Private Sector Investment in Education and Training: A Case of Tertiary Education in Kenya

Abstract

This paper assesses the current status of private sector participation in education investment and makes policy recommendations. A cross-sectional research d esign was used in this study. An in-depth descriptive analysis of private sector investment in technical and university education in Kenya was carri ed out. A sampl e of 137 pri v ate terti a ry educati o n i n sti t uti o ns was surveyed i n 2003/ 04. K e y informants who responded to the questionnaire includ ed principals and senior managers of the sampled institutions. More than three quarters of private institutions of hi gher learning and less than a quarter of commercial colleg es are affiliated to oth er institutions eith er locally or abroad . Howev er majority of p r iv ate institutions were single-campus inst itutions with a considerable numb er starting their operations after 1990. Pri v ate i n vestment i n terti a ry i n sti t uti o ns has been i n creasi ng rapi dl y si nce 1990. In choosi n g the location, investors considered factors such as the catc hment area, accessibility, availability of facilities and infrastructure. Desp ite inv estment in ed ucation being a long -term in vestment, majority of private investors did not own the land on which business premises were located. This was mainly due to high cost of land in areas considered to be favourable for locating a priv ate institution, and unsupportive policy and legal framework. Most institutions offered soft courses that were female-dominated, as opposed to technical and engineering oriented courses. Foreign student enro lment was very low, though the country is a net importer of education with an estimated Ksh 25 billion being spent annually by Kenyan students abroad. Sole proprietorship, partnerships and religious or ganizations were the main investors in private education. Data available was not comprehensive and accurate enough for the calculation of net present value and internal rate of return that would have enabled a comp arison of alternative invest ment choices. However, a rapi d i n crease i n the number of pri v ate terti a ry i n sti t uti o ns i n the 1990s and af ter year 2000, and prevailing optimism on future inv estment climate by key players sugg est that private investment in tertiary education is profitable. Th e study identified barriers to entry into private education investment to include poor investment incentives, inadequate access to credit, access to land, inadequate infrastructure, and reg ulations for setting up a p r iv ate institution. In order to enhance private sector investment in tertiary education, the legal and regulatory regime should be reviewed with a view to spelling out the role of public-private partnerships in education development and making the registration process more e fficient. Private sector participation in statutory bodies that deal with various aspects of education and training is important for them to be able to play their rightful role in education investment and also to encourage fair practices in the governance of education and training.