Financing Higher Education in
the Federal Republic
of Nigeria:
Developments and Trends
culled from:
http://www.gse.buffalo.edu/org/inthigheredfinance/region_africa_Nigeria.html
I. A Brief Description of
the Nigerian Higher Education System
The higher education system in Nigeria is
composed of universities, polytechnics, institutions of technology, colleges
of education that form part of, or are affiliated to, universities and
polytechnic colleges, and professional, specialized institutions (IAU, 2000).
They can be further categorized as state or federal universities, and as
first, second, or third generation universities (Hartnett, 2000:1). Federal
universities are owned and funded by the federal government, while state
universities are owned and financed by the states (there are 36 states). First
generation universities are the six universities established in the 1960s and
early 1970’s; second generation universities are seven universities
established in the mid 1970’s; while third generation universities refer to
the eleven institutions, including the universities of technology, established
in the 1980’s and 1990’s (Hartnett, ibid).
According to the Association for the
Development of Education in Africa (2000) there are 43 higher education
institutions in Nigeria: 11 state universities, 3 approved private
universities; and 29 federal universities including 3 agricultural
universities, 1 military university, and 4 inter-university centers.
Three levels of university education exist in Nigeria.
The university level first stage offers a Bachelor’s degree after a minimum of
three years and a maximum of six years (e.g. in medicine). The university
level second stage offers a Master’s degree following one year of
post-Bachelor’s study. The university level third stage offers the doctorate
degree two to three years after the Master’s. To gain admission into the first
level of university education, one has to pass the competitive University
Matriculation Examination (UME) (IAU, 2000).
Higher education in Nigeria can be further divided into the public or private,
and the university or non-university sectors. Public universities, owned by
the federal and state governments, dominate the higher education system.
Private universities and other tertiary education institutions are a recent
phenomenon. In recognition of the need to encourage private participation in
the provision of university education, the Federal Government issued a decree
in 1993 allowing private investors to establish universities following
guidelines established by the government.
[1] More than 60 applications have been received by the government from
private university sponsors since the decree’s promulgation. Of these, only 7
have been approved. [2]
The non-university sector is composed of polytechnics,
institutions of technology, colleges of education, and professional
institutions, most of them operating under parent ministries. There is no
sharp distinction between the university and the non-university sectors; most
of the institutions in the latter sector are affiliated with universities.
The Nigerian higher education system, in spite of
being Africa’s largest higher education system with nearly 400,000 students,
is unable to admit all qualified applicants every year (ADEA, 2000:3; Ajayi,
T., & Alani, R.A. 1996:23). For example, in the academic years 1990, 1991, and
1992, only 15.31 percent, 16.71 percent, and 14.73 percent respectively of the
applicants were able to gain admission through the Joint Admission and
Matriculation Board (JAMB) (Ajayi, T., & Alani, R.A. ibid). In 1998, just
35,000 new students were admitted to university study out of some 400,000
applicants (ADEA, ibid).
Numerus clausus is applied in admission to some
disciplines determined by the National Universities Commission (NUC) and
conditioned by the availability of instructional facilities at the level of
institution (IAU, 2000).
Three parallel strategies are being pursued in order
to expand access to higher education in Nigeria. First, distance higher
education programs are being established; second, good quality private
universities are being encouraged and third, plans are in the works to expand
all university campus enrollments to a maximum of 30,000 students (ADEA, op
cit.).
The participation rate in higher education is 395 per
100,000 persons. Women accounted for 34 percent of total enrollments in the
1997/1998 academic year. Female students also represented 35 percent of new
entrants in the same academic year, a significant increase from the 26 percent
recorded in 1988/89 (Hartnett, 2000:4).
The
Federal Government controls universities and other higher education
institutions through the following organs: the Federal Ministry of Education;
the National Universities Commission, which among other things allocates funds
to federal universities and also prescribes the spending formula, and the
Committee of Vice Chancellors of Nigerian Federal Universities, which acts as
a coordinating body and offers advice to government and universities governing
councils on matters of general and specific concern to higher education. Each
university is administered by a Council and a Senate, and is headed by an
appointed Vice Chancellor as CEO. Within universities and colleges, the
institutes and centers are more autonomous. The Academic Staff Union of
Universities (ASUU) safeguards the interests of the academicians in the
Nigerian university system.
II. Financing Higher Education in Nigeria
The Federal Government maintains a
policy of no tuition fees in federal universities while at the same time
allowing students enrolled in state universities to pay tuition fees in
addition to room and board. In May 2002, the Federal Government issued an
order “forbidding” the charging of tuition fees at all 24 federal
universities as these universities were contemplating charging tuition fees as
a cost recovery strategy. The Government believes that it has a duty to
provide qualified Nigerians with free university education. Before this
presidential decree, federal universities intended to charge a tuition fee
ranging from US$ 200-400 per semester.
[3] (See The Higher Education Chronicle, Tuesday May 28, 2002).
The Government through the National
Universities Commission makes it mandatory for all federal universities to
generate 10 percent of their total yearly funds internally through various
revenue diversification means (Odebiyi & Aina 1999: vii, 36).
The Education Tax Decree No. 7 of
1993 enforces the payment of 2 percent of profits of limited liability
companies registered in Nigeria as an education tax to be disbursed according
to the ratio of 50: 40: 10 to higher, primary, and secondary education
respectively. The share of higher education is further allocated to the
universities, polytechnics, and colleges of education according to the ratio
of 2: 1: 1 respectively (Ajayi & Alani op cit.). As of Summer 2002, no
information was available to show the amount of funds collected and disbursed
since the promulgation of the education tax decree. It is known that the
Education Bank was supposed to be a depository of the funds collected through
the decree.
All federal universities receive the
bulk of their financing (almost 95 percent) from the Federal Government
through the National Universities Commission (Hartnett, 2000: 1). Furthermore,
the federal universities’ budgeting processes and expenditures have to adhere
to budgeting and expenditure formula stipulated by NUC as follows: 60 percent
total academic expenditure; 39 percent for administrative support; and 1
percent for pension and benefits (Hartnett, ibid. 7).
At the general level, four sources
finance university education in Nigeria (Ogunlade, 1989: 523):
(a) support from federal and state
governments constituting more than 98 percent of the recurrent costs and 100
percent of capital costs,
(b) student contributions towards
living expenses on campuses constituting less than 1 percent of the total
operating costs of institutions. While there is no evidence to suggest this
percentage of students contribution is capped by the government, anecdotal
evidence suggest that successive administrations in Nigeria (civilian and
military) have been reluctant to charge more than nominal fees probably to
obtain and maintain public support. Charging realistic fees has been unpopular
among policy makers (Ogunlade, ibid. 525),
(c) private contributions by
commercial organizations in the form of occasional grants for specific
purposes, and,
(d) interest earnings on short-term
bank deposits and rents of university properties.
Other sources of finance to higher
education in Nigeria include endowments, fees/levies, gifts, and international
aid from international organizations. For example, the World Bank has financed
a US$ 120 million project titled: Federal Universities Development Sector
Operation (Odebiyi & Aina 1999: 28-29; Babalola, J.B., Sikwibele, A.L., &
Suleiman, A.A. 2000).
Cost Sharing Measures in
Higher Education in Nigeria
To respond to the problem of
chronic under-funding, Nigerian public universities adopted an array of cost
sharing measures, notable among them being the following:
Student contributions.
Student contributions are made through a multitude of fees: tuition in state
and private institutions [4] ,
acceptance, registration and certification, caution (equivalent to security
deposit in US), sports, identity cards, late registration, examination,
laboratory, transcript, and medical center registration fees. These fees vary
in amount paid from one university to another (Ajayi & Alani op cit. 12). In
all federal universities, undergraduates pay the following fees: examination
NGN 200 (US$ 3.7); registration NGN 150 (US$ 2.77); Students Handbook for new
students NGN 200 (US$ 3.7); accommodation (excluding food) NGN 90 (US$ 1.66);
hostel maintenance NGN 200 (US$ 3.7); sports NGN 150 (US$ 2.77); and
acceptance fees for new students NGN 300 (US$ 5.55). Other amount of fees
charged include: caution NGN 100 (US$ 1.85) for science students and NGN 150
(US$ 2.77) for arts students; students union fees NGN 60 (US1.11); medical
registration NGN 100 (US$ 1.85), identity card NGN 400 (US$ 7.40);
departmental registration NGN 50 (US$ 0.92) for parent department and other
departments NGN 25 (US$ 0.46), and library fees NGN 50 (US$ 0.92). Students
also are required to pay NGN 300 (US$ 5.55) for management information system;
NGN 200 (US$ 3.70) for examination results verification for new students; and
late registration NGN 1000 (US$ 18.51) (Prof. J.D. Amin, Personal
Communication, March 10 2002). Students’ contribution to university financing
for the period 1988-1994 ranged from 0.28 percent to 3.89 percent (Ajayi &
Alani op cit. 12).
Private sector contributions.
Contributions from the private sector to education in Nigeria are limited to
the endowment of prizes and professorial chairs, and voluntary donations.
Campaigns to raise endowment funds in Nigerian universities dates as far back
as the 1950’s when the University College, Ibadan started an endowment drive.
From 1988-1994, the University of Ibadan generated approximately NGN 22.02
million from endowments and grants, which was the highest during the period (Ajayi
& Alan op cit. 12). Decree # 9 of 1993 authorizing individuals and private
organizations to establish private higher education institutions has also
enhanced the private sector contribution to financing of higher education.
National Youth Service Corp
Scheme is another cost sharing measure adopted by the Federal Government.
The scheme was introduced in 1973 for graduates of universities, polytechnics,
and colleges of education. Participation is mandatory for holders of first
degrees and higher national diplomas from polytechnics and universities from
within and outside Nigeria who have not attained the age of 30 years (Ajayi &
Alani 1996:13). These graduates offer their services to the community/nation
for a period of 12 months for a monthly stipend of N 900. This scheme becomes
a cost recovery measure because these graduates do not collect full salaries
and allowances for the services rendered to the community that presumably
would have been paid for by the government or the community.
Student Loans in Nigerian
Higher Education
The Nigerian Student Loan Board was
first established in 1972. Between 1972 and 1991, it provided loans totaling
NGN 46 million (US$ 3.8 million) to help students finance undergraduate or
graduate studies within Nigeria and abroad (Chuta, 1992: 443). By 1992, the
Board had made loan awards of over N 46 million and faced the problem of
recovering outstanding loans over NGN 40 (US$ 3.34 million) leading to its
suspension (Chuta, 1992: 445; Ajayi & Alani 1996:4).
The Nigerian Student Loan Board was
replaced by the Nigerian Education Bank under Decree #50 of 1993. The roles of
the Education Bank are to: serve as a major intermediary in Nigeria’s
education credit market; harness private sector resources for the funding of
education; and take over part of the Nigerian government’s educational funding
responsibilities. The main and specific functions of the Nigerian Education
Bank are: student lending, lending for publishing, equipment leasing, project
financing, funds mobilization and provision of advisory services for
educational purposes (Chuta, ibid. 423). The Bank’s share capital is NGN 400
million (US$ 3.34 million) fully subscribed to by the Federal Government of
Nigeria. The long-term plan of the government is to privatize the Bank and
make it a stockholder-owned corporation (Chuta, ibid. 426).
Loans to undergraduates are designed
to place a likely debt burden on students ranging from NGN 24,000-NGN 32,000
(US$ 201-268) for four years in 1998. Within this range, student loans are
assumed to vary according to the type of course taken, duration, level (e.g.
professional, or non-professional), degree or non-degree. Loans are structured
to meet the higher costs of students in professional fields such as medicine,
law, accountancy, architecture, quantity surveying etc.
Other
functions of the Bank are to mobilize educational savings from parents and
teachers by advising parents to take out educational insurance policies and
initiate savings schemes for their children. The Bank also provides advisory
services and undertakes scientific research on economics and financing of
education; analyzes recurrent and capital costs of education, undertakes
cost-benefit analysis of educational investments; and advises on manpower
development issues. The First Bank of Nigeria PLC has also launched a new
product called First Education
Savings Scheme (FESS) that affords parents the privilege of providing their
children with quality education to any level in their quest for personal
development and achievements. [5]
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