By Dele Sobowale

‘The price of global benchmark Brent crude against which Nigeria’s oil is priced, continued its decline on Wednesday and settled around $56 per barrel, $9 lower than the country’s budget benchmark price this year.” Femi Asu, PUNCH, January 1, 2015, p 36.

That the Nigerian economy is in deep trouble is no longer in dispute. Nobody, except those in the corridors of power in Aso Rock, habours any illusion that an economic recession is a possibility; the projected 5.5 percent GDP growth might become part of the illusion pervading official economic policy at the moment. The $65 per barrel, on which the third budget proposal was based, proved deceptive when in less than two days after its presentation the price of crude fell below $60 per barrel. So, as it is, the third budget submitted by the Federal Government is headed for the dustbin.

Public universities

Since there is now no budget, and all public universities depend heavily on Federal and State governments’ subventions, it is obvious that our universities are also in deep trouble. The Vice Chancellors, as Chief Executive Officers, Bursars and Council members, now serving, might be facing the most difficult challenges that Nigerian universities have encountered since the harrowing experiences associated with the Structural Adjustment Programme, SAP, in the mid-1980s to early 1990s. Then, as now, it was the sudden and prolonged drop in the price of crude oil which created the problems. It is a testimony to our inability to learn from history that 30 years after SAP started, we are back at the point of starting out once again.

Funding universities under uncertainty is a matter that is at once simple and complex. It is simple because everybody can understand that when the size of cake shrinks everybody gets a smaller slice. So, from that standpoint, universities should expect less from governments. The complexities arise when ASUU and other stakeholders point to agreements they had with governments concerning salaries, allowances, investments in infrastructure etc – all obligations which governments will find it increasingly difficult to discharge. And governments will not only fail to pay the universities; they will not be able to pay everybody. The question now is what will happen, starting in 2015, as governments grapple with decline in revenue at the same time as financial obligations escalate. Difficult as it may seem, every university owes it as an obligation to its own stakeholders to attempt to forecast what it is likely to receive from the government(s) sponsoring it, as well as from other donor units. Budgeting, always an inexact exercise, will become even more hazardous this year, and, perhaps, for several years to come. That is however not a reason for abandoning it. As long as the basis for a budget is known, any deviation from the assumption can be quickly incorporated into the implementation plan.

Among the options to obtain more funds, every university, federal or state, must now face squarely the controversial issue of raising tuition fees. For a university like Lagos State University, LASU, which increased, and backed down under protest, as well as others, the issue might no longer be avoided. What would have to be decided is the size of the increase by each university.

Internally Generated Revenue, IGR, by the universities, will need to be revisited. Somehow, universities must come up with ideas and projects which will provide then with steady and sustainable income which will assist them in reducing the negative consequences of crude price decline.

Crude price decline

Sad as it may be, retrenchment of academic and non-academic staff remains another possibility in the attempt by several universities to stay afloat. It is a fact that enrollment for some courses is very low – at all public and private universities. When five or six students select a university as first choice, and not all heading for the same faculty and department, it is difficult to imagine who the lecturers teach. Yet, this is the situation with several Federal and State universities – especially those established in the last ten years. I visited a state university in 2013 where a Mathematics lecturer had only one student to teach in level 200; there was none in 100 or 300. Obviously, several agencies under the Ministry of Education, example JAMB and NUC, now complaining about inadequate funding to implement their programmes will henceforth find it even more difficult to operate.

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