The World Economic Forum estimates that 15 to 20 million young people will join the African workforce every year for the next two decades. The World Economic Forum estimates that 15 to 20 million young people will join the African workforce every year for the next two decades.
Investing in, growing and developing the education sector on the African content is more crucial than ever. Given the growth of the African population coupled with socio-economic challenges, exacerbated by the Covid-19 pandemic, it is critical to strengthen education systems to facilitate unimpeded participation of young people in the development of African countries.
The World Economic Forum estimates that 15 to 20 million young people will join the African workforce every year for the next two decades. By 2030, Africa will be home to more than a quarter of the world's population under 25, who will make up 60% of the continent’s total population.
“South Africa and the continent at large face a huge shortage of critical skills,” says Ben Pretorius, Head: Education Sector at Standard Bank. “At the same time, the continent has the fastest growing youth population in the world that could close such gaps. There are however key challenges and obstacles to accessing decent, quality education that urgently need to be addressed if we want to drive sustainable and inclusive economic growth.”
“If we want to fulfil this growth, we must look at how we can be a source of assistance and support for our youth. Irrespective of whether they work for Standard Bank. If we, as an organisation, want to thrive and grow into the future, and if our continent is to survive and take its place on the world stage, the growing youth population must be given access to educational opportunities.”
Standard Bank is focusing on adding value to key sectors, and the ecosystems that exist within them, that it believes hold the potential to support economic development and reduce inequality and poverty. One such sector is Education.
In July 2020, Standard Bank became the first bank on the continent to launch an in-house education department that supports seven core education and skills development areas including; Early childhood development, Community Education training, training in schools, TVETs, Higher education as well as SETAs as it looks to contribute to enabling access to inclusive, quality education and learning opportunities, and to help Africa harness the opportunities of the fourth and fifth industrial revolutions.
“The strategic intention behind the focus on this sector of the economy is twofold: to improve the overall landscape of education in communities and to pursue commercial opportunities. Education gets considerable fiscal support from the public purse, receiving 19.53% of the national budget allocation in 2020, according to the World Bank collection of development indicators. That said, if we are not playing a part in this sector, you are missing out on activity in the country.”
Pretorius explains that the bank has taken a holistic approach to driving the education sector to ensure a lasting and sustainable impact, which is aligned to several of the United Nations Sustainable Development Goals and the National Development Plan’s vision of eliminating poverty and reducing inequality by the year 2030.
Pretorius says that the bank has undertaken extensive research to understand key personas and urgent needs in the sector, which, he says, has informed the development of initiatives and propositions that will best support the sector. For example, the bank introduced a credit facility that will allow schools, universities and TVET colleges to leverage off the strength of the bank’s balance sheet to fund infrastructure-related projects, fleets and movable assets.
In recognition of the funding challenge that continues to hinder young people from accessing education, particularly those who fall into what is defined as the ‘missing middle’ cohort, Standard Bank established the Feenix crowdfunding platform, which lets students find funding for their studies. Since launching in 2017, FEENIX has raised R117 million through the platform, which has gone towards funding the studies of more than 2 500 students.
According to a report released by Statistics South Africa, about 51% of SA youth between the ages of 18 to 24 do not have the financial means to pay for their tertiary education. Without the financial means to pay for tuition, students must rely on funding initiatives to pursue their higher education. While credit facilities and loans are available to cover the cost of tertiary education fees and other associated costs, they often require someone to stand surety for the debt.
In response, and as part of its efforts to widen access to education, Standard Bank was first on the continent to launch an unsecured Student Loan Fund, for students that don't have surety, or any kind of collateral, so that they can enroll in courses across the fields of health sciences, law, agriculture, and management and business. Through this facility, qualifying students can get unsecured loans of up to R120 000 a year to cover tuition fees, accommodation, learning materials and other living expenses.
Through its research, the bank has also decided to pursue educational initiatives in the areas of financial literacy and entrepreneurship. In doing so, the bank hopes to achieve improved levels of financial literacy in the country, where poor financial literacy hampers people’s ability to save and invest, while, at the same time, stimulating entrepreneurship. This focus, Pretorius says, is designed to unlock sustainable economic growth.
Standard Bank has teamed up with local Fintech company , that facilitates a financial literacy programme that covers everything from navigating financial markets to personal finance, which it is currently running pilots on and hopes to introduce into the curriculum’s of schools and universities. At the same time, the bank is supporting an entrepreneurial programme in partnership with Universities of South Africa (USAf), which represents all 26 public universities, that is currently being rolled out at 10 of these higher education institutions in 2022 and more to come in 2023 and 2024.
Pretorius says that the bank firmly believes in supporting entrepreneurial-focused education programmes because ultimately, they will breed entrepreneurs that, in the long run, Standard Bank can potentially fund and enable the growth of their future businesses and ultimately the economy.
“Our focus as Africa’s largest financial services organisation in Africa by assets is to support economic growth on the continent. This is being achieved by going beyond traditional banking and partnering with financial and non-financial players to develop initiatives and offer solutions that will assist Africa’s people to access quality education and opportunities for life-long education and training, enabling them to acquire the knowledge and skills needed to thrive in an increasingly digitised world.”