Pri­vate ed­u­ca­tion can pro­vide qual­ity ed­u­ca­tion to the masses. The Swedish ex­am­ple shows us how.

Finweek English Edition - - FRONT PAGE - By Jo­han Fourie editorial@fin­ Jo­han Fourie is as­so­ciate pro­fes­sor in eco­nomics at Stel­len­bosch Univer­sity.

when I was an Eco­nomics stu­dent 12 years ago, the aca­demic lit­er­a­ture we read, by South Africa’s lead­ing eco­nomic thinkers and so­cial sci­en­tists, was lament­ing the poor per­for­mance of the then South African school sys­tem. There was lit­tle doubt that the qual­ity of the schools had to im­prove for the 80% South Africans who were still stuck, de­spite mas­sive trans­fers of re­sources to these schools, in a sys­tem crip­pled by apartheid-era poli­cies.

Fast for­ward to 2017. A gen­er­a­tion has now passed through the sys­tem, and there has been al­most no im­prove­ment. Of 100 grade 1 stu­dents that go to school, only 37 can hope to pass ma­tric. With teacher trade unions op­pos­ing poli­cies that might im­prove teacher qual­ity, our min­is­ter of ba­sic ed­u­ca­tion seems paral­ysed. Cor­rup­tion of­ten means that bud­gets are ei­ther un­spent or spent in­ef­fi­ciently.

There is an al­ter­na­tive. Over the past few years, pri­vate schools have be­come an al­ter­na­tive for mid­dle-in­come fam­i­lies want­ing a bet­ter fu­ture for their chil­dren. Take North­ern Acad­emy in Polokwane, run by the JSE-listed Curro Group. De­spite school fees that are around R21 000 a year, with a sim­i­lar amount for board­ing, the school has over 5 000 stu­dents, 111 class­rooms and 66 hos­tels. In the 2016 ma­tric ex­ams it was the top-per­form­ing in­de­pen­dent school in the prov­ince.

Curro now has schools across all prov­inces. In the past four years, its share price has tripled. Its profit mo­tive means it must sat­isfy its clients: if it per­forms poorly by em­ploy­ing un­der­qual­i­fied teach­ers, clients will go else­where. That is the mir­a­cle of the mar­ket sys­tem that Adam Smith iden­ti­fied: prof­its sig­nal that a firm is do­ing some­thing right. If prof­its fall, the firm bet­ter im­prove or it will go out of busi­ness. If prof­its rise, like Curro’s, other firms will no­tice and en­ter the mar­ket.

One fear is that Curro will mo­nop­o­lise the mar­ket, charg­ing fees that al­low them to earn mo­nop­oly prof­its. This is un­likely in the ed­u­ca­tion sec­tor, though, as there are few bar­ri­ers to en­try. Con­sider the SPARK schools, with tuition also around R21 000 per year, that have opened since 2013 in Gaut­eng and the Western Cape.

A sec­ond fear is that a well-run pri­vate school sys­tem will cre­ate fur­ther di­vi­sions in a coun­try char­ac­terised by high lev­els of in­equal­ity; those that are able to af­ford the high school fees of good ed­u­ca­tion vis-à-vis kids from poor households forced to at­tend poor-qual­ity public schools. This is likely to hap­pen if pri­vate schools are lim­ited to those that can af­ford them. But they need not be.

In Swe­den, where equal­ity of opportunity is al­most a re­li­gion, more than 10% of kids are en­rolled in pri­vate schools. A ma­jor ed­u­ca­tion re­form in 1992 al­lowed schools to re­ceive public fund­ing based on the num­ber of stu­dents en­rolled. Schools are not al­lowed to dis­crim­i­nate or re­quire ad­mis­sions ex­ams, or to charge par­ents ad­di­tional school fees. (They may ac­cept do­na­tions, of­ten used to ex­pand school facilities or of­fer fi­nan­cial sup­port for poor stu­dents.)

Any­one can start a for-profit school in Swe­den. Many of­fer an al­ter­na­tive cur­ricu­lum, or pro­vide a ser­vice to in­ter­na­tional, re­li­gious or lan­guage groups. Oth­ers are des­ig­nated sports or artis­tic schools. It is sim­ple: If a public school is not pro­vid­ing the ser­vices its com­mu­nity wants, an en­tre­pre­neur will iden­tify the gap and step in.

We need this in SA too. The 2017 Bud­get al­lo­cated R243bn (16% of our to­tal con­sol­i­dated spend­ing) to the de­part­ment of ba­sic ed­u­ca­tion. With 11.2m school-go­ing kids, that is slightly more than R21 000 a child.

What if ev­ery par­ent re­ceived a gov­ern­ment voucher of R21 000 per stu­dent to use at any school they want, public or pri­vate? A larger amount could be given to those liv­ing in ru­ral ar­eas or pre­vi­ously dis­ad­van­taged ar­eas. This em­pow­ers par­ents to choose the schools which they be­lieve will serve the in­ter­ests of their kids best.

There are con­cerns with pri­vate ed­u­ca­tion too, of course. One wants to en­sure facilities are of good qual­ity, and teach­ers and cur­ric­ula meet cer­tain stan­dards. But the con­cerns pale in com­par­i­son to the atro­cious out­comes of the cur­rent school sys­tem, where facilities are of­ten non-ex­is­tent and teach­ers un­qual­i­fied.

Imag­ine the op­por­tu­ni­ties this will cre­ate for en­trepreneurs. A com­mu­nity leader in an area with poor public schools can take the ini­tia­tive, ap­point ed­u­ca­tors from within the com­mu­nity and use the vouch­ers to pay their salaries. Imag­ine Cricket South Africa (CSA) part­ner­ing with an en­tre­pre­neur to build a chain of elite cricket schools, with CSA pro­vid­ing the facilities and coaches and the vouch­ers pay­ing for high­qual­ity ed­u­ca­tion.

Im­por­tant re­search lit­er­a­ture sug­gests that mother-tongue ed­u­ca­tion is crit­i­cal for stu­dent suc­cess: with a voucher sys­tem, if there is a de­mand for sec­ondary ed­u­ca­tion in Se­sotho in a spe­cific com­mu­nity, ex­pect an en­tre­pre­neur to spot the gap. Pri­vate school chains will have an in­cen­tive to train their own teach­ers, ei­ther on the job or by in­vest­ing in teacher train­ing col­leges.

We need a new plan for ed­u­ca­tion. I’d hate to see my col­leagues 12 years from now write pa­pers still lament­ing the poor state of our ed­u­ca­tion sys­tem. We keep throw­ing money at a prob­lem that can­not be fixed by money alone. The Ba­sic Ed­u­ca­tion bud­get grew 7.3% in 2017. If we con­tinue do­ing this, we are likely to fail a sec­ond post-apartheid gen­er­a­tion.

If a public school is not pro­vid­ing the ser­vices its com­mu­nity wants, an en­tre­pre­neur will iden­tify the gap and step in.

SPARK Ryn­field, in Benoni, east of Jo­han­nes­burg, opened in Jan­uary 2016 and is the sev­enth school in the SPARK Schools net­work.

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