
10) East African Journal of Education and Social Sciences, Challenges on the Implementation of Free Education Policy in Tanzania: A Case of Public Primary Schools in Babati Town, 2020
11) World bank group, Low-Cost Private Schools in Tanzania, A Descriptive Analysis, 2020
12) UNICEF, Education Budget Brief, Mainland Tanzania, 2020
13) World Bank Group, Comparable Estimates of Returns to Schooling Around the World, 2014
14) FEZA Schools, https://fezaschools.org
“15) A cost-benefit analysis of female primary education as a means of reducing
HIV/AIDS in Tanzania”
16) World Bank, Trends in returns to schooling: why governments should invest more in people’s skills, 2016
17) FHI 380, National Education Profile 2018 Update
18) URT, The Education and Training Policy (ETP) of 2014
19) URT, Education Sector Development Plan (ESDP), 2008–17
20) URT Information and Communication Technology (ICT) Policy for Basic Education, 2007:
21) Education Sector Development Plan, 2016/17-2020/21
22) National Education Act, Chapter 353, PRINCIPAL LEGISLATION] 2019:
23) The National Education Act, 1978 (No. 25 of 1978)
24) Education Act 10 of 1995:
25) Global Partnership for Education, 2020
“26) EAC Investment Guide, United Republic of Tanzania Standard Incentives for Investors

27) Sustainable Development Goals Centre for Africa – Africa SDG Index and Dashboards Report, 2020
28) The Borgen Project, Everything to Know About Tanzania’s Improving Economy, 2018
30) https://fezaschools.org/achievements/
31) United Republic of Tanzania, Education Sector Performance Report 2018/2019
32) https://africaid.org/tanzanias-school-system-an-overview
33) The World Bank Group, Service Delivery Indicators for Tanzania, Education and Health, 2015
34) SparkSchools, South Africa (2020), Tuition & Fees
35) Africa Portal, Tanzania: Skills and Youth Employment. A Scoping Paper, 2015
“36)36 URT, Education Act of 1978”
37) Research on Improving Systems of Education, Low-Cost Private Schools in Tanzania: A Descriptive Analysis, 2020
38) URT, Education Sector Performance Report, 2018/2019