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Helping Fountain Gate Academy to improve private education in Tanzania

Founded in 2007, Fountain Gate Academy started its activities with a nursery and primary school in Dar-es-Salam. As the founder, Japhet Makao saw an opportunity he introduced a day-care service as well.

GroFin’s intervention helped the school to improve its finance department by implementing appropriate accounting software and assisted in hiring qualified staff for the department. The management information system (MIS) for the school has improved in terms of pupil academic data including results, progress, and financial reporting. MIS for the academic records is now available on a centralised school database using the reliable school software package.

Since several parents had moved to Dodoma, Japhet seized the opportunity to start a new branch there. GroFin helped the entrepreneur to formalise the land ownership of the Dodoma campus. The school also managed to get the Certificate of Right of Occupancy at the Dodoma Campus in the name of Fountain Gate Academy. As part of GroFin’s business support, we helped the school improve its architectural dining drawing to be ready for the construction of a high-quality dining hall. GroFin also recommended putting up an ICT laboratory so that students can learn ICT at a young age.

Since COVID-19 struck, all schools had to close their doors, leaving Fountain Gate without revenues from March 2020 to July 2020. Japhet explains that most parents are still in arrears on the payments for the period though they are trying to ensure payment for the new terms is paid. Fountain Gate continued salary payments to the staff during the school closure which had a significant impact on its operating cash flow. With guidance from GroFin, Fountain Gate managed to reduce unnecessary operating expenses, freeze salary staff increment, establish all health recommended infrastructure for COVID-19 precaution before reopening of schools.

“My dream for the future is to establish a special talent school and expand Fountain Gate footprint to other regions of Morogoro and Arusha,” – Japhet Makao, Founder of Fountain Gate Academy

Realising the dreams of a fashionista entrepreneur in Tanzania

Binti Africa, a textile manufacturing business located in Dar es Salam, is specialised in corporate uniforms, African print attire, handbags, and other accessories. The business was incorporated in 2011 by fashionista entrepreneur, Johari Sadiq, and employs 15 people.

Johari approached GroFin in 2016 for working capital needs and to set a new factory with modern machinery.

“My dream is to become the leading supplier of uniforms to the private and government agencies. Also, to export the African attires to foreign markets and probably having my boutique stores in some of the fashion cities such as Johannesburg,” – Johari Sadiq, Owner of Binti Africa

GroFin’s business support to Binti Africa has been to ensure the business has a proper financial management system in place: Binti’s financial records, cash flow management and internal control have all improved by adopting the right accounting software. GroFin also assisted Binti to put in place a project management team for the construction of their workshop. The workshop is large enough now to accommodate the entire production process in an upmarket location. Besides, GroFin has ensured that Johari put in place a succession plan.

Finally, one of GroFin’s major interventions has been to assist Johari in getting a reliable supplier for a state-of-the-art machine and reliable fabric suppliers at a better price from India and Bangladesh. The new procured machine allows for quick finishing and better quality of uniforms and Binti can display a wider variety of collections. Johari has now started online sales for her African attires and is exploring new market segments (school uniforms) as per advice from her GroFin Tanzania Investment Manager to diversify the market and reduce concentration risks on the corporate uniform line.

All in all, Binti’s liquidity and cash flow have drastically improved, and the income base has widened because Johari is no longer dependant solely on tenders for corporate wear. She has machines that have fewer breakdowns and produce higher quality outputs, with fewer rejects, and more options.

Nevertheless, when COVID-19 struck, Binti Africa was severely affected just like any other small business in Tanzania. The impact of the pandemic on the business has caused severe liquidity problem and delay in the delivery of raw materials. Soon enough, Binti Africa could not meet its obligations towards its clients, causing the business to close the production department and provide compulsory leave to its employees.

To curb the impact of COVID-19 on the business, Binti started shifts to observe social distancing. Johari had to keep regular contact with her corporate clients as well as suppliers and add up freight cost to speed up the delivery of raw materials.

Former President Jakaya Kikwete visits Binti Africa Clothing Workshop

Former president Jakaya Kikwete has urged Tanzanians to support the local fashion industry and praised local fashion houses for producing high-quality clothing of international standards.

Mr Kikwete made these remarks during a recent visit to Binti Africa in February, the fashion house from which he has been buying his vintage African print shirts since his presidential tenure. Binti Africa specialises in the production of clothing from African textiles. It is the only fashion house styling the officials of the Tanzanian Government, with the current vice president of Tanzania, Honorable Samia Hassan Suluhu, among its clients.

Mr Kikwete was very impressed by Binti Africa’s workshop and the creativity and quality of its current designs. He congratulated Johari Sadiq, fashion designed and CEO, on being self-employed and for producing top-quality clothing which can compete in the global market.

Johari Sadiq, CEO of Binti Africa and GroFin Tanzania Entrepreneur

Johari Sadiq, CEO of Binti Africa and GroFin Tanzania Entrepreneur

Mrs Sadiq founded Binti Africa in 2009 at the age of only 23, but with no business background or experience in the fashion industry she struggled to access finance to grow the business. The ILO Women Entrepreneurs Survey 2014 revealed that 85% of women interviewed in Tanzania financed their start-ups from their own savings, mainly due to high interest rates and collateral requirements. It also indicated that access to business development services (BDS) is crucial for women entrepreneurs to strengthen their capacity to start, effectively manage and grow their business.

But Mrs Sadiq’s passion for fashion led her to persevere and 2016 she obtained the finance she needed to set up a modern factory from GroFin, a pioneering private development financial institution which specialises in financing and supporting small and growing businesses across Africa and the Middle East. GroFin provided Binti Africa with funding to acquire modern equipment and high-quality fabrics which enabled it to create the exquisite garments it has become known for.

“My advice to other women entrepreneurs is to never be afraid of failure. Massive failure leads to massive success. Take risks, be open to learning lessons and take criticism well. Believe in yourself, because what a man can do, a woman can do just as well,” Mrs Sadiq said about her journey as a women entrepreneur during an interview with GroFin last year.

Giving Tanzania women entrepreneurs their place in the sun

Impact Investing & Education–Learning to make a difference in Africa

Africa’s education story is waiting to be written, but whether it will be written by Africa’s children is a pressing question that haunts the emerging continent.

Consider this – Sub-Saharan Africa (SSA) still has 30 million children out of school, and tertiary education is suffering from severe capacity constraints. SSA is also the worst-performing region globally for educational quality and learning outcomes, with up to 40% of children not meeting basic learning outcomes in literacy and numeracy. Moreover, by 2035, the number of Africans joining the workforce (15–64) will exceed that of the rest of the world combined, but SSA’s education systems are not meeting workforce needs.

Sounds like a challenge for any government? It certainly is, and one that no government can possibly rise to. A report highlighting the key role that the private sector is poised to play in Africa’s education landscape then comes as a fitting response to this challenge, replete with a powerful foreword by Liberia’s President, Ellen Johnson Sirleaf.

This definitive report by Caerus Capital is aptly titled “The Business of Education in Africa”, focusing as it does on the contribution of the private sector and on how government can act as the steward of the whole education system.

“The Business of Education in Africa” paints the current landscape of private education in Sub-Saharan Africa, goes on to discuss how African governments can better engage with private education players, highlights opportunities for investing in private education in SSA and delves deep into case studies of interesting companies in education in SSA. It ends with case studies of the education market in South Africa, Nigeria, Kenya, Ethiopia, Senegal & Liberia that may well be some of the most comprehensive insights into the education markets of these key African economies as on date.

While Sustainable Development Goal (SDG) 4 mandates that governments have and must continue to commit to access to a free, quality education for children, statistics highlight that around one billion African children will need to be educated over the coming three decades. Keeping pace with this demand requires enormous investment in schools, universities, and other infrastructure; recruitment and training of teachers, school leaders, and support staff; and learning materials. Public education systems will struggle to keep up with this unprecedented increase in demand.

Private sector education is then key to unlock the potential of this vital sector, and meet the rising tide of demand that otherwise threatens to engulf the continent’s children in a sea of darkness.

The report notes that the private sector is already playing a significant role in SSA. While publicly reported data compiled by UNESCO indicates that the private sector has a share of 13.5% in the education sector across 15 countries, the report’s own surveys indicate that the actual share of private schooling might be 21% (or one in five pupils), and this number is only set to rise (to one in four) over the next five years.

However, this enormous opportunity comes with the significant challenge of financing private players in education, with the report identifying a private investment requirement of US$16–$18 billion over the next five years.

The report highlights that education makes for a compelling investment opportunity because it delivers wider benefits in the form of high individual, social, and economic returns, and investors & donors are consequently willing to secure lower financial returns, or even a purely social return on investment.

Impact investing that focuses on social returns over purely financial returns then comes to mind as a lasting solution to the financing woes of private sector schools. While impact investing is a nascent field and impact investors in Africa are few and far between, some stories of positive change in local communities are already being written.

Be it Kenya’s Nairobi International SchoolTanzania’s Daystar SchoolRwanda’s Highland SchoolGhana’s Firm Foundation or South Africa’s Zambesi Akademie, these small businesses hailing from across the African education landscape have one strong link that binds them all — GroFin.