Leaving Future Africa to Make African Education Institutions Financially Resilient
When I joined Future Africa on June 1, 2021, I promised myself that I would only leave if I found a mission that either equalled or exceeded Future Africa’s. Because this was my benchmark, it was incomprehensible that I would ever leave. I saw myself at the firm for at least the next five years.
Yet, as it turns out, 14 months later, I found a mission that could not wait any longer. This is why it excites me, but it also saddens me to write that today is my last day with Future Africa. It has been a fantastic year and two months, filled with a lot of personal and professional growth and, in the process, lifelong friendships. It will forever be a home to me.
I am leaving Future Africa to start a new company whose mission is to make education institutions across Africa financially resilient and sustainable for centuries. We intend to do this by helping them generate alternative revenue from underutilised assets and investing it long-term.
Steve Jobs famously noted that you could not connect the dots looking forward, and I strongly agree. Because how I arrived at Steward is precisely a case study of that. Therefore, to appreciate how we arrived at that mission, I will connect the dots for you looking backwards by sharing the genesis and evolution of the idea.
In May 2022, I convinced my dear friend and boss, Iyinoluwa “E” Aboyeji, to make his maiden trip to Uganda. During the journey, he insisted on visiting where I come from, including my village and the primary school. My father, who passed away when I was one, with two of his friends, co-founded the school called Budhwege Primary School, which I attended for all seven years of primary. That is why I am very connected to it.
I have visited the school multiple times, but the visit with E left me different. I noticed that the school was deteriorating, with the classrooms rundown due to a lack of proper renovation. I decided to visit again to learn more from the school administration and see how I could help.
I also asked to interact with the top student in the P7 class and learnt that he wasn’t getting a first grade. This was very concerning partly because I was also the best in my class in the same school and did not get a first grade, not because I was dumber than those who got it in better schools. I just had limited resources, similar to him.
As anticipated, the teachers informed me that Tony, the best student in P7, could not afford to attend classes consistently because he does not have tuition of UGX 50,000, which translates to around $15 per term. That is not even $50 per year per student.
This particular story was touching and concerning because I am a product of the exact environment and know how many brilliant kids dropped out because they could not afford to pay tuition fees, the equivalent of a month’s Netflix subscription.
To put it into perspective, I was the only person from my primary class that made it past the first level of high school (S4). And, of course, the only one that reached university. All this was possible because I got lucky when a generous relative took it upon themselves to get me to a more decent high school.
Steward’s mission is to make education institutions across Africa financially resilient and sustainable for centuries.
Therefore, I decided to figure out how to help the school and the student, and part of what I did included giving them a quick stipend, paying the $30 for the remainder of the year and promising $500 to the teachers for each first grade they get from the national exams.
Except, I could not stop thinking about my school and how I could help them become financially resilient and sustainable forever. This went on for weeks, and my initial thought was to fix $100,000 somewhere (maybe in bonds or similar assets) that could pay off a predictable 10% to 15% in interest every year. For a school of fewer than 500 students, an extra $10,000 to $15,000 in income would make a lot of a difference.
But, the more I thought about the problem, my perspective broadened. I realised that the problem was not limited to my school. But the whole of Africa. There is a considerable gap between the quality of education delivered by the best and worst schools across the continent. Similarly, there is a massive gap between the quality of education delivered by the best schools in Africa and the world’s best. And the difference stems from how they all think about finances.
Education institutions with abundant financial resources can think long-term about talent development; those without can only afford to exist. Globally, the best education institutions are financial institutions. They can invest in the best-in-class learning materials, compensate the best teachers well, invest in groundbreaking research and facilities for co-curricular activities, and extend scholarships to students such as Tony and me. Think Harvard with $53 billion and Stanford with $23 billion in endowment funds. They can finance between 20% to 30% of their budgets through less than 5% of their endowment's liqudiation.
The focus thus shifted from how to help Budhwege Primary School to how we ensure that the institutions charged with developing Africa’s talent are financially resilient and sustainable for centuries.
At the beginning of July, I decided to dig deeper and do some research; what I found was surprising and transformational. Schools have no idea how to finance themselves outside of tuition fees and government grants. But the latter is unpredictable and slowly decreasing. For example, the Kenya government plans to allocate 21.3% less funding in the new financial year to the University of Nairobi. This follows after the Kenyan government cut funding to universities by 26% in 2020.
As government support for education reduces, institutions are forced to keep raising the tuition fees to stay afloat. Even when the quality of education is deteriorating in some instances, tuition fees have increased more than 100% for most of the continent over the last decade.
To deliver a consistent quality education that evolves with the changing times and needs, education institutions must diversify their revenue sources and invest for the future to give them the freedom to experiment. The starting point is to generate alternative revenue from underutilised assets such as alumni, real estate and property, then channel it via a professionally managed endowment fund.
At Steward, our mission is to offer educational institutions the tools and resources they need to do precisely this and more. I am glad I have teamed up again with my dear friend Henry, with whom we built Digest Africa, to now build Steward.
Because alumni donations have proven to finance education institutions sustainably, we are starting by giving schools the necessary tools to build an engaged alumni community. This will result in more recurring contributions to various causes (including scholarships and endowment funds) and selling merchandise. More importantly, it’ll enable alumni to conduct commerce within themselves and hire from the alumni pool.
We are currently running a private beta test with a few schools but are keen on speaking to more. If you believe your school or alumni association can benefit from Steward, please email peter@joinsteward.com, and we will add you.
PS: I wrote this listening to Hear I Go Again by Whitesnake
