The year is 2040. In a dark corner of the room, a baby is sleeping. People haven’t seen one in a while — is it OK? Is it meant to make those sounds? What do you even feed this thing? And does anyone know where you can find a kid-friendly park instead of a dog park?
It may sound ridiculous, but a future in which having a baby is akin to getting an exotic pet isn’t impossible. Global birth trends are frightening and if AI development continues at its current rate, I’m not even sure what all the existing humans on Earth will do for a living, let alone any new ones.
For some this is dystopian, for others it is utopian. Either way, when you’re paying a high earnings multiple for a company, you need to think about what the world will look like in five and even 15 years from now. Forecasting is extremely difficult, but it’s certainly easier when there’s an observable trend.
Let’s start with me: I’m 37 and the proud dad of two excellent little people, but that makes me an outlier in my peer group. I have many friends who don’t have any kids, while others are content with just one. Only a few people I know have three children.
The stats show a clear drop in births in South Africa in recent years. If you ask your AI platform of choice to give you the stats for the past decade, you’ll see data is reliable for most of the years (there were a couple of issues during the pandemic with data collection). You’ll also see a clear and worrying trend: births per year in South Africa have dropped as much as 20% over the past decade.
I would love to see the data on private vs public hospital births, but this doesn’t seem to be reliably available. If you look at the listed hospital groups and read their recent reports though, you’ll see maternity cases have declined (and mental health cases are up). Again, if health-care groups are allocating capital away from maternity wards, that’s telling you something.
Could we see this trend change? In reality, it’s only becoming harder for Gen Z and younger millennials to fly the nest and build their own lives, not easier. Property affordability is a huge issue. That AI model that you asked about the birth rate is also causing havoc for employment of young people, as are South Africa’s employment laws that make business owners very nervous to add headcount.
The same affordability trends for young people that led to the crisis in mined diamonds (replaced by lab-grown diamonds) are playing out in the birth rate. Having children is extremely expensive, especially for middle-income South Africans who are taxed to death and then still need to pay for additional private sector services.
We now reach the biggest problem of all: the minimum expenses needed in a school. You need teachers and facilities
This brings us neatly to why this trend matters: private education. Curro has a big problem and the market is finally waking up to it, with the share price down 37% year to date. The latest update from the company reflects a decrease in weighted average pupil numbers of 1.4% in the six months to June 2025, leading to headline earnings guidance of between -3% and 2.7%. At the midpoint, that’s a slightly negative headline earnings move, an incredible outcome for what was once the growth darling on the JSE.
Normally, when a company is facing structurally lower demand, it cuts either capacity or costs. We now reach the biggest problem of all: the minimum expenses needed in a school. You need teachers and facilities, even if the school is running well below capacity. In fact, it’s those last few bums on seats that drive profitability, similar to how airlines work.
At the other end of this spectrum, we find tertiary education group Stadio boasting of headline earnings growth of between 22.8% and 32.7% in the latest period. In a world in which people are having to study further just to earn a decent living, making it harder to afford kids, tertiary education is a much better business model than primary education.
It’s hard to see how Curro stops this slide.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.