Towards Models for
Creatively Funding Higher
Education in Nigeria
Professor Peter A. Okebukola, PhD, OFR
Chairman of Council, Crawford University and
Former Executive Secretary, National Universities Commission
Lome, Togo, November 26-28, 2014
Goal of the presentation
• Four questions shall be answered in the paper: (a)What
are the historical antecedents to the current model of
funding the Nigerian university system? (b) What are the
different funding scenarios that predominate in the
system highlighting their merits and demerits? (c) What
is the impact of the current funding system on the
quality of university education? (d) What are creative
models of sustainably funding the system?
The Context: The Nigerian Higher
Education System
• Higher education which covers all forms of post-secondary delivery
is typically the last four years of the 1-6-3-3-4 education system.
• It has a history dating back 89 years with the establishment of the
Yaba Higher College.
• It had a glorious past with products of the system being part of a
global stock of professionals.
• These products have been a national resource and drivers of
Nigeria’s socio-economic and political development.
• Within the last 25 years, the lustre in the quality of these products
is dimming and inadequacy in funding has been a factor of interest.
Clusters of Higher Education Institutions
• There are three main clusters of higher education institutionscolleges of education, polytechnics and universities, all with public
and privately-funded elements.
• About 80% of the 83 colleges of education are publicly funded.
• Of these, 69% are owned (hence funded) by the federal government.
• State-owned colleges make up 12% of the total.
• There are nine private colleges of education.
• The sub-system is regulated by National Commission for Colleges of
Education (NCCE).
Polytechnics
• The polytechnic sub-sector has 406 institutions. This is made
up of polytechnics (74), monotechnics (27), colleges of
agriculture (36), colleges of health technology (50), other
specialised institutions (16) IEIs and VEIs (71). About 25% of
these institutions are owned by the federal government with
another quarter being state-owned. There are 95 privatelyowned institutions in this sub-sector that is regulated by the
National Board for Technical Education (NBTE). NBTE takes
responsibility for overseeing the funding of the federal
institutions.
Universities
• The Nigerian university system has 129 universities
made up of 49 federal universities, 40 state-owned
and 51 private universities. The National
Universities Commission (NUC) is the
superintending and regulatory authority which
over years, has played oversight role in the funding
mechanisms especially of federal universities.
N billions
A Focus on Universities:
Trends in Funding Universities in Nigeria
35
30
25
20
15
10
5
0
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
• From 2007 to date (2014), the Goodluck Jonathan
Administration has hiked the volume of funds to
federal universities (Fig. 2). The picture for state
universities follows the same general trend
although this high volume is significantly depressed
when the Naira exchange rate and other cost-ofliving indices are factored into the funding profile.
2005
55,921,243,975
2006
78,066,798,858
2007
84,754,170,431
2008
106,658,292,972
2009
111,253,168,946
2010
181,911,828,185
2011
186,350,831,314
2012
210,525,136,983
0
50,000,000,000
100,000,000,000
150,000,000,000
Naira
200,000,000,000
250,000,000,000
Factors Shaping Change
•Political will
•State of the national
economy
•Action by staff and student
unions
The “Envelope” System of Funding Higher
Education in Nigeria
• The envelope system is a top-down approach to funding.
• The envelope system trimmed profligate spending.
• A modified envelope system is currently in use where adjustments
are made to the envelope from the top based on priority needs of
a Ministry, Department or Agency. This can be labelled a
“modestly flexible envelope”.
• The finite nature of money available for spending by the national
government dictates that the envelope system will be a feature of
funding higher education.
• The system will continue to depend on intervention funds for
augmentation.
Creative Funding through Education Intervention
Funds
• There are four major education intervention funds in Nigeria.
• Universal Basic Education Commission (UBEC)
• Tertiary Education Trust Fund (TETFund), Petroleum
Technology Development Fund (PTDF)
• Petroleum Equalisation Fund (PEF).
• They are “intervention” funds to the extent that they are
meant to “intervene” to narrow or bridge the gap between
what has been provided for in the national budget and what is
needed by the Ministry, Department or Agency (MDA) for its
full implementation.
Education Trust Fund/Tertiary Education
Trust Fund
• Established in 1993
• 2% of gross profit of all registered
companies in Nigeria
• By Act of 2011, the fund was changed from
Education Trust Fund (ETF) to Tertiary
Education Trust Fund (TETFund).
Used for…
• Essential physical infrastructure for teaching and
learning
• Institutional material and equipment
• Research and publications
• Academic staff training and development and
• Any other need which, in the opinion of the Board of
Trustees, is critical and essential for the improvement
and maintenance of standards in the higher educational
institutions
Impact
•The 21-year history of ETF/TETFund
shows an impressive record of impact.
•Enhancement of physical development
and improvement in human capacity of
the system through ETF/TETFundsupported training.
Petroleum Technology Development Fund
(PTDF)
• The Petroleum Technology Development Fund
(PTDF) is a parastatal of the Ministry of Petroleum
Resources established by Decree 25 of 1973 for
the purposes of development, promotion and
implementation of petroleum technology and
manpower needs through research and training of
Nigerians.
• The Fund is set up for the purposes of
training Nigerians to qualify as
graduates, professionals, technicians
and craftsmen, in the fields of
engineering, geology, science and
management in the petroleum industry
in Nigeria or abroad.
The Fund is utilised…
• to provide scholarships and bursaries, wholly or partially in universities, colleges,
institutions and in petroleum undertakings in Nigeria or abroad;
• to maintain, supplement, or subsidise such training or education;
• to make suitable endowments to faculties in Nigerian universities, colleges, or
institutions approved by the Minister;
• (a)
to make available suitable books and training equipment in the institutions;
(b)
for sponsoring regular or as necessary visits to oilfields, refineries, petro-chemical
plants, and for arranging any necessary attachments of personnel to establishments
connected with the development of the petroleum industry; and
• (c)
for financing of and participation in seminars and conferences which are connected
with the petroleum industry in Nigeria or abroad.
•
•
The Issue of Tuition: Three Factors
Interplay
• Education is largely taken to be a public good by
most Nigerians
• Poverty level: where poverty prevails, it is
unethical to economically strangle to death
through high tuition, parents of brilliant students
wishing to enrol in higher institutions.
• Factor of available funds
Student Loans, Bursaries and Scholarships
• The student loan scheme in Nigeria
thrived for a few years in the early
1970s.
• In contrast, bursary and scholarship
schemes have fared relatively better.
Impact
of
Current
Funding
Models
• Inadequacy of funds
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
0
Average
2002
41.67
2003
44
20
2004
45.67
40
2005
49
2006
49
60
2007
50
2008
51
80
2009
51.67
2010
62
100
2011
64.33
2012
72.67
120
Capital
12
14
18
22
25
28
35
36
60
67
80
Overhead
15
20
20
26
25
26
21
21
26
26
28
Salaries
98
98
99
99
97
96
97
98
100
100
100
• Low Capacity for Utilisation of
Available Funds for Capital
Development
• Low Capacity for Internal Generation
of Funds
Resultant Effects
Towards More Creative Funding Models for
the Nigerian University System
• Government’s Minimum Funds Allocation
• Prescription No. 1: Government at the federal and state levels to
provide and release minimum of 25% of national/state budget for
education with minimum of 40% of the education budget for universities.
This is in alignment with the provisions of the operational plans of the
country’s Vision 20:2020.
• Prescription No. 2: Section 10 (150e) of the 2013 National Policy on
Education directs that contractors, consultants and other service
providers are to contribute minimum of 1.5% of contract sum/fees to a
Special Education Corporate Social Responsibility Fund (SECSOF) for
providing additional government funding support to education.
Methodology for Developing the Funding
Models
• Step 1: Survey of areas needing improvement in current
model
• Step 2: Brain-storming session with experts in higher
education financing
• Step 3: Emergence of four draft models
• Step 4: Validation of Draft Models
• Step 5: Revision of the Models
• Step 6: General Test and Level of Acceptability of the Models
The Proposed Models
•Access-Equity-Cost-Sharing Model
•Contextualised Formula-Funding
Model
•Performance-based Funding Model
•Host-Proprietor-University-UserFunding Model
Central Issue is Unit Cost
U.C
Where,
U.C
TRC
TCC
SLE
TSE
=
TRC + TCC + SLE
---------------------TSE
=
=
=
=
=
Unit Cost
Total Recurrent Costs
Total Capital Costs
Student Living Expenses
Total Student Enrolment
The components that constitute each of the costs are:
TRC
Total Academic Costs + Total Administrative Costs
TCC
Main Capital + Rehabilitation & Refurbishment +
Teaching and Research Equipment
SLE
-Academic Support Expenses (Books, Stationery, etc); Living Expenses (accommodation, food, transport etc)
TSE
Total Undergraduate Full Time Equivalent
Table 2: Observed and Expected Unit Cost
per Student per Discipline (2012)
Discipline
Administration
Arts
Agriculture
Education
Engineering
Environmental
Sciences
Law
Social Sciences
Science
Medicine
Pharmacy
Veterinary Medicine
Management Tech
Observed Unit
Cost (N)
525,000
555,000
690,000
555,000
645,000
735,000
Expected Unit
Cost (N)
719,250
760,350
945,300
760,350
883,650
1,006,950
594,000
549,000
615,000
906,000
735,000
735,000
510,000
813,780
752,130
842,550
1,241,220
1,006,950
1,006,950
698,700
The Models
Access-Equity-Cost-Sharing Model
•This demands the lowering of
financial barriers to higher
education while ensuring equity in
sharing of the funding burden by
different stakeholders based on
ability to pay.
Contextualised Formula-Funding Model
• Fund universities based on a formula which factors in
individual peculiarities and current state of physical
development and a desire to encourage programmes in
science and technology with potential to accelerate
impact on Nigeria’s socio-economic development.
• UTFN=PNAS+(CC X .02AUC X FST X RA X GS).02AUC + K
Performance-based Funding Model
• This rewards universities for efficiency in teaching, research and
community service and encourages competition among
universities which will stimulate the evolution of centres of
excellence. It makes funding allocation more transparent and
more competitive through redistributive funding formulae
mainly based on performance. (The funding formula is kept
simple, with unambiguous metrics, so expectations are clear to
everyone.). The Block Grant to a University (BGU) in Naira is
given as
BGU=CC X .60AUC X APR X DSE X 4GR X GER X RSO X EGO
Host-Proprietor-University-User Funding
Model
•This model implicates all beneficiaries
of the location and service of the
university in contributing to funding
the university.
Concluding Remarks
• The models proposed in this study have been tested and
found largely acceptable by the sample of key
stakeholders in the Nigerian university system. Further
consultations are on-going with a view to securing nearglobal acceptance since a scenario where all will accept
the final model is not envisaged. Hopes are high that the
final model will assure the system of a better funding
regime leading to improved performance.
Thank you