Experts urge private schools to unlock new revenue beyond school fees

DAR ES SALAAM: Private school owners in Tanzania have been urged to reduce their reliance on tuition fees as their primary source of income and instead develop diversified revenue streams to strengthen financial sustainability and long-term growth.

The advice comes as education institutions continue operating in an increasingly dynamic economic environment, where rising operational costs, fluctuating enrolment and tighter access to affordable financing are placing pressure on school finances.

Speaking in Dar es Salaam on Friday, SSC Group Chief Executive Officer Salum Awadh said schools that establish multiple income-generating activities are better positioned to remain financially stable and expand their operations.

His remarks come ahead of a specialised training programme scheduled for July 9 in Dar es Salaam, bringing together private school owners, investors, board members, finance managers and school administrators to discuss strategies for building financially sustainable learning institutions.

Awadh said the traditional model of depending almost entirely on tuition fees is becoming increasingly difficult to sustain.

“School owners need to think beyond tuition fees and develop additional sources of income to support their institutions. Relying solely on school fees is no longer the most sustainable approach. They should also explore financing options that can support growth and expansion, including venture capital, capital markets, impact investors, angel investors and private credit,” he said.

According to Awadh, schools that diversify both their income sources and financing options are generally more resilient during periods of economic uncertainty. Additional revenue streams can help institutions meet operational expenses, invest in infrastructure, improve teaching facilities and continue providing quality education even when fee collections fluctuate.

He noted that the upcoming training is designed to help private schools strengthen their financial management and operate more sustainably while maintaining their educational mission.

Although many schools deliver quality education, Awadh said financial performance often remains a challenge because institutions lack structured business strategies and effective financial planning.

He explained that many schools struggle to generate consistent profits, manage cash flow efficiently and reduce dependence on costly borrowing.

The training aims to equip participants with practical tools for improving financial performance while helping them make informed investment and financing decisions.

As an advisory firm working with organisations across different sectors, SSC Capital has conducted assessments of several schools and learning institutions. Those studies, Awadh said, revealed recurring financial and operational challenges affecting many private education providers.

Among the common issues identified are weak cash flow management, limited access to affordable financing, inadequate long-term planning and an overreliance on tuition income.

These findings have reinforced the need for tailored financial solutions that address the unique business environment facing private schools.

“Our assessments show that many schools face similar business and financial challenges. This training is designed to provide practical solutions that participants can apply to strengthen their institutions and improve long-term profitability,” Awadh said.

The programme will focus on helping education leaders understand the financial aspects of running schools without losing sight of their core responsibility of delivering quality education.

Participants are expected to gain practical knowledge in evaluating the financial health of their institutions, identifying operational weaknesses and implementing strategies that improve efficiency and sustainability.

Among the key topics on the agenda are alternative financing options for schools, profitability diagnosis, common business challenges in the education sector, financial management strategies and case studies drawn from real-world experiences.

The sessions are intended to provide participants with practical insights rather than purely theoretical discussions, allowing school owners and managers to adapt successful business practices to their own institutions.

Financial experts increasingly argue that private schools should be managed with the same discipline applied to other businesses while preserving their educational purpose. Strong governance, sound financial planning and diversified revenue sources are widely regarded as essential ingredients for long-term institutional success.

Potential supplementary income streams for schools may include renting facilities during holidays, offering professional training programmes, establishing skills development centres, operating transport services, investing in educational technology and forming partnerships with private investors or development finance institutions.

At the same time, schools are being encouraged to strengthen budgeting, improve debt management and adopt long-term financial planning that supports sustainable expansion rather than relying on expensive short-term borrowing.

Diversifying financing sources can also enable schools to invest in modern infrastructure, digital learning technologies, laboratories, libraries and teacher development programmes, all of which contribute to improved educational outcomes.

The training reflects growing recognition that private education institutions must adapt to changing economic conditions by combining sound educational leadership with effective financial management.

For investors entering the education sector, understanding capital structures, financing mechanisms and profitability models is becoming increasingly important as competition within the private school market continues to grow.

Board members and finance managers also play an increasingly significant role in ensuring institutions remain financially healthy through effective governance, strategic oversight and prudent resource allocation.

SSC Capital says the programme is intended to support these stakeholders by providing practical knowledge that enables schools to strengthen their financial foundations while positioning themselves for future growth.

Operating across Tanzania and two other countries, SSC Capital provides advisory services spanning strategy development, asset management, mergers and acquisitions, capital raising, corporate finance, private equity and credit rating services.

Its experience across these sectors has informed the design of the upcoming training, which seeks to address the financial realities facing Tanzania’s private education sector.

As economic conditions continue to evolve, education experts increasingly agree that financial resilience is becoming just as important as academic excellence. Schools that successfully diversify their income, strengthen financial management and secure sustainable funding are likely to be better equipped to navigate future challenges while continuing to invest in quality education.

The July 9 training is expected to provide school owners, administrators and investors with practical strategies to help transform their institutions into financially sustainable organisations capable of supporting long-term growth and educational excellence.