Shakespeare famously wrote, “All the world’s a stage, and all the men and women merely players.” If we follow his metaphor, it seems that in South Africa’s Covid-19 pandemic saga, featuring widespread economic and social inequality, we’ve arrived at Act Three: the moment in the classic narrative arc where the characters are meant to resolve “The Big Problem”.

While it is clear that no one factor (or actor) can single-handedly spur economic growth, the limiting nature of the lockdown has illuminated a number of historical investment voids. And these voids, if filled, could have a significant positive impact on both social and economic ills in the short and long term.

The gap that we’re suggesting should and could be filled – and fast – is investment in the early childhood development (ECD) sector.

“The children of any nation are its future. A country, a movement, a person that does not value its youth and children does not deserve its future.”  – Oliver Tambo

Creating an environment that enables strong foundations for its youngest citizens is quite possibly the most impactful long-term investment a country can make. Children who feel loved and protected, receive good healthcare and nutritious food, and who are given opportunities that spark their ability to learn, are able to build strong foundations for life.

South Africa has just more than seven million children under the age of six, most of whom live in households shackled by intergenerational poverty. By enabling these strong early foundations, we improve these children’s likelihood of breaking out of the poverty cycle – we give them a fighting chance at future school success, positive health outcomes, employment prospects and earning potential.

Children who regularly access a high-quality preschool programme for at least two years before school are more able to benefit from formal schooling, and perform better at school as a result. These gains are most pronounced for children from low-income households.

Research by economics Nobel laureate Prof James J. Heckman, “The Lifecycle Benefits of an Influential Early Childhood Program,” shows that high-quality birth-to-five programmes for disadvantaged children can deliver a 13% per year return on investment. 

And yet, according to 2019 data, the South African government invests more to keep someone in prison (R360 per day) than it does to contributing to a child’s attendance at an early learning programme (R17 per child per day.) This subsidy, only received by about 17% of eligible children, is not enough to cover the basic costs.

“Children are one-third of our population and all of our future.” – Select Panel for the Promotion of Child Health, 1981

On Monday 6 July 2020, the Gauteng High Court ruled that ECD services could reopen (after being closed as part of the national lockdown since March) as long as they met basic health and safety requirements.

Even with this reopening, the continued lack of access to quality ECD programmes exacerbates one of the country’s biggest challenges – inequality. 

The way the stage is set means that economic well-being is the main driver of early childhood outcomes. Put simply, poor children are lagging significantly behind their better-off peers even before they begin their formal schooling journey.

The World Bank suggests that young children may be among the most negatively impacted by Covid-19. The weakening of ECD and foundational learning could result in lower learning trajectories for a whole generation. We cannot blame the actors when they are given a terrible script. If education is supposed to be the “great equaliser”, opportunities for early learning need to be of high quality and easily accessible from as early as possible.

Beyond providing the inputs for critical cognitive and socio-emotional development, many ECD programmes offer feeding schemes. This ensures that millions of poor children are able to access their one nutritious meal for the day. Good early nutrition is a fundamental building block for brain development. Chronic malnutrition and the resultant stunting have large detrimental and multigenerational impacts. The World Bank estimates that the per capita income penalty from stunting is 9% – 10% of GDP.

As community-driven services, ECD programmes have an impact beyond the lives of the children attending them. In South Africa, these programmes employ thousands of people, mostly black African women, and enable caregivers to (return to) work. From a recent survey, it can be estimated that each ECD operator employs an average of six people. While precise numbers are unclear, conservatively ECD programmes employ 175,000 people in South Africa. This same survey notes that 93% of the nearly 4,000 respondents are unsure if their operations will be able to resume, putting tens of thousands more jobs at risk.

UNICEF identifies the intersection of ECD and women’s economic empowerment. Payment for employees at an ECD programme (although not market related) is an example of care work actually being compensated. This reproductive labour is largely taken for granted, but has immense implications on the human capital of our country. Similarly, access to affordable and convenient childcare enables increased female workplace participation. 

The costs of the economic disempowerment of women are high, especially in less developed economies. Gender lens investing is one impact priority that has taken off recently. And investment in the ECD sector offers a unique, proven opportunity to positively impact the lives of women.

“Unless someone like you cares a whole awful lot, nothing is going to get better. It’s not.” –  Dr. Seuss

As it currently stands, this Shakespearean saga looks set to be a tragedy. It’s time for a dramatic plot twist.

We need a boost in the production budget, a reimagined script and a host of new actors.

Let’s talk about the production purse. Allocating capital to the ECD sector should not be seen as the responsibility of government only. Nor should it be approached as a corporate handout, part of corporate social responsibility initiatives only, or as the realm of grantmaking for non-profits solely. ECD is a viable, potentially profitable investment opportunity.

Investment in ECD complements impact investing efforts that aim to decrease poverty, unemployment, crime and poor health outcomes. 

Investment in ECD determines the rate of return on all other investments made in the life of a child (and adult). 

In fact, lack of investment in ECD undermines investments made later in life. For example, massive spending on secondary and tertiary education is undermined when children are stunted by malnutrition or lack the desired cognitive abilities.

And why a reimagined script? We need to expand the language of ECD to ensure that we’re able to appeal to a wider audience in our efforts to increase the funding flow and to attract new actors.

Enter new actors: the private sector and investors need to take a more active role in the space. Similarly, entrepreneurs need to be supported to develop products and services that speak to the ECD market.

Some rising stars have taken the stage. Earlybird Educare@Work is a social enterprise building a network of high-quality ECD centres across the socioeconomic spectrum in South Africa. It taps into the trend of companies worldwide realising the retention, diversity and productivity gains of including workplace-based educare as part of their employee wellness packages. 

Workplace-based educare also offers all employees, across the income spectrum, access to the same high-quality programmes for their children, and encourages social integration.

Another actor to watch is GROW Educare Centres. GROW uses social franchising to establish excellent, high-quality ECD centres that are also financially sustainable businesses in disadvantaged communities. They provide women with a complete recipe for ECD success. This model significantly improves the educational outcomes for children under five, and ensures that the business owner can run a professional and sustainable business that pays teachers what they are worth.

From stage to TV: Ubongo, a social enterprise based in Tanzania, is Africa’s leading edutainment company. It creates fun, localised and multi-platform educational media that reach millions of families through accessible technologies. Ubongo’s programmes improve school readiness and learning outcomes for children, and also promote social and behavioural change for children, caregivers and educators. Like any show, it tracks viewership and listenership, conducts focus groups, collects user feedback and also does experimental research to rigorously evaluate effects. In South Africa, you can catch Ubongo’s shows on SABC 2.

“You can’t build a long-term future on short-term thinking.” – Billy Cox

The Covid-19 pandemic will continue to have social and economic impacts on South Africa. But the story is far from written; the ending not determined. We have the opportunity to change the narrative. And what’s best is that we know the winning formula. 

We need to develop resilient systems to support a thriving society, and investment in optimising the early lives of our youngest citizens needs to be a routine and systematised undertaking by multiple actors.

It’s time for ECD to take centre stage. DM/MC

Lyndsey Petro is a portfolio manager at Innovation Edge, a social impact investor focused on early childhood. Nicole Biondi is head of marketing and communications at Innovation Edge.