Nigeria’s education budget N742bn, Ghana:N1.1trn; South Africa: N9.1trn
By Adesina Wahab
AS public universities in the country have been shut down since February 14 this year due to strike action by staff unions whose demands are mainly financial in nature, unless drastic steps are taken, the issue of poor funding may linger in the sector for a while, findings by Vanguard have revealed. This is just as the country is losing huge sums of money, in scarce foreign exchange, as Nigerians go abroad to study.
In this year’s budget, the Federal Government, FG allocated the sum of N355.47 billion to the 44 federal universities from the total budget of N875.93 billion given the education sector. According to a document by a civic organisation, BudgIT, out of the N355.47 billion allocated to the federal universities, N326.9 billion would go for recurrent expenditure comprising N320.7 billion for personnel cost and N6.1 billion for overhead cost. Only N25.5 billion is slated for capital projects in the universities.
The top five universities with the highest allocations are the University of Nigeria, Nsukka, N24.2 billion; Ahmadu Bello University, ABU Zaria, N22.6 billion; University of Calabar, N19.8 billion; University of Benin, N17.7 billion and the University of Ibadan, UI, N17.1 billion. In terms of capital projects in the universities, the top five beneficiaries are: the National Open University, N2.6 billion; Federal University, Lokoja, N1.7 billion; ABU, N1.6 billion; University of Lagos, UNILAG, N963 million and UNN, N900 million. However, cognisance must be taken of the fact that lack of funds may not make the budget to be implemented 100 per cent.
Education Budgets in other climes : Investigation by our correspodent showed that in six years, Nigeria budgeted N3.6 trillion for education out of N55.3 trillion total budget. The period covers the year 2016 to 2021. In 2016, out of the total budget of N6.06 trn, the sum of N369.6 billion or 6.7% of the budget was allocated to public education. In 2017, N550bn or 7.38% was allocated to education out of N7.29 trn budget, while in 2018, N605.8 bn or 7.04 % was given to education out of N9.2 trn budget. In 2019, N620bn or 7.05% was allocated to education out of the budget of N8.92 trn, while in 2020, education got N671.07bn or 6.7% out of N10.33 trn budget.
In 2021, N742.5bn or 5.6% was allocated to education out of a budget of N13.6 trn. On the other hand, according to reports by the World Bank, Ghana allocated 23.81% of its national budget to education in 2015, 22.09% in 2016, 20.1% in 2017 and 18.6% in 2018. For South Africa, it has kept increasing allocations to the education sector from R246 billion or 16.7 % in 2018, R310bn in 2019, R387bn in 2020 and projected that it will hit R416bn by 2023/24.
Losing to other nations: Findings showed that the country loses billions of dollars yearly to other nations in school fees. Nigerian students are found mainly in universties in the United Kingdom, the US, South Africa, Ghana, Ukraine, Australia, Russia among others. According to the Institute of International Education in the US, Nigerian students spent about $514 million (about N2.5 trillion) on school fees in the country in 2021. Also, the about 19,000 Nigerian students in neighbouring Ghana spent about N250 billion on school fees last year.
A Ghanaian student pays an average of $276 as fees, while a Nigerian student there pays an average of $4,647. Only recently, the Central Bank of Nigeria came out to say that between 2010 and 2020, the country expended the sum of $28.66 billion on the payment of fees by Nigerian students studying abroad. That is an average of $2.86 billion a year.
Government policies on tuition: At the lower levels, the federal and state governments are supposed to run free basic education which means pupils and students in public primary and public junior secondary schools are not paying anything. The pupils and students are also supposed to be given free textbooks in some key subjects such as English Language, Mathematics, Basic Science, Computer, Yoruba/Igbo/ Hausa depending on the state.
However, most states have not kept faith with the programme. In Lagos State for instance, the books were last supplied to the schools over six years ago. The student populations in schools have outgrown available books, most of which are either torn or outdated.
At the tertiary level, the FG charges between N30,000 and N50,000 as fees in its universities, excluding accommodation fees, while many state governments charge fees depending on the courses. For example, a medical student at the Osun State University may pay about N650, 000 per session. At the Lagos State University, LASU, the students pay on average, about N60,000 per session. To give an idea of how much could accrue from fees, the University of Nigeria, Nsukka, has a population of about 35,000 students and students pay an average of N50,000 as fees, giving a sum of N1.75 billion. The Federal University of Technology, Akure, FUTA, has about 5,000 students and charges an average of N30,000 as fees giving a total amount of N150 million.
Subventions from government: For federal universities, the subventions given them by the FG is calculated based on the staff strength, number of students, locations and other factors. That means they don’t get the same amount from the government though how much each gets is also dependent on how deep the pocket of the government is at any point in time. There are some federal universities yet to get take off grants from the government years after being set up. Last year, Non-Academic Staff Union, NASU and the Senior Staff Association of Nigerian Universities, SSANU, of Ekiti State University, Ado Ekiti, had to protest the irregular payment of subventions to the school. Their leaders, Comrades Kolapo Olatunde and Olojede Olayinka, also alleged that no capital vote was released to the school for 10 years.
Cost of running a varsity annually: Opinions are divided on how much is required to run a university annually, excluding the payment of salaries. This is because the size and nature of courses are important in determining the figure to look at. But going by the fact that the FG usually allocates N4 billion as take-off grant for its newly-established universities, one may be tempted to think that is enough. Also, the call by the leadership of the Academic Staff Union of Universities, ASUU, that the National Universities Commission, NUC, should at least mandate those who want to set up new universities to put aside between N30 and N40 billion as running costs for at least three years, could mean that an average university may need about N10 billion to run annually.
Some expenditures borne by universities: Whether they are state or federal universities, it is the owner government that pays staff salaries and provides facilties. However, some expenses are borne by the management. The funds for such are sourced from internally generated revenue. One of these is the cost of electricity. There have been instances where power firms disconnected universities from the national grid. Ikeja Electric did that to the Lagos State University, LASU, last year. To know the enormous responsibility that of the management of universities, UNILAG could be an example. In about a year, UNILAG paid over N1.1 billion as power bill to Ikeja Electric. The cleaning of hostels is mostly sourced out by the schools.
How public varsities are funded abroad: In the United Kingdom, the government provides about of 66 per cent of the research funding for its universities, while in South Africa, the government provides about 50 per cent. In the United States for instance, 68 per cent of the students are in public universities which are funded mainly through state and local taxes that make up about 11 per cent of the funds. Other sources of funds are tuition, endowments, research grants etc. This is because public universities depend on government funds as they typically lack the endowments and donation network of private varsities. The University of California, Los Angeles, UCLA, is a public university owned by the state of California and was established in 1919.
UCLA’s Centennial Campaign: As part of the activities to mark the centennial anniversary of the university, it launched a campaign to raise $4.2 billion and by February 2020, it raised over $5.49 billion, 18 months ahead of schedule. The campaign was rated one of the most ambitious fundraising campaign by a public university in the US. The university draws plan of its financial needs yearly, though supported by the state which gave it about $1.42 billion as research grant in 2020.
For the 2020/21 session, the university raised $611 million in funding, which was far above its target for the year. That year, the school got donations from all the 50 states in the US and from 72 foreign nations. The average fee for an undergraduate course in UCLA is $33,104 for a citizen, while a foreign student pays over $50,000. This is a sharp contrast to about N30,000 (about $60) paid in a federal university in Nigeria. Also, universities, whether public or private, enjoy generous donations from public spirited individuals and corporate bodies abroad. In 2016, Michael Bloomberg donated $1.8 billion to a public university, the John Hopkins University, while in 2016/17, public universities in South Africa attracted over $1 billion as donations.
Situation in the universities now
In Nigeria, apart from the government, the major financier and provider of facilities in the nation’s tertiary institutions is the Tertiary Education Trust Fund, TETFund. Recently, the immediate past Executive Secretary, Prof. Elias Bogoro, at an event in Lagos said the fund spent over N196 billion on facilities and other things in public universities in the last three years. The same amount was spent on polytechnics and colleges of education. He, however, lamented that while the burdens of the Fund kept increasing courtesy of new schools being set up, the fund available to TETFund was decreasing, adding that while it expected a revenue of N500 billion for 2021, it didn’t get half of the figure, though he attributed the situation to the impact of COVID-19 pandemic on businesses.
How to reform the system: In a paper titled: Reforming Nigeria’s Public University System, a financial expert and public commentator, Mr Vincent Essien, analysed various ways the issue of funding and making university education affordable can be achieved. He suggested that the corporate structures of the universities be modified and that the funding aspect approached from another angle.
Corporate Structure: Nigerian public universities need to quickly migrate towards full and complete autonomy. The federal and state governments need to relinquish ownership of public universities in order to onboard other partners and stakeholders who can share the burden and stress, so that all stakeholders can enjoy better benefits from an improved university system. First of all, we need to question the rationale behind government’s continued ownership and control of public universities, which carries along the principal obligation of funding and sustaining these institutions. This is an obligation that has clearly become unsustainable and this position is currently threatening the future of the Nigerian educational system. What is government’s primary interest in the university system? This can be reduced to three areas.
Corporate Organisations: Let the federal and state governments find at least two major corporate entities that will be willing to come on board as Trustees/Investors in our incorporated public universities with a guaranteed annual grant/support to the designated university from their budget. They could be freed from the 2% Education Tax burden in this regard. They should also embrace universities that they have affinity or connection with. For example, OLAM with Nasarawa State University where they already have a large farm investment, or Larfarge with Ogun State University. Emzor Pharmaceuticals for example can invest in the pharmaceuticals department of a chosen university towards driving research and development which would entitle it to become a Trustee of the institution.
Private investors in university infrastructure.
Companies who are willing to invest in critical university infrastructure for commercial returns e.g. Specialized Programs, Hostels, Lecture Theatres, Drama and Art Theatres, Sports Infrastructure, Broadband Infrastructure etc. These investments will entitle the investors to become stakeholders and Trustees in the public universities.
Alumni: The alumni of the university should automatically earn a place in the University Board of Trustees, with a commitment to support the university with a minimum funding and management support every year to sustain the legacy and growth of their mother institution.
Student sponsors: Parents, guardians and sponsors of students should also be entitled to have a representative on the Board of Trustees to ensure that their students have the quality of education that they have paid for.
Community Representatives: The local community where the university is located should also be entitled to have a representative on the Board of Trustees. Their representative should be persons who are willing to commit to providing financial support to the university. Using the example of the UNILAG, the Oba of Lagos should be able to nominate a notable industrialist and citizen of Lagos, who will commit to supporting the university and representing the community’s interests. A representative of the federal or state government as Legacy Owners of the university. The university’s vice-chancellor as a representative of the Senate of the university. The Board of Trustees shall be the apex body of the university and shall oversee the activities of the Senate of the institutions and supervise the educational and non-educational activities of the universities.
Staff members: All academic and non-academic staff of the university shall be employed by the respective uiniversities and their terms and conditions of service shall be specific to the university. There shall be no parity of conditions of service as each shall be separate, independent and distinct. ASUU shall simply ensure that each university keeps up with the terms agreed with its own staff as opposed to the present generalised system.
Funding: Each public university will plan and project their budgets based on their specific circumstances which should be based on the following:
Student Population: UNILAG for example, has a student population of about 50,000. In the 2022 National Education budget, UNILAG has a federal subvention of N14bn, University of Ibadan – N17bn, while Ahmadu Bello University has a subvention of N22bn. If UNILAG was to utilise its entire subvention on training of students, the cost would come to about N280,000/annum (average school fees in UNILAG is about N55,000). UI has a student population of about 42,000 and if it were to utilise its entire subvention on training of students, it would average about N404,000/annum (please note that school fees in University of Ibadan currently averages under N35,000)
Proposal: For an initial period of five years, if the FG’s total subvention to the federal universities should stay at their present cap of N355.47bn as well as the specific subvention to each federal university, the FG should free itself of obligation of payment of university staff salaries and rest this responsibility with the employers of all staff of the university (the Incorporated Universities) acting through the Board of Trustees and implemented by the University Administration including the Senate. All talk about IPPIS or UNTAS should stop forthwith. Each university should determine its salary structures, engage its staff based on their peculiarities, so staff of UNILAG and University of Jos cannot and should not be on the same salary structure. The Incorporation of all universities can be done within an emergency period of six months.
Current university subventions: The current subvention of the FG to public universities will remain at the current scale but shall be converted into student loans which are tied to a specific number of students per university. We also project that a maximum of 70% of the students within the quota or carrying capacity of a university will be qualified for Student Loans.
A student loan is a grant to proven indigent students per academic year, and the loan will be recovered from the student upon graduation from the institution. The loan is only for the specific expected years of study and is not extendable if the student doesn’t meet up with the studies. For example, a resit year will not be eligible for Student Loan cover.
The loan is broken into the following key needs: Tuition, accommodation and living expenses.
Taking the 2022 Subvention figures for UNILAG (N14bn) for instance:
UNILAG – N14.1bn
School fees – N55,000
Hostel fees – N25,000
If the FG were to make provision for N500,000 as student loans to UNILAG, 34,000 students from the current student population would be entitled to benefit from that program which would be close to 70% of the student population. If 30,000 student loans are available, that would be 60% of the student population of the university. Also note that the broad costs for various courses of study will be different. It is important to note that beneficiaries of student loans will be entitled to complete their full university course/program without the obligation to make payments for tuition & accommodation in addition to monthly provision for living expenses.
The N500,000,00 Student Loan can be broken down thus:
Tuition – N200,000.00
Hostel fees – N120,000
Living expenses – N180,000 (N20,000 for 9 months)
For the remaining 20,000 students
This segment of the student population who may not be entitled to student loans will have to pay the statutory fees which may or may not be at parity with the student loan fees.
However, note that this is just the position for UNILAG. This payment will yield a probable figure in excess of N11-12bn to UNILAG, and this is just from tuition and student-based payments. This does not factor in the expected investments by the other investors onboarded by virtue of the new University Corporate structure.