Most debates about global growth begin with a familiar set of characters: central bankers, bond traders, and policymakers. Classrooms rarely make an appearance. Yet the most important long-term driver of borrowing costs and economic performance is not monetary policy. It is education.
The argument is laid out in Charlie Robertson's book The Time Travelling Economist, which shows how literacy, electricity, and fertility form the tripod of development. The logic is simple enough to make an academic blush. Literate societies are more productive. Electrified societies industrialize. Smaller families save more. When households save more, banks lend more. As deposits rise, interest rates fall. Cheaper capital allows countries to build power grids and factories that push them further up the income ladder. Education stands at the beginning of this chain reaction.
The evidence is uncomfortable for anyone hoping for a quick fix. Countries with literacy rates above seventy percent have a realistic shot at industrialization. Those stuck below forty percent have almost no chance of sustainable growth. This is not ideology. It is a century of data. Africa's literacy map still mirrors the colonial legacy of the 1940s, and its economic fortunes mirror that map in turn. Fertility adds an extra twist. High fertility countries save far less and pay far more for capital. The result is interest rates that make infrastructure unaffordable, which then holds back export growth and income.
This macro story has a micro analogue. As documented in Irene Pritzker's book The School in the Market, IDP Foundation has spent the last eighteen years extending financing to low fee private schools in Ghana and the last three years in Kenya. These are schools that serve some of the poorest families but manage to deliver learning outcomes at a modest cost. They are also commercially viable. Local microfinance institutions (MFIs) see repayment rates above ninety-five percent across a large portfolio of thousands of loans. This not philanthropy, it is a living demonstration of a thriving and growing education financing market. Yet, despite clear evidence conventional investors and global capital markets have been slow to follow. DFIs refuse to invest in K-12 education.
It seems most investors haven't connected the dots between what happens in a classroom and what happens in their portfolio. They see education as social impact, not as a lever that influences liquidity, growth, and long-term returns. That mental silo is costing us all.
The next step is to scale this thesis. If keeping girls in schools lowers fertility and raises savings, then models that expand quality schooling are not simply good work, they are macroeconomic investments. They improve household balance sheets. They improve national ones too. And ministers of finance should be tracking the completion rates of secondary school as closely as the ministers of education and thinking about how to attract more private capital into their education sector.
Pritzker wants to see others adopt and scale what works. Her foundation has proven the model, de-risked it and demonstrated that impact and income can coexist. The IDP Foundation has unlocked $8m of debt investment through MFIs and has only served less than 10% of the current market demand. The challenge isn't about proving viability or demonstrating demand; it's about attracting more capital and convincing others to act.
Robertson's latest Africa macro-outlook highlights exactly why this matters now. Many African countries are approaching the demographic turning point where falling fertility will push up savings and lower interest rates. Egypt and Morocco are already there. Kenya and Ghana are not far behind. A modest improvement in education quality could accelerate that transition and move entire regions from subsistence to industry within a generation.
Education is often treated as a moral cause or a fiscal burden. It is neither. It is a financial tool hiding in plain sight. Anyone who wants to understand the world's future interest rate structure should look less often at the Federal Reserve and more often at the nearest school.
Authors: Irene Pritzker is the author of The School in the Market, 2026 and the Co-Founder of the IDP Foundation along with her daughter, Liesel Pritzker Simmons. Mrs. Pritzker is an education advocate and an innovative philanthropist championing replicable, local market- driven sustainable solution.
Charlie Robertson is the author of The Time-Traveling Economist, 2022 and the Chief Economic Advisor to Group CEO at Equity Bank (Kenya) Ltd. He has spent over 30 years analyzing emerging and frontier markets, with a particular focus on Africa and South Asia
