The cost of acquiring, managing, and maintaining ICT infrastructure is one of the main factors that hinder educational institutions in Sub-Saharan countries to adopt and implement eLearning. Recently, cloud computing has emerged as a new computing paradigm for delivering cost effective computing services that can be used to harness eLearning. However, the adoption of cloud computing in higher education in Sub-Saharan countries is very low. Although there are many factors that may influence educational institutions to adopt cloud services, cost effectiveness is often a key factor. Far too little is known on how much the use of cloud computing can be cost effective in delivering eLearning services. This paper compares the cost of hosting eLearning services between on-premise and cloud-hosted approaches in higher education, taking Tanzania as a case study. The study found that institutions can significantly reduce the cost of eLearning implementation by adopting a cloud-hosted approach. The findings of this study serve as a base for educational institutions seeking cost effective alternatives to implement eLearning in developing countries.