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
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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?
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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 Nigerias
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.
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Clusters of Higher Education Institutions There are three main
clusters of higher education institutions- colleges 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).
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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 privately- owned
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.
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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.
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A Focus on Universities: Trends in Funding Universities in
Nigeria
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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-of- living indices are factored into
the funding profile.
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Factors Shaping Change Political will State of the national
economy Action by staff and student unions
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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.
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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.
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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).
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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
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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/TETFund-
supported training.
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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.
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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.
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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.
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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
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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.
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Impact of Current Funding Models Inadequacy of funds
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Low Capacity for Utilisation of Available Funds for Capital
Development Low Capacity for Internal Generation of Funds
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Resultant Effects
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Towards More Creative Funding Models for the Nigerian
University System Governments 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
countrys 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.
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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
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The Proposed Models Access-Equity-Cost-Sharing Model
Contextualised Formula-Funding Model Performance-based Funding
Model Host-Proprietor-University-User- Funding Model
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Central Issue is Unit Cost U.C=TRC + TCC + SLE
---------------------- TSE Where, U.C=Unit Cost TRC=Total Recurrent
Costs TCC=Total Capital Costs SLE=Student Living Expenses TSE=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
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Table 2: Observed and Expected Unit Cost per Student per
Discipline (2012) DisciplineObserved Unit Cost (N) Expected Unit
Cost (N) Administration525,000719,250 Arts555,000760,350
Agriculture690,000945,300 Education555,000760,350
Engineering645,000883,650 Environmental Sciences 735,0001,006,950
Law594,000813,780 Social Sciences549,000752,130
Science615,000842,550 Medicine906,0001,241,220
Pharmacy735,0001,006,950 Veterinary Medicine735,0001,006,950
Management Tech510,000698,700
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The Models
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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.
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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
Nigerias socio-economic development. UTFN=PNAS+(CC X.02AUC X FST X
RA X GS).02AUC + K
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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
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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.
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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 near- global
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.