Funding Public Education in Nigeria: Towards an Alternative Financing Model

Professor Tunji Olaopa

By Tunji Olaopa

Everyone is still reeling from the multidimensional effects and consequences of the eight-month industrial actions embarked upon by the Academic Staff Union of Universities (ASUU). Even though the industrial action has been suspended, the non-abating face-off between the federal government and ASUU has once again brought to the front burner critical issues about the role of education in the total governance calculations of the Nigerian government; and specifically, how we can begin to think about the funding of education in Nigeria. For eight months, the public sphere has been set alight by several discussions on ASUU and the strike option, the intransigence of the federal government, the relationship between education and human capital development. There have also been a lot of agitation about the effect of the long-drawn out face-off on the emotional balance of those involved, especially the students; as well as the larger import of determining the patriotic quotient that will help rally efforts in building Nigeria.

I bring to this conversation, my fond experience as deputy director and head, policy division of the Federal Ministry of Education and national coordinator, education sector analysis/strategy program for Nigeria from 1999 to 2002; and lately, in 2021, chairman, technical working group (TWG) set up by the Federal Ministry of Finance, Budget and Planning that developed the Education and Human Capital Development component of the current national development plan, post-ERGP being currently elaborated into a perspective plan (2023-2060). In the UNESCO Education for All Report (2000-2015) titled the “Dakar Framework for Action,” which I had the fortune of participating in as a Nigerian Delegate, the World Education Forum recommended that six percent of a country’s GNP should be voted for education, while between 15% and 20% (which the popular press put at 26%) becomes a fundamental threshold for national government to earmark for the funding of education. This is in line with the Framework’s declaration that the major challenge facing education, especially in sub-Saharan Africa, is the failure of governments to give education priority in their national budgets. Unfortunately, in the last six years Nigeria’s budgetary allocation to education has not risen anywhere close to 10%. And so, in the World Education Forum ranking for 2022 involving 140 countries, Nigeria is missing in the top ten African countries—Seychelles, Tunisia, Mauritius, South Africa, Algeria, Botswana, Kenya, Cape Verde, Egypt, and Namibia in that order. Seychelles is the only country in Africa to achieve the UNESCO EFA goals, with 69.3 points that placed it at 43rd position out of 140 countries.

Crisis State of Nigeria’s Education Sector

The entry point for this conversation for me is a situation analysis of the crisis of the education sector in Nigeria. Whereas private schools and universities are bridging gaps in terms of access and quality, the cost of private education is prohibitive to majority of applicants (with only 1% of eligible candidates catered for), thus putting a disproportionate demand on public education institutions. Poor learning environment with dilapidated infrastructure in classroom/lecture rooms, often overcrowded and overstretched, made worse by poor maintenance provision and culture. Science-based facilities are running ‘dry lab’ for lack of reagents and tools to conduct physical/real experiments, as laboratories and workshops are old with inappropriate furnishing and consumables absent in most

Deterioration of hostel facilities due to overcrowding, overstretched lavatory, kitchenets and poor sanitation. Overall, public education institutions face an existential crisis; a situation where public schools and colleges are failing by every parameter: content, curriculum and pedagogy; infrastructure/technology for learning/school management; funding and sustainability; quality assurance; teacher professionalism and teacher education; certification, relevance and employability.

And in terms of the economics and required investment in education, Nigeria will require significant investment in the sector if it is to meet the requirement of access and quality education that will power a diversified, growing, inclusive, sustainable, globally competitive strong economy, and serve as a knowledge hub to the country. With the current country’s expenditure on education far less than the 15-20% or the speculated 26% by UNESCO, the government need to back up its stated prioritization of education sector with requisite funding, at that, in keeping with the constitutional mandate to provide quality education as a right of the Nigerian child. In addressing the issues of access and equity, Nigeria needs to implement strategies that exponentially grow it carrying capacity at all levels, expanding its impact, especially in terms of enrolment in Basic Education where the private sector has closed gaps over the years often in the process excluding many through tuition. TVET need to be repositioned given its potentials to productively engage the largest segment of the ‘youth bulge’

Across board, rehabilitation and/or construction of new facilities in schools is needed to create a conducive, secure and healthy environment for learning, and respond to the demands of post-Covide-19 new normal. Even where education budgets are increased, the trend in which the recurrent component captures 60-70% of expenditure, does not allow for requisite investment in education infrastructure and the soft contents. And so, since concerns that inspired the choice of this topic was inspired by my statement at an earlier event organized by this same association titled Rewriting the Fate of Public Schools: Old Students Associations to the Rescue, it is only proper for me to restate my core arguments in that submission, if only to create a context for its iteration in current conversation.

In that statement, I had observed that,i) resuscitating the education sector requires a framework of creative innovation that supersedes the attention often given to the urgent need to increase budgetary allocation; ii)that beyond the resolution of the education funding challenge, the state needs to depoliticize education reform in general, through the institution of a technical-rational approach to education policy making and problem-solving in Nigeria; iii) education requires far more sophisticated governance, leadership and managerial models and acumen in engagements by governments and education administrators with stakeholders, to pursue education funding and governance models that draw significant buy-in to assist in connecting budgeted resources to other alternative investment sources and availabilities for revitalizing the education sector.

And iv), there is a compelling need for old students associations to rethink the modus operandi they had worked with, in favor of a shift from hands-on/out approaches that focus predominantly on infrastructural development, so equal attention is paid to critical systemic and structural reengineering of public schools within a spirited concern for sustainability and impact of interventions; and v)at that, to ensure that old student associations interventions do not provide excuse for governments to abdicate responsibility. Also, so as to prevent non-sustainability of the efforts and reform fatigue that might arise from the same set of people being taxed, year in year out, in pursuing the challenging responsibility.

The option of returning old mission and popular schools to old original owners remain another self-justifying option to reinforce the option of public-private partnerships which has limitless alternative funding models. The point overall is that intervening in one’s alma mater cannot be a haphazard consideration done from the perspective of philanthropy. It must be structured in a synergistic manner to reinforce government projects in schools. It thus must be backstopped with strategic communication with government on the significance of shared responsibility in repositioning schools, with interest taken to focus also on soft issues that drive impact as; standard and quality assurance, teacher education, professionalism and capacity development, learning infrastructure and teaching aides, scholarship schemes, digitized library, sporting facilities, quiz and debates, value-shaping religious instructions and activities, and many more

Towards Alternative Funding for University and other Tertiary Education Institutions

ASUU has been consistent in its agitation for the revitalization of public universities, and the government’s commitment to education. However, it is high time that the belief about government’s capacity to fund education be subject to critical qualitative and quantitative analysis. My suspicion is that even if the federal government could achieve the 20% threshold commitment to education funding (which will be very hard to achieve given the huge national infrastructural gaps that must be bridged to create required incentives to grow the economy), the current rate of rot and decay in the educational framework of Nigeria, as well as the loss of overall efficiency, infrastructural leakages in public education institution, as well as pervasive corruption would not demonstrate any improvement. This requires a fundamental rethink, especially on government’s and ASUU’s fixation on a one-size-fit-all budgetary funding model.

There is no one that any longer doubt the fact that human capacity development requires a high-quality education. And such a qualitative education is not only expensive to get, it is also very capital intensive to fund. This is where both the federal government and ASUU require a rethinking of modalities. On the one hand, how possible is it to keep up the agitation for government to keep funding education within the tight and terrible global and national economic dynamics? It would seem disingenuous to keep insisting that tuition should not be paid at all to get quality higher education. And on the other hand, it is also time for the realization to sink in,with the clear fact that it is now next to impossible for the federal government to think it can solely finance public education outside of several creative alternatives that displace the government as the dominant stakeholder. We got to the shameful and protracted eight-month strike because both the government and ASUU refused to deconstruct the model of the government as the sole financier of education. And with that model, the World Education Forum just served us the rude consequence.

In the larger matter of governance in the state, the government has been forced to come to terms with the expansion of the governance space to allow for the timely and significant contributions of nonstate and nongovernmental forces and actors. And this is essentially because government recognized that it does not have the capacity to bite more than it can chew. The same logic is apposite in the case of the financing of public universities. It should be time now to revisit the autonomy clause in the understanding of universities in Nigeria.University autonomy demands that universities run their own affairs, with government contributing some percentage into a funding mix that is carefully calibrated into an education financing model. The idea of university autonomy also further speaks to other issues, namely, the categorization of university, funding alternatives, fund management, etc.

All across the world, and especially in the OECD countries, there is now a consensus on the need to expand the funding sources for higher education, with the government being just one out of the many sources of funding. It is also now accepted that those who benefit the most from education—those who receive it—should also bear at least some part of the cost. Thus, even though across the OECD education is publicly funded, the proportion of government expenditure allocated to funding from primary to tertiary level dropped between 2015 and 2019. This is because government yielded to a diversification of the funding sources. In 2019, for instance, an average of 59% funding for non-tertiary education came from the central government (with the rest decentralized), and 88% for tertiary education. And more than 31% of the transferred funding came from the private sector (and about 10% for non-tertiary education). And also, across the OECD in 2019, an average of 5% of the total fund for tertiary education is transferred to the private sector. And countries with the highest transfer of cost of funding also have high tuition. For instance, in Australia, United Kingdom and Ireland, the transfer of cost exceeds 18%, and annual tuition for a bachelor’s degree also exceed $5000.

Government funding either goes directly to educational institutions, or it is done through the subsidizing of scholarship, loans and grants. Government also fundsuniversities through student enrolment that ultimately increase efficiency among the universities. The evidence in the OECD points at a cost-sharing formula that cascades from the central government to the state and the local governments, as well as drawing from the private sector and the students and their families as well. This cost sharing formula allows for the expansion of access to education without in any way sacrificing academic quality or the capacity of disadvantaged students to benefit. This also allows the universities, within the ambit of institutional autonomy, to generate their own funds while decreasing their dependence on government support. In the final analysis, it saddles the institutions with the responsibilities of being more responsive to students’ needs.

Across the African continent, the funding of tertiary and non-tertiary education depends heavily on the central government, with regional variation depending on the economic status of the country. While African governments spend at least about 5% of GDP on education, the continent is the worst in terms of education spending efficiency, compared to Europe and North America, and even Latin America. Public spending on education is often constrained by weak public resource collection capacity, as well as decreasing international development assistance, microeconomic and growth instability, huge debts, weak tax administration and very large informal sector. All these, and especially in the case of Nigeria, points at the urgency of policy creativity that will highlight the designing of financing model for education that allocates the state’s scarce resources efficiently and equitably. Such models will have to focus on maximizing merit-based dynamics that will enhance education, without undermining equity, especially with regard to disadvantaged students. No matter the financing model that is adopted, the educational experience of all students must be enhanced, no matter their background, learning capability, gender, economic and income profile, ability or disability, or racial and national differences.

Categorizing Universities following US’ Tier 1 to Tier 5

We alluded earlier to the possible imperative of categorizing universities based on functionality.In the United States, for instance, just as universities are categorized into five tiers. Tier 1 colleges and universities—like Harvard, Yale, Rice, Stanford, etc.—are the most difficult to get into, with admission rate below 10%. Tier 2 schools are seriously competitive but less so than the tier 1, and they have admission rate below 20%. Examples are Boston, Tufts, Georgetown, UC Berkeley, Georgia Tech, Emory, Tulane, NYU, etc. The tier 3 schools are not as competitive with regard to admission, since they have a rate that is below 35%—Virginia Tech, Lafayette College, University of Florida, etc. This frame for the different categories of universities can also be determined around clusters that denote whether they are high-tuition or low-tuition; or whether they are general or specialized. Each of these categories of universities can then be shored up with financing options ranging from student loans scheme, education banks, scholarship, bursary awards, and so on.

This is where the Tertiary Education Trust Fund (TETFUND) comes into the fund management framework, but in a more enhanced and rehabilitated form. For instance, one significant defect of TETFUND is its inability to autonomously generate and manage the funds it collects through investments, for instance, in bonds. This is where TETFUND could aim to become the hub for the public-private partnership that should serve as a veritable source of funding to complement government effort at sustaining a qualitative education profile. With the Infrastructure Concession Regulatory Commission (ICRC) Act already in place, the fault is with tertiary institutions not exploring and exploiting the various PPP templates available—design-build, management contract, lease-and-operate contract, design-build-finance-operate, build-operate-transfer, buy-build-operate, build-own-operate, build-own-operate and transfer; donor-financed/funded-transfer. Indeed, the presence of private enterprises on university lands can also be a source of revenue. Or certain infrastructures, like student hostels, can be managed privately in ways that takes the universities’ mind off the responsibility of maintenance. TETFUND therefore becomes a dual-purpose organizational framework: on the one hand, it stands as the repository of government’s increasing efforts to supplements its funding of public education through non-budgetary options like exactions from specific economic viable cum competitive sectors. On the other hand, TETFUND serves as the regulatory hub for the management of thefunds emanating from the concessionary relationship between a university and the private sector in a PPP relationship. In all, TETFUND becomes the arrowhead for funding allocation to tertiary institutions based on competitive parameters, like student enrolment, internationalization, and research and development.

This is where alumni, or old students, associations become critical addition, as non-profit and private funders, to the alternative financing sources that enhance the quality of education in Nigeria. In this regard, one must first note a significant correlation between the functional relevance of alumni associations and universities’ relationship with their students. There surely must be a relationship between the quality of education a student derived from a university, and her willingness to give back to her alma mater, post-university. A university that invests in the existential welfare, academic achievement and future orientation of a student is one that can then hope to benefit from endowments. The recent endowment of $1m (roughly N417million) by MrPhilip Ozuah to the College of Medicine, University of Ibadan, is all the evidence of the relationship between an alumnus and the funding/endowment of the university that is needed. MrOzuah channeled the donation through the Ibadan College of Medicine Alumni Association Worldwide (ICOMAA-WW).

One could surmise that MrOzuah, a 1985 graduate of medicine, represents a generation that benefitted from a period when qualitative education and university-student relationship were the norm. From the 1990s, tertiary education had commenced a nosedive that probably also affected the functional significance of alumni associations. In other words, with increasing decline, especially in academic quality and infrastructural provisions, students no longer could generate the requisite pride that keep them bonded to the memories of their stay in the university, and mobilize their enthusiasm to keep supporting the school. Thus, alumni associations are founded on exceptional undergraduate experiences that metamorphose into school pride and lifelong bonding.

The significance of the alumni associations not only strengthens a university funding source, it also serves as a framework for mentoring, effective administration, policy creativity within secondary or tertiary education, as well as the provision of scholarship. Most important for me is how alumni associations could also be incorporated into the governance of tertiary institutions, for instance. University autonomy, as we have demonstrated above, requires that a school becomes creative in managing its administrative and governance dynamics in ways that complement the efforts of a government in terms of funding. Incorporating alumni associations and corporate bodies into the governing boards of schools and tertiary institutions ensures that these schools benefit from the insights of those who have decided to commit their resources and wisdom into making these institutions qualitative and relevant.

The alumni associations, apart from serving as an alternative funding source, also becomes a fundamental stakeholder in pushing the status of a school or tertiary institution in its quest for government or private sector funding, especially through TETFUND and other fund management organizations. With a formidable governing board, a university, for instance, could qualify for any of the following funding parameters: (a) performance-based modelwhich allocates competitive funding based on outstanding research, teaching and community development in ways that stimulate excellence and growth; (b) cost-sharing model that lowers financial cost of education through the spreading of such cost among different funders and stakeholders; (c) contextual-peculiarity model allocates funding to a university based on its contextual needs, circumstances (Ahmadu Bello University will qualify for such funding on its need to research into deforestation; University of Nigeria, Nsukka will qualify based on the circumstance of erosion in its region, etc.); (d) host-proprietor-user model (similar to the cost-sharing model) draws all beneficiaries of an educational service and the location of an educational institution into its funding.

Nigeria has a lot to do to recapture the initiative in pushing education to the forefront of her search for development and economic growth. With an adversarial industrial relation and a debilitating public education that as pushed private institutions to the fore, the situation is indeed very dire for the future of human capital development. And yet, there is still hope to the extent that the alumni associations can push themselves into the fray as the instigators of further reflections on alternative option in the financing of public education institutions. Public educational institutions in Nigeria, from the primary and secondary to the tertiary are far from providing high-quality education as they presently stand. And it is exactly that qualitative education that the government and relevant stakeholders must make concerted efforts in providing if Nigeria is to achieve public education spending efficiency that pushes its development agenda.

*Being Lecture Delivered at the 2022 Annual General Meeting and Re-union Dinner of Olivet Baptist High School, Oyo National Old Students Association Held at NOSA Hall, Olivet Heights, Oyo on Saturday, the 12th of November, 2022

Prof. Tunji Olaopa

Retired Federal Permanent Secretary

& Professor, National Institute for Policy

and Strategic Studies

(NIPSS), Kuru, Plateau State.

(Being Lecture Delivere