A Framework for Sustainable Funding of Education in Nigeria By Dr. Abraham E. Nwankwo

Public Lecture presented at Bayero University, Kano

March 05, 2018

 A FRAMEWORK FOR

SUSTAINABLE FUNDING OF EDUCATION IN NIGERIA

Plagiarism Alert

This paper is an updated and revised version of my earlier paper presented publicly in 2008 and  published in 2009 by the Nigerian Educational Research and Development Council (NERDC) in the Proceedings of the National Conference on Educational Reforms for Sustainable Development 2008 (pp. 67 – 83), with the title, “Options for Sustainable Funding of Education in Nigeria”. Later in 2014, the paper was plagiarized massively by one Nwachukwu, Philip O., a member of staff of NERDC and published in the Journal of Education and Practice, Vol. 5, No.20, 2014 as can be accessed at the IISTE website:  www.iiste.org//Journal/index.php/JEP/article/viewFile/14243/14551. The intellectual property infringement has been reported to appropriate authorities for remedies. The ownership of the original ideas posited in the paper and the consequent intellectual property right remain wholly mine.

 

1. Introduction: Relevance and Components of Sustainability

 

Given the rapid changes going on in the world economy, powered mainly by rapid developments in information and communications technology (ICT), it is obvious that any country that wants to be reckoned in the global arena must be outstandingly advanced in education.  Accordingly, Nigeria needs to redouble its efforts to massively educate various segments of the society in order to occupy a consequential position in the global economic scale.  In this context, Fafunwa (1967) has aptly noted that “if Africa is to make progress in moving from the 18^th century, unconventional approaches to science and education, unprecedented in world history will have to be derived”. Indeed, for the government of a developing country such as Nigeria, a major responsibility is to use the educational system to address economic, social and political challenges. Accordingly, any factor that influences education sector outcomes should be well analyzed and understood. One such factor is sustainability of funding.

2. In order to effectively capture the essentials of the problem under consideration, it would be useful to define the sustainability of funding in its various dimensions.  These include: adequacy, effectiveness, dynamism and reliability. Adequacy of funding refers to whether resources are enough to fund the system of education in place. Its effectiveness refers to whether the pattern and practice of the application of the funds available are such that would yield maximal value for money. Dynamism of funding of education refers to whether the policy and strategy for the funding of education are those that change or are modified, to reflect changing realities and experiences or are rigid and unresponsive to emerging challenges. Reliability refers to whether the source and implicit method for funding education is dependable, at least over a considerably long period of time or whether, on the other hand, it faces significant risks of disruption, fluctuations and depletion.

 

3. Another set of dimensions for evaluating funding sustainability is largely about the quality of the predominant behavior and orientation of the human agents and institutions, particularly in the management of government-funded projects and programmes. It includes organizational capacity in the economy, sincerity and responsibility of the political and technocratic leadership – for example, whether it is myopic such that short-term, narrow political gains override longer-term, broader socio-economic national development and integrative goals or otherwise – , etc.
4. The analysis will, therefore, take into account two major existing human-factor constraints:
5. the stranglehold on the social process imposed by the prevalent politics of primitive accumulation, particularly in the public sector;
6. the pervasive reliance on the principle of balance of insincerity among power holders and power brokers at the expense of the ordinary citizens, the future generation and real national advancement. ”Balance of insincerity” is a concept employed to describe accommodation and acceptance of acts of impropriety by other groups so as not to block the space for own group’s impropriety that will also be accommodated by the other groups. The concept was first introduced by this author in a paper he delivered at the 2017 Executive Seminar of the Central Bank of Nigeria (Nwankwo, 2017).
7. The elements of sustainability and constraints identified in the preceding three paragraphs will inform the basis of analysis of this paper as it attempts to explore options for sustainable funding of education in Nigeria.  Accordingly, the next four sections will successively focus on: establishing the nature of the problem, explaining the core factors responsible for the problem, advancing a solution framework and situating the suggested solution within the provisions of the Constitution of the Federal Republic.

 

1. Establishing the Manifestations and Depth of the Problem
2. As a result of the pervasive mismanagement of the Nigerian economy over the past four decades, the economic and social development deficits have become overwhelmingly large. The economic mismanagement malady is evident in the trillions of Naira of public sector investment in major capital projects over the past twenty years which yielded negligible results: for several river basin development projects, several iron and steel projects, automobile assembly projects, railway projects, road projects, electric power projects and petroleum refinery projects, the same story of money down the drain prevails. For example, while it is estimated that over the last twenty years, the federal government has spent about N3 trillion on power sector projects, with about N2.74 trillion spent between 1999 and 2015 alone (Umoru,2015), Nigeria’s electric power poverty is among the highest in the world. In 2014, electric power kilowatt-hour consumption per capita was 144 for Nigeria, compared to Ghana’s 355, South Africa’s 4,229 and U.S.A.’s 12,987 (World Bank, 2014). Just as the decay of physical infrastructure is a result of cumulative mismanagement of the economy, so is the decay of social infrastructure, including education.  Therefore, just as the attainment of sustainable economic growth requires massive investment in physical infrastructure, so does it require massive and well-articulated investment in education and other social infrastructure. Accordingly, the issue is not whether but how education should be appropriately resourced.

 

7. A review of the country’s past would reveal that the role of education has always been appreciated. For example, as summarized by Adewale, the National Policy on Education (1981) appreciated the following objectives:

 

1. The inculcation of permanent and functional literacy and numeracy and the ability to communicate effectively;
2. The laying of a sound basis for scientific and reflective thinking, as well as equipping students with the capacity to live effectively in our modern age of science and technology;

• Providing the technical knowledge and vocation skills (as well as in applied science, technology and commerce) necessary for agricultural, industrial, commercial and economic development;

1. Character and moral training and development of sound attitudes, as well as the acquisition, development and inculcation of the proper value-orientation for the survival of the individual and the society;
2. The promotion of national unity and national consciousness;
3. The promotion of self-reliance;

• Diversifying the curriculum to cater for differences in talents, opportunities and roles possessed by or open to students after their secondary school course, and generally equalizing educational opportunities for all children regardless of their sex and their physical, mental and emotional disabilities;
• Providing opportunities for exceptionally gifted children to develop at their own pace; and,

1. Producing highly motivated, conscientious and efficient classroom teachers for all levels of the education system.

 

8. In spite of this articulation of objectives, virtually all the solution initiatives introduced have been poorly implemented for various reasons, prominent among which is unsustainable funding. For example, the Universal and Compulsory Primary Education (UPE) was introduced in 1976, without adequate preparation in terms of the number of classrooms required, number of qualified teachers available and the extent to which available resources could last.  More than forty years after that initiative was introduced, Nigeria still has the highest population of out of school children (OOSC) in the world, numbering about 9 million according to UNESCO estimates (Nwoko, 2015:2) and accounts for between 16% and 18% of the global total OOSC (Nwoko, 2015: 20). Indeed, the educational sector at all levels is still characterized by poor performance and one of the major explanations for this is the crisis of funding and lack of innovative and appropriate structures and strategies for addressing the problem.

 

TABLE 1: Indicators of Nigeria’s Comparative Quantity & Quality of Education                (in %)

 

Country	Adult Literacy	Youth Literacy	Primary School: Trained Teachers	Primary School: Pupil-Teacher Ratio
Nigeria	59.6	65.3	66	38
Cameroun	75.0	80.4	79	44
Togo	66.5	81.4	76	41
Ghana	76.6	89.9	55	31
E- Guinea	95.3	98.8	49	26
Sudan	75.9	87.8	60	25
Kenya	78.0	86.0	97	57
Tanzania	80.3	87.2	99	43

 

Source: Extracted from UNDP Human Development Report, 2016.

 

9. This is reflected in the unsatisfactory condition of education in Nigeria, even when compared with African countries with much less resource endowment.  As Table 1 shows, according to the UNDP Human Development Report 2016, Nigeria’s adult literacy and youth literacy percentage scores (59.6 and 65.3, respectively) were lower than those of such familiar countries as Cameroon (75.0 and 80.4, respectively), Togo (66.5 and 81.4, respectively), Ghana (76.6 and 89.9, respectively), Equatorial Guinea 95.3 and98.8, respectively), Sudan (75.9 and 87.8, respectively), Kenya (78.0 and 86.0, respectively) and Tanzania (80.3 and 87.2, respectively). In terms of quality of primary education as measured by proportion of trained teachers and pupil-teacher ratio, the table shows that Nigeria’s primary education is of poorer quality than those of Cameroon, Togo, Kenya and Tanzania.

 

10. Manifestations of poor funding of Nigeria’s education from the mid 1970s into the 2000s abound.  There have been widespread cases of arrears of unpaid teachers’ salaries – of up to six months in many cases.  There have been frequent industrial disputes and strike actions by university teachers, often protesting the lack of basic school equipment – particularly for science and technology education, decaying infrastructure and deplorable school environment, as well as poor conditions of service. There have been shameful widespread cases of primary and secondary school pupils using tree shades as their classrooms. The situation is seems to be getting worse with time: on January 2018, a civil society organization, BudgIt, published depressing education statistics in the Thisday newspaper showing that only 7.04% of the 2018 budget was allocated to education compared to 15 – 20% recommended by UNESCO; the percentage of education budget to the total declined from 9.17% in 2016 to 7.31 in 2017 and to 7.04% in 2018; out of the over 1.74 million who apply for higher education, only about 420,000 or 25% have a place.

 

11. The import of these recent figures is not just that government has no capacity to fund education along the existing framework or non-framework, but also that the inadequacy of funding is grossly understated because it is based on the requirements and demands of low actual enrolment figures, whereas the actual demand for enrollment is four times as large. Similarly, about 9 million school age children are estimated to be out of school (Nwoko, 2015: 2) and, therefore, not part of the existing burden on resources available for education. In view of these facts, the incapacity of government funding for education along the existing method is very extreme and calls for a more or less revolutionary change.

 

12. Closely related to poor funding is unstable policy which has not allowed the development of a pattern, which relevant stakeholders could respond to and structure their participation accordingly.  For example, in the absence of a clear policy on which tiers of education could be considered largely the responsibility of the government and which could be left largely  for private enterprise, it has been difficult for private investors to take a long-term position in the sector. We will elaborate on the reasonable responsibility of the private sector in the funding of education in the Section C of this paper, where the solution framework will be evolved.

 

1.     Explaining the Factors Responsible: Weak Economy;     Unreliable Funding Base
2. It would be unrealistic to dispute the commonly-held view that poor performance of Nigeria’s education sector in general and its funding problem in particular could be traced to policy and strategy instability and inconsistency, inefficient management, wastages and leakages. For example Nwoko (2015:15) has reported that about 40% – 45% of domestic funds meant for basic education is “misused”. However, there is need to go beyond these set of process problems  and recognize that there are overriding macroeconomic conditions, structural rather than process-derived, which have determined the fate of the sector. These are the growth of the economy and the nature of public sector revenue base.

 

14. If an economy is not growing at a reasonably high and sustainable rate, relative to its population dynamics, it will not have the resources to fund a largely-social service sector such as education.  In the case of Nigeria, unexceptional average GDP growth for most of the years since 1970, with even several years of negative growth, accompanied by high base population of about 182 million in 2017, growing at an average rate of about 2.7 % per annum, would imply severe resource constraints, which could lead to poor resourcing of social sectors such as education. The problem is exacerbated by the youth population pressure: out of a population of about 182 million, 43% are in ages 0 – 15, while about 19.48% are of ages 15 – 24. Compare this with the situation in advanced economies in respect of ages 0 – 15: United States, 28.6%; Norway, 27.3%; Germany, 19.6%; Canada, 23.5%; and, Japan, 21.1%. Even some forward-looking Gulf countries have lighter youth population pressure: U.A.E., 16.4% and Qatar, 18.6%.

 

15. In addition, more sustainability risk is embedded in the composition of Nigeria’s public revenue. Since the 1970s, government depends heavily on oil for an average of about 80% of its total revenue, while non-oil revenue contributes much less – an average of about 20%.  The problem with this revenue structure is that oil revenue on which the Government depends heavily is highly exposed to the volatilities which characterize the price of oil in the international market.  Such derived fluctuations in the dominant revenue item of government means that without careful planning and optimal programming of public expenditure, the implementation of government projects and programmes would be subject to frequent disruptions and distortions.

 

16. This, indeed, has been the case as government expenditure, including in education, has been pro-cyclically driven by movements in oil revenue.  During periods oil boom, the government has proceeded to spend as if the current pattern and level of revenue were sustainable. Therefore, when oil prices collapse, the government is unable to continue on the high expenditure curve. This leads to an abrupt drop in expenditure and abandonment or stunting of projects and programmes.

 

17. Borrowing from Friedman’s Permanent Income Hypothesis (1957), in his book, Stable Growth & Foreign Exchange Nwankwo (2011: 22 – 45), has argued that the appropriate expenditure pattern that would have ensured sustainability of expenditure, including education funding, would be such that conserved a significant portion of “observed changes” in oil revenue, while considering only a small fraction of the excess as part of the current income that could be spent during the same current period.  It is based on the permanent income so defined, that the government could effectively scope its education programme and the appropriate funding strategy to achieve sustainability.

 

18. Indeed, an examination of the records shows that the Nigerian Government has tended to embark on ambitious education programmes in spontaneous response to oil booms.   In 1973 – 1979 Nigeria experienced the first oil boom as a result of the Arab oil embargo against the U.S.A. In 1990, there was a second oil boom because of the Gulf war and the United Nations trade embargo on Iraq and Kuwait. A third oil boom started from 2003 fuelled mainly by galloping economic growth and attendant high energy demand in several emerging economies, spectacularly, China. It was in response to the windfall revenues resulting from the 1973-1979 oil boom that the Nigerian Government in 1976 introduced the Universal Primary Education.  This laudable programme caused a dramatic expansion in the supply and demand for educational services at the primary level.  But the financial resources became inadequate, particularly following the collapse of oil prices in 1982 – 1986, 1998, 2008 and, 2014 – 2017.

 

19. A summary of the problem, therefore, is that not only has the quantum of resources the economy can afford to devote to education been inadequate and its availability unreliable, but also the management of the resources have been grossly non-intelligent and crisis-prone and, therefore, ineffective as evidenced in the pattern of expenditure of the volatile oil revenue. In addition, the approach to funding Nigeria’s education sector has not been dynamic because there has not been any far-reaching change to reflect the experiences of crisis, instability, inefficiencies and structural distortions, as well as the unique challenge of the preponderance of the unwritten principle of balance of insincerity accentuated by the conditions of a federalism infested with centripetal forces. To address the problem, therefore, the underlying analysis must be governed by the acknowledgement of the two types of deficits: structural resource deficit and managerial deficit, which together constitute the constraints within which we can develop a solution framework.

 

1. Advancing Solutions
2. The most popular recommendation by scholars for addressing the challenge of inadequate funding of Nigeria’s education sector include the need to: increase budgetary allocation to education (Oralu and Oladele, 2015: 261); streamline participating government agencies to minimize duplication of functions and enhance coordination (Nwoko, 2015: 7); and, improve governance and confront fraud and wastages of funds (Oralu and Oladele, 2015: 2618). However, these recommendations tended not to appreciate the need for structural changes that could address these problems in such a way that the resulting funding outcome becomes sustainable.

 

18. To facilitate the identification of the appropriate funding approach for education, and taking into account the nature of the problem as outlined in the preceding section, we need to answer the question: What type of product or good is education? However, this characterization of the product nature has to be country specific because the appropriate determination of what type of good education is should reflect the economic and social system, the level of development of the country, the degree of economic productivity and generation of surpluses that could be channeled to the social sector and development priorities, as well as the quality of its economic management – in terms of technical competence, leadership sincerity and sufficient consensus around common national goals.

 

19. Generally, education is both a private good and a public good. It is a private good because it is a process of investing in the development of labour (human resources), which is one of the factors of production and which earns income in exchange for its contribution in the production process.  In this sense, one could conclude that education can be appropriately funded in the context of the market demand and supply framework. Alternatively, however, education is also a public good. Among the reasons for this is that an educated population is considered, ceteris paribus, necessary for an orderly and civilized society required for the building of a viable democratic society. It is also an important factor for defining the national identity and a country’s location in the global scale of civilization. Accordingly, from this perspective, education does not just confer some benefits on the individual but also on the community. That is, education is considered to have significant positive externalities.

 

20. This line of thinking, that is, recognizing education as both a public good and a private good, leads to the issue of what should be the appropriate degree of allocation of different levels of education funding between the private sector and the public sector, in order to achieve sufficient adequacy of funding. Though there is no fine line of demarcation, it seems reasonable, taking into account the constraints imposed by both resource and governance deficits, to suppose that for a developing country like Nigeria, basic education, (that is primary, junior secondary and senior secondary) is largely a public good, while tertiary education is relatively more of a private good. The funding philosophy implication of this categorization, given the resource constraint which the country currently  faces is that basic education is a citizen’s right, which the government has a responsibility to fund, whereas while government should facilitate access to tertiary education, it may not be obligated to funding it. It should be clarified that even for basic education, which is identified as a public good, the private sector should not be excluded from supplying education services as an alternative or supplement to public supply.

 

21. What then are the specific demand and supply models that could be derived from the characterization based on the private-public nature of education?

 

22. For basic education, which is considered a largely public good, the government is to play a proactive role in supplying education services sufficiently, as well as in ensuring effective demand. Ensuring effective demand implies mobilizing school-age population to undertake education and ensuring that all those so mobilized are adequately resourced to participate. The simplest way a government does this is by making basic education compulsory and free, implying that capital and recurrent costs of supplying the service are defrayed not by the household but by the government from the public treasury. In addition, to give effect to the provision that the private sector is not excluded from supplying basic education, the government would also provide the enabling environment – regulatory, incentives (such as tax breaks) etc, to encourage private sector investment in basic education.

 

23. For the private sector component of basic education, demand for the service would depend on the purchasing power of the households who prefer such a service to the option available from the government.

 

24. For tertiary education, the policy and strategy of government need to focus on providing the incentives and the enabling environment generally, for the private sector to supply education. The role of government would include the provision of appropriate legal and regulatory framework, as well as the provision of infrastructure and fiscal incentives such as tax breaks. On the demand side, individual citizens and households rather than the government will be responsible for carrying the cost of the services they demand.

 

25. It is important to note that assigning tertiary education to market demand and supply does not in any way underrate the importance of high-level education for the rapid economic transformation goal of the government. The dichotomy in terms of public funding between basic and tertiary education only reflects the reality that for various reasons, the public sector is incapable of funding all levels of education in a sustainable manner; it therefore, indicates how funding responsibilities should be allocated to ensure adequacy, effectiveness, dynamism and reliability. When government focuses its limited capability on basic education, it will be feasible to ensure a strong education base, so that products of secondary schools will be of such a high quality that they would have acquired the knowledge and skills to participate actively in the economic and social process because the senior secondary curriculum should emphasize acquisition of skills (such as tailoring, welding, auto  repairs, plumbing) , while those proceeding to tertiary education would have been properly prepared for the higher academic challenge.

 

26. Under this framework, government will still need to get concerned about ensuring that a greater number of citizens have the opportunity to gain from higher education. Accordingly, such schemes as open university, e-learning and other forms of long-distance, non-physical presence learning would be encouraged. Such programmes offer flexibility and affordable cost education that will ensure that inability to provide funds does not constitute a major inhibition to citizens who wish to undergo further studies after their basic education.

 

27. Existing evidence shows that educational institutions (primary, secondary and tertiary) owned by the private sector and run on commercial principles are viable in Nigeria and that they can boast of relatively better quality of products. Already the private sector is active in supplying tertiary

 

TABLE 2: Ownership of Tertiary Education Institutions in Nigeria, 2017

 

	Federal	State	Private	Total
Universities	40	39	59	138
Polytechnics	24	39	25	87
Colleges of : Education, Agric., Health; Technical Colleges	91	171	140	402
	155	248	224	627

 

Source: Derived from Nwoko, C. (2015), Financing Education in Nigeria: Country Case Study for the Oslo Summit on   Education for Development, Oslo, 6^th – 7th July, 2015, p.13.

 

education services as shown in Table 2: as at 2017, out of the 627 tertiary institutions in the country universities, polytechnics, colleges of education, health and agriculture and, technical colleges), 155 were owned by the federal government, 248 by State governments and 224 by the private sector. Unlike their private sector-owned counterparts, existing government-owned tertiary education institutions still face extreme funding difficulties in having adequate recurrent funding and in maintaining the quality of the physical assets needed to deliver qualitative education.

 

28. In view of the ownership and control restructuring implicit in the proposed framework, it will be necessary to consider a viable arrangement that would ensure optimal use of the existing fixed assets of public tertiary education institutions to enhance sustainable funding, while ensuring adequate number of quality tertiary education graduates. Such an arrangement would be more so desirable if it also helps to address the concern of affordability, particularly for students with poor financial background.

 

29. An arrangement that would capture all these elements would be  one which concessions the fixed assets of public tertiary institutions to private sector operators. Based on proper valuation of the assets, the government would expect considerable fees, which could be transferred to deserving students in the form of lower charges by the private operators or which could be collected and disbursed by government as subsidies or scholarships to deserving indigent students. Moreover, if one takes into account the resources of the existing education funds with statutorily guaranteed and predictable inflows such as the Tertiary Education Trust Fund (TETFUND), one can imagine that there is a plausible option of establishing a grand fund management scheme, which can independently and sustainably resource the type of tertiary education financing arrangement being recommended.

 

30. Under this model for funding education, investors should be expected to raise money from the capital market to finance the huge capital investments required. The equity segment of the Nigerian capital market is adequately deep and well developed that investors should be able to raise required equity finance for funding the development of tertiary and basic educational institutions. Prospective investors could also issue debt instruments to raise debt money. Debt financing of projects and programmes is a viable option and complement to equity funding following the continuous progress made in both the primary and secondary segments of the bond market over the past fourteen years during which the Debt Management Office successfully introduced a variety of debt instruments, including conventional bonds, savings bonds, sukuk and green bonds. In addition Nigeria has firmly established access to the international capital market with the issuance of several eurobonds and a diaspora bond, all listed both at the London Stock Exchange and the local exchanges, namely, the Nigerian Stock Exchange and the FMDQ OTC Exchange.

 

31. The existing and evolving bond market framework also provides the appropriate platform for financial market operators to design and develop financial instruments, dimensioned to suit the funding of the business of education. Such customized instruments could include Education Mutual Funds and Education Investment Trusts.

 

32. Another way a market-driven tertiary education system can be made more viable is for tertiary institutions to introduce more flexible Academic Credit Plans (ACPs), combined with work opportunities for regular students. Universities and colleges should integrate commercial businesses into their system, with a view to having students as the core work force of the business enterprises. This option would enable students to earn income and smoothly fund their way through quality education. As part of this strategy, an option could be introduced so that academic programmes could be elongated by 2-3 years, so that students who so opt, can spread out their academic load over a longer period and the burden of tuition fees spread out accordingly. This option should be considered with long-distance, open university and e-learning options, which have been recommended earlier.

 

33. Collateral gains from this arrangement would include minimization of governance challenges and politically-driven, often unjustifiable decisions. As has already been noted, it is estimated that about 40% – 45% of funds allocated to education is “misused”, diverted, misapplied or misappropriated due to government ownership, control and running of educational institutions (Nwoko, 2015:15). Reduction of the space covered by government in education will greatly check this type of entrenched malady.

 

1. Aligning the Solution with the Constitution of the Federal Republic
2. It would be pertinent to relate the foregoing model to the provisions of the country’s Constitution, regarding the allocation of responsibilities for the various levels of education to the tiers of government. Nigeria operates the federal system of government and currently has one central government (the Federal Government), thirty six State Governments and seven-hundred-and-seventy-four Local Governments.
3. The Constitution of the Federal Republic of Nigeria (1999) has a number of provisions relevant to education. Chapter II, Section 18 states that:

(1) Government shall direct its policy towards ensuring that there are equal and adequate educational opportunities at all levels.

(2) Government shall promote science and technology.

(3) Government shall strive to eradicate illiteracy; and to this end Government shall as and when practicable provide –

(a) free, compulsory and universal primary education;

(b) free secondary education;

(c) free university education; and

(d) free adult literacy programme.

The Second Schedule, Part II (Concurrent Legislative List), Section 27-30 states that:

(27) The National Assembly shall have power to make laws for the Federation or any part thereof with respect to university education, technological education or such professional education as may from time to time be designated by the National Assembly.

(28) The power conferred on the National Assembly under paragraph 27 of this item shall include power to establish an institution for the purposes of university, post-primary, technological or professional education.

(29) Subject as herein provided, a House of Assembly shall have power to make Laws for the State with respect to the establishment of an institution for purposes of university, technological or professional education.

(30) Nothing in the foregoing paragraphs of this item shall be construed so as to limit the powers of a House of Assembly to make Laws for the State with respect to technical, vocational, post-primary, primary or other forms of education, including the establishment of institutions for the pursuit of such education.

The Fourth Schedule, Section 2, lists among the functions of a local government, “the provision and maintenance of primary, adult and vocational education”.

36. From the foregoing, a number of observations could be made:

(i)     The constitution requires that, subject to the availability of resources, all three tiers of government should, jointly, aim at providing education free at all levels.

(ii)     The central legislature (the National Assembly) is empowered to make laws on tertiary but not on basic education and the power it has could be exercised by it for all tiers of government. On the other hand, the State Legislature (House of Assembly) can legislate over both tertiary and basic education but such power can be exercised by it over the State and its Local governments.

(iii)     While the constitution includes basic education among the functions of a Local Government, it does not explicitly exclude it from providing tertiary education. Indeed, by virtue of Second Schedule, Part II, Section 29, together with Fourth Schedule, Section 2 (d), the State House of Assembly could legislate for a Local Government to provide tertiary education.

(iv)    Both the Federal and State tiers of Government are explicitly conferred with the function of providing tertiary education.

(v)     The State level of Government is additionally explicitly empowered to provide technical, vocational and primary education (Second Schedule, Part II, Section 30) – in addition to tertiary education.

37. It could be concluded from these observations that within the ambit of the existing Constitution:
38. The Federal Government has powers to provide tertiary education but not basic education.
39. A State Government has powers to provide both tertiary and basic education.

• A Local Government has power to provide basic education. (But the House of Assembly has the power to legislate for a Local Government to provide tertiary education as well).

Confusing and Stressful Legal Provisions

35. The manner in which the Constitution has allocated responsibility for the provision of education to the three tiers of government is defective because it does not seem to have been based on sustainability considerations, and so did not factor in the fact that education has private and public good dimensions. It tended to ascribe each tier of government to a particular level of education, in a vertical manner (Tertiary to Federal Government, Tertiary and Secondary to State Government and Primary to Local Government), whereas one would wish to posit that based on the sustainability criterion, all tiers of government are similar in terms of a rational approach to, and relationship with, the process of production of education, regardless of the level. That means that the appropriate allocation should be cross-sectional or horizontal. On the other hand, there ought to be a vertical allocation between government and the private sector: with private sector leading responsibility for owning, controlling and funding tertiary institutions, while the public sector plays the lead role in funding basic education. It could be said that it is this conceptual mis-link that has rendered the implementation of the existing arrangement unsuccessful. It is because the arrangement is unrealistic, that we have in practice a funding arrangement which deviates fundamentally from the provisions of the constitution: for example, there is obvious intrusive intervention by the Federal Government in primary and secondary education, contrary to the provisions of the Constitution.
36. In view of this, the Constitutional provision should be amended to reflect sustainable supply and funding options. This implies that the constitutional allocation of functions to the three tiers of government, when aligned to the model espoused in this paper, would lead to a number of considerations.
37. First there should be a vertical allocation of responsibility for funding education between the private sector (tertiary) and the public sector (basic). Second there should be horizontal participation of all tiers of government in funding all tiers of basic education, thus:

(i)    For basic education, the three tiers of government will provide funding in an agreed proportion. An appropriate relationship would be worked out such that while all three tiers contribute to funding and participate in establishment decisions, the actual operation of the institutions will be by the State and Local Governments. The Federal government ought to be strong in funding basic education because basic education has a strong positive neighbourhood effect in terms of enlightened citizenship, which is essential for building a united nation and a progressive economy.

(ii)    For tertiary education, all tiers of government will appreciate the need to allow the private sector play the lead role as providers. The model of providing the enabling environment and incentives to private investors in education, as espoused in Section D of this paper, would apply to each tier of government. Thus, while the Federal Government will have its framework for encouraging private investment for tertiary education throughout the Federation, each State Government and each Local Government will do same in its area of jurisdiction. Similarly, each government will support the demand for tertiary education to its circle of citizens, using the types of incentives (scholarships, subventions, etc) earlier suggested.

• The Federal and State Governments will rationalize the use of capital assets of their existing tertiary institutions, by transacting out their uses to private entrepreneurs as already discussed, while using the fees earned to establish commercially- and independently-run fund management schemes the  returns from which would be used to support their deserving citizens defray the cost of quality tertiary education. In summary, all tiers of government share the same nature as agents in the education production process and should relate similarly to each level of education. This inherent reality should be reflected in the allocation of education functions to the three tiers of government in the constitution.

In addition, the need for the private sector to play the primary role in owning, controlling and funding tertiary education should be recognized by the constitution.

1. Conclusion
2. In conclusion, a sustainable option for funding education in Nigerian could be charted as follows:

(i)    Government, recognizing basic education (that is primary education, junior secondary education and senior secondary education) as a public good, accepts the responsibility of providing it free to all citizens. In essence, government aims at guaranteeing the supply, as well as the demand for basic education.  All three tiers of government will take responsibility.

(ii)    For tertiary education, the private sector is to be incentivized to invest in and operate the provision of education, based on market demand and supply framework. The private sector would be encouraged to mobilize investment capital from both the equity and debt segments of the market;

(iii)    To ensure adequate funding of tertiary education, the government wills concession the existing capital assets of its tertiary institutions to private entrepreneurs, whilst using the concession fees received to establish an independent, self-supporting, market-operated fund to generate a reliable flow of revenues which will be used to support deserving indigent students.

Such a funding architecture for education funding will be sustainable in terms of adequacy, effectiveness, dynamism and reliability

 

39. Going forward, there will be need to amend the Constitution of the Federal Republic so that the mapping of responsibilities for education to the three tiers of government is effected horizontally, rather than vertically. On the other hand, implicit in the framework proposed, the allocation of education funding responsibilities between the public sector and the private sector, would be vertical: while the public sector will be mainly responsible for the funding of basic education, the private sector will be majorly responsible for the funding of tertiary education.

 

(P.S.: To give practical effect to the proposed framework, I wish to propose that the BUK partners Abraham Strategies Limited to secure a consultancy mandate from the government to develop and deploy the framework.)

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Nwoko, C. (2015). Financing Education in Nigeria: Country Case Study for the Oslo Summit on Education for Development. Paper presented at the Oslo Summit on Education for Development, 6 – 7 July, 2015, Oslo.

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• Dr. Nwankwo is the Executive Chairman, Abraham Strategies Limited (Former Director-General, Debt Management Office, Nigeria)