Nigerian universities are suffering from poor funding.

Ibekimi Oriamaja Reports

AS public universities in the country have been closed since February 14 this year due to strike action by staff unions whose demands are primarily financial in nature, findings by Vanguard suggest that the issue of inadequate funding may linger in the sector for some time. This comes at a time when the country is losing large sums of money in scarce foreign exchange as Nigerians study abroad.

The Federal Government, FG, allocated N355.47 billion to the 44 federal universities in this year’s budget, out of a total budget of N875.93 billion for the education sector. According to a document released by a civic organization, Budget, N326.9 billion of the N355.47 billion allocated to federal universities would go toward recurrent expenditure, including N320.7 billion for personnel costs and N6.1 billion for overhead costs. Only N25.5 billion is set aside for university capital projects.

The top five universities in terms of allocations are the University of Nigeria, Nsukka, which received N24.2 billion; Ahmadu Bello University, ABU Zaria, which received N22.6 billion; the University of Calabar, which received N19.8 billion; the University of Benin, which received N17.7 billion; and the University of Ibadan, which received N17.1 billion. The top five beneficiaries of capital projects in universities are: the National Open University, N2.6 billion; the Federal University, Lokoja, N1.7 billion; ABU, N1.6 billion; the University of Lagos, UNILAG, N963 million; and UNN, N900 million. However, it should be noted that a lack of funds may prevent the budget from being fully implemented.

Education Budgets in Other Countries: According to our correspondent, Nigeria budgeted N3.6 trillion for education in six years out of a total budget of N55.3 trillion. The time span is from 2016 to 2021. In 2016, N369.6 billion, or 6.7 percent of the total budget of N6.06 trillion, was allocated to public education. In 2017, N550 billion or 7.38 percent of the N7.29 trillion budget was allocated to education, while in 2018, N605.8 billion or 7.04 percent of the N9.2 trillion budget was allocated to education. Education received N620 billion or 7.05 percent of the N8.92 trillion budget in 2019, and N671.07 billion or 6.7 percent of the N10.33 trillion budget in 2020.

Education received N742.5 billion, or 5.6 percent of a N13.6 trillion budget, in 2021. According to World Bank reports, Ghana allocated 23.81 percent of its national budget to education in 2015, 22.09 percent in 2016, 20.1 percent in 2017, and 18.6 percent in 2018. South Africa has increased education allocations from R246 billion or 16.7 percent in 2018, to R310 billion in 2019, R387 billion in 2020, and R416 billion by 2023/24.

Loss to other countries: According to the findings, the country loses billions of dollars in school fees to other countries each year. Nigerian students are primarily found in universities in the United Kingdom, the United States, South Africa, Ghana, Ukraine, Australia, and Russia, among other places. According to the Institute of International Education in the United States, Nigerian students will spend $514 million (about N2.5 trillion) on school fees in 2021. In addition, approximately 19,000 Nigerian students in neighboring Ghana spent approximately N250 billion on school fees last year.

A Ghanaian student pays an average of $276 in tuition, while a Nigerian student pays $4,647. The Central Bank of Nigeria recently announced that between 2010 and 2020, the country spent $28.66 billion on fees paid by Nigerian students studying abroad. That works out to $2.86 billion per year on average.

Tuition policies of the federal and state governments: At the lowest levels, the federal and state governments are supposed to provide free basic education, which means that pupils and students in public primary and public junior secondary schools do not pay anything. Pupils and students are also expected to receive free textbooks in key subjects such as English, Mathematics, Basic Science, Computer, and, depending on the state, Yoruba/Igbo/Hausa.

However, the majority of states have abandoned the program. In Lagos State, for example, the books were last distributed to schools more than six years ago. Students in schools have outgrown the available books, which are mostly torn or outdated.

At the tertiary level, the FG charges between N30,000 and N50,000 in university fees, excluding accommodation fees, whereas many state governments charge different fees depending on the course. A medical student at Osun State University, for example, may pay around N650, 000 per session. Students at Lagos State University, LASU, pay an average of N60,000 per session. To give an idea of how much money could be made from fees, consider the University of Nigeria, Nsukka, which has approximately 35,000 students and charges an average of N50,000 in fees, totaling N1.75 billion. The Federal University of Technology, Akure, FUTA, has approximately 5,000 students and charges an average fee of N30,000, for a total of N150 million.

Subventions from the government: The FG calculates subventions for federal universities based on staff strength, number of students, location, and other factors. That is, they do not receive the same amount from the government, though how much each receives is also determined by how deep the government’s pockets are at any given time. Some federal universities are still waiting for government take-off grants years after they were established. Last year, the Non-Academic Staff Union, NASU, and the Senior Staff Association of Nigerian Universities, SSANU, of Ekiti State University, Ado Ekiti, were forced to protest the school’s irregular payment of subventions. Their leaders, Comrades Kolapo Olatunde and Olojede Olayinka, also claimed that the school had not received a capital vote in ten years.
Annual cost of running a varsity: Opinions differ on how much it costs to run a university annually, excluding salary payments. This is because the size and nature of the courses play a role in determining the figure to consider. However, given that the FG typically allocates N4 billion as a start-up grant for newly established universities, one might be tempted to believe that this is sufficient. Furthermore, the leadership of the Academic Staff Union of Universities, ASUU, has requested that the National Universities Commission, NUC, require those who want to establish new universities to set aside between N30 and N40 billion as running costs for at least three years, which could imply that an average university may require around N10 billion to run annually.

Some university expenses include: The owner government pays staff salaries and provides facilities at state and federal universities alike. Some expenses, however, are borne by management. These funds are derived from internally generated revenue. The cost of electricity is one of them. There have been reports of power companies disconnecting universities from the national grid. Last year, Ikeja Electric did the same to Lagos State University, or LASU. UNILAG could serve as an example of the enormous responsibility that university administration bears. In about a year, UNILAG paid over N1.1 billion to Ikeja Electric as a power bill. The cleaning of hostels is mostly handled by schools.

How public universities are funded in other countries: In the United Kingdom, the government provides approximately 66% of research funding for its universities, while in South Africa, the government provides approximately 50%. In the United States, for example, 68% of students attend public universities, which are primarily supported by state and local taxes, which account for approximately 11% of total funding. Tuition, endowments, research grants, and other sources of funding are also available. This is because public universities rely on government funds because they lack the endowments and donation networks found at private universities. UCLA, or the University of California, Los Angeles, is a public university owned by the state of California that was founded in 1919.

UCLA’s Centennial Campaign: As part of the university’s centennial celebrations, it launched a $4.2 billion fundraising campaign, and by February 2020, it had raised more than $5.49 billion, 18 months ahead of schedule. The campaign was named one of the most ambitious fundraising campaigns ever undertaken by a public university in the United States. The university develops a yearly financial plan, though it is supported by the state, which provided it with a $1.42 billion research grant in 2020.

The university raised $611 million in funding for the 2020/21 academic year, far exceeding its annual target. That year, the school received donations from all 50 states as well as 72 foreign countries. A citizen pays an average of $33,104 for an undergraduate course at UCLA, while a foreign student pays more than $50,000. This is in stark contrast to the N30,000 (approximately $60) tuition at a Nigerian federal university. Furthermore, universities, whether public or private, receive generous donations from public-spirited individuals and corporate bodies all over the world. Michael Bloomberg donated $1.8 billion to a public university, John Hopkins University, in 2016, and public universities in South Africa received over $1 billion in donations in 2016/17.

The current situation in universities

Apart from the government, the Tertiary Education Trust Fund, TETFund, is the major financier and provider of facilities in Nigeria’s tertiary institutions. Prof. Elias Bogoro, the fund’s immediate past Executive Secretary, recently stated at an event in Lagos that the fund spent over N196 billion on facilities and other items in public universities over the last three years. The same amount was spent on polytechnics and educational colleges. He, however, lamented that while the Fund’s burdens continued to rise due to the establishment of new schools, the fund available to TETFund was decreasing, adding that while it expected N500 billion in revenue for 2021, it only received half of that amount, which he attributed to the impact of the COVID-19 pandemic on businesses.

Reforming the system: Mr Vincent Essien, a financial expert and public commentator, examined various approaches to funding and making university education more affordable in a paper titled: Reforming Nigeria’s Public University System. He proposed that university corporate structures be changed and that the funding issue be approached from a different perspective.

Corporate Structure: Nigerian public universities must rapidly transition to full and complete autonomy. The federal and state governments must relinquish ownership of public universities in order to bring on board other partners and stakeholders who can share the burden and stress, allowing all stakeholders to benefit more from an improved university system. First and foremost, we must examine the rationale for the government’s continued ownership and control of public universities, which carries the primary obligation of funding and sustaining these institutions. This is clearly an unsustainable obligation, and this position is currently endangering the future of the Nigerian educational system. What is the government’s main concern with the university system? This can be broken down into three categories.

Corporate Organizations: Let the federal and state governments identify at least two major corporate entities willing to serve as Trustees/Investors in our incorporated public universities in exchange for a guaranteed annual grant/support from their budget. In this regard, they may be exempt from the 2% Education Tax. They should also support universities with which they have an affinity or connection. For example, OLAM has a large farm investment with Nasarawa State University, and Larfarge has a large farm investment with Ogun State University. Emzor Pharmaceuticals, for example, can invest in a university’s pharmaceuticals department to drive research and development, entitling it to become a Trustee of the institution.
University infrastructure is being funded by private investors.

Companies willing to invest in critical university infrastructure for commercial returns, such as specialized programs, hostels, lecture theaters, drama and art theaters, sports infrastructure, and broadband infrastructure, among others. These investments entitle investors to become stakeholders and Trustees in public universities.

Alumni: University alumni should be automatically elected to the University Board of Trustees, with a commitment to support the university with a minimum amount of funding and management support each year in order to sustain the legacy and growth of their mother institution.

Student sponsors: Parents, guardians, and sponsors of students should have the right to a representative on the Board of Trustees to ensure that their children receive the quality education for which they have paid.

Community Representatives: The local community in which the university is located should have a representative on the Board of Trustees as well. Their representatives should be individuals who are willing to commit to financial support for the university. Using UNILAG as an example, the Oba of Lagos should be able to nominate a prominent industrialist and Lagos resident who will commit to supporting the university and representing the community’s interests. As the university’s Legacy Owners, a representative of the federal or state government. The university’s vice-chancellor serves as a representative of the university’s Senate. The Board of Trustees shall be the apex body of the university, supervising the activities of the institutions’ Senates as well as 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.

Staff members: All academic and non-academic university staff are employed by the respective universities, and their terms and conditions of service are unique to the university. There will be no parity in terms of service because each will be separate, independent, and distinct. In contrast to the current generalised system, ASUU will simply ensure that each university adheres to the terms agreed with its own staff.

Funding: Each public university will plan and forecast its budget based on its unique circumstances, which should include the following:
UNILAG, for example, has a student population of approximately 50,000. UNILAG has a federal subvention of N14 billion in the 2022 National Education budget, University of Ibadan has a subvention of N17 billion, and Ahmadu Bello University has a subvention of N22 billion. If UNILAG spent its entire subvention on student training, the cost would be around N280,000 per year (average school fees in UNILAG is about N55,000). UI has about 42,000 students, and if it spent its entire subvention on student training, it would cost about N404,000 per year (please note that school fees in University of Ibadan currently averages under N35,000)

Proposal: For a period of five years, if the FG’s total subvention to federal universities remains at N355.47 billion, as well as the specific subvention to each federal university, the FG should relinquish responsibility for paying university staff salaries to the employers of all university staff (the Incorporated Universities) acting through the Board of Trustees and implemented by the University. All discussion of IPPIS or UNTAS should be put on hold immediately. Each university should determine its own salary structures and hire staff based on their unique characteristics, so UNILAG and University of Jos employees cannot and should not be on the same pay scale. All universities can be incorporated within a six-month emergency period.

Current university subventions: The current FG subvention to public universities will be maintained but converted into student loans tied to a specific number of students per university. We also anticipate that a maximum of 70% of students within a university’s quota or carrying capacity will be eligible for Student Loans.

A student loan is a grant given to deserving students each academic year, with the loan repayable upon graduation from the institution. The loan is only for the expected years of study and cannot be extended if the student does not complete the studies. A resit year, for example, will not be eligible for Student Loan coverage.
The loan is divided into three categories: tuition, housing, and living expenses.

Consider the 2022 Subvention figures for UNILAG (N14 billion):
UNILAG – N14.1 billion
N55,000 for school fees
N25,000 for hostel fees

If the FG made a provision for N500,000 in student loans to UNILAG, 34,000 students from the current student population would be eligible to benefit from the program, accounting for nearly 70% of the student population. If 30,000 student loans are made available, that would cover 60% of the university’s student population. It should also be noted that the overall costs for various courses of study will vary. It is important to note that student loan recipients will be able to complete their entire university course/program without having to pay tuition and housing in addition to monthly living expenses.

The N500,000.00 Student Loan is divided as follows:
Tuition is N200,000.00, and hostel fees are N120,000.00.
N180,000 for living expenses (N20,000 for 9 months)

For the other 20,000 students
This segment of the student population, who may not be eligible for student loans, will be required to pay statutory fees, which may or may not be equal to student loan fees.

However, keep in mind that this is only UNILAG’s position. This payment will most likely generate more than N11-12 billion for UNILAG, just from tuition and student-based payments. This does not include the anticipated investments by other investors brought on board as a result of the new University Corporate structure.