By Dayo Adesulu
Chairman of EASYPASS Learning Limited and the Dove and Brooks Group, Dr. Olatunji Oluwagbenga SoboduÂ has called on stakeholders in education sector to rise up to the financial challenges plaguing the sector in these hard times of global economic recession that makes it seemlyÂ difficult to fund schools, especially private schools.
Dr. Sobodu made this known in Lagos recently while delivering a paper at Associate Schools Forum 2009 maiden edition on Financial Framework for 21st Century School, organised by Standard Mandate International SMI..
According to Sobodu, the 21st century school must work hard to advance and get to the top, stressing that school owners should never make profit their main point of difference as price should not be made the main consideration for picking them over the competition because a pricing basis for differentiation is usually destructive to all players.
â€œAchieving lasting financial success implies to achieve profitable growth, and profitable growth is sustained growth in both revenues and profits over an extended period while total shareholder returns exceed the cost of capitalâ€, he said
He further said that a school system can only remain relevant and impactful if it maintains a strong and viable financial base as sustained profitable growth requires a clear definition of an organisationâ€™s core business and pour the organisationâ€™s resources into this core business until it achieves its full potential.
His words: â€œ The financial framework must incorporate a clear investment strategy so that the cash flows generated by the school must be optimally managed, such that funds are available as at when required, while surplus funds are invested for optimal returns.
The schoolâ€™s investment strategy should be a combination of short and medium-term investments with sufficient flexibility from a cash flow point of view. The finance function should take responsibility for implementing the investment strategy developed in conjunction with the school management or board.â€
SoboduÂ further encouraged school owners who need financial support to go for long-term finance which will be required for developing infrastructure and supporting technology-intensive agenda. â€œExternal sources of long-term finance should be increasingly sought by schools.
Such loan opportunities are available from agencies such as IFC, World Bank, ADB through banks,â€ he said, stressing that such loans have longer tenor and are generally cheaper. Besides, grants and endowments are other innovative sources of financing growth-inducing initiative of schools, he added.
Dr. Sobodu however used the occasion to inform Nigerians that the global financial meltdown is a reality. Stressing that those who think it can never affect Nigeria, has probably forgotten that our major source of income is oil and that we are not the major buyer, explaining that we depend on other countries to survive. Therefore, when it affect them, it will affect us.
Because the extent to which Nigeria can trade with the world is the amount of dollars she has. â€œOne of the ways the world check the meltdown is for each country to come and spend the dollars in their possession. And if Nigeria is to live above the global meltdown, she has to have and spend enough dollars in her reserve,â€ he said.