Public Finance and Higher Education in Nigeria

Public Finance and Higher Education in Nigeria


Public Finance and Higher Education in Nigeria


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Chapter One of 



Public funds are those funds meant for the public use (Corbally, 1962, Osuntokun, 2003). It involves the financial activities of the government like borrowing, lending, taxing, etc as well as the expenditure involved in staff salaries, equipment and maintenance of educational institutions (Adesua, 1981, Charles, 2002). Financing of education is a sub of public finance dealing with the sources of finance, the amount allocated for material and human resources and the proper utilization of those funds. Financing of education is an important aspect of Economics of education and its importance cannot be over emphasized (Akangbou, 1986, Adeyemi, 1998).

Finance is the life-blood of any organization. Adequate financing helps in the purchase of equipment and paying of staff’s salaries; and to a very large extent it contributes to the productivity of an organization.

Education is very vital for the mental, social, political and economic development of an individual. It provides a person with the knowledge and skills needed to fit and contribute meaningfully to the society (Olaniyi and Adams, 2003). Education enhances the quality of life of an individual and the development of the society. Considering how important education is to national growth and development of a nation, it is very imperative that the government provides adequate financial and competent human resources to aid the quality of education of its citizens. This is the more reason United Nations Educational Scientific and Cultural Organizations (UNESCO) placed a standard of 26% of any nation’s budget should be allocated to the education sector, and it considers anything below it as being inadequate for education funding.

Education in Nigeria is deteriorating on a daily basis due to inadequate funding. This problem increases even as the number of students at different levels of education increases; and this could be tied to the fact that the government is the main source of revenue for the funding of education at all levels and so because of that it tries to subsidize it.

According to Babalola (1995), he asserted that funding of education in Nigeria is carried out by the government based on the fact that private individuals may not contribute meaningfully and also that the poor may not enjoy education if financed by private individuals, therefore the government decided to take it on its shoulders to do that.

In addition, the government believes that financing higher education (tertiary education) will help drive the economy based on its output.

Inadequate funding of higher education is eating deep into the system and it is affecting the management of higher education, the lecturers, and even the students. Due to inadequate funding, lecturers keep embarking on strikes (ASUU), the increase in unemployable graduates and indiscipline among students.

Higher education in Nigeria is divided into public and private; where the public education involves the state and federal tertiary institutions while the private education involves tertiary institutions owned by individuals. The federal government of Nigeria in 1993 deregulated the tertiary education, in other to allow private ownership of tertiary institutions. Other types of higher education include the polytechnics, colleges of education and professional institutions. The various higher education in Nigeria have internal representatives appointed by the government to man their activities, alongside supervisory bodies like the National Universities Commission for the universities, the National Board of Technical Education for the Polytechnics and National Commission for College of Education for the colleges; the serve as a channel between the government and the institutions in terms of funding. The main purpose of funding these institutions is to motivate the lecturers and provide the students with the needed facilities the need to aid learning. However, it is obvious that in the funding of higher education in Nigeria by the federal government, some higher education tend to be more funded than the others (Okebukola, 2002).

Hinchiliffe (2002), pointed that federal budgetary allocation to education in nominal terms rose from =N6.2 million in 1970 to =N1, 051.2 in 1976. Thereafter, it declined to =N667.1 million in 1979, rose again to N1,238.5 million in 1980, declined in succeeding years before rising to N3,399.3 million in 1989. It dropped further to =N1, 553.3million in 1991 before rising gradually to =N9, 434.7 million in 1994. Thereafter, the declining trend continued.

In consideration of the above, Nigeria is currently faced with poor development of manpower as the number of prospective students to the higher institution is high (JAMB 2001).

In conclusion, it is a known fact that the education system in Nigeria is greatly faced with insufficient funding, down to the point that the 10% internal revenue the university is meant to generate it still cannot generate it. This study aims at reviewing the public finance of higher education in Nigeria as it is the core duty of the federal and state government to fund the universities.


Currently in Nigeria, the state of higher education is fast decaying because of insufficient funding. Due to this, lecturers are leaving tertiary institutions in Nigeria for better offers outside the country. Those who are still in the system keep embarking on incessant strikes year in and out. They come to class out of their own will and volition, and even late to class. Insufficient funding is seriously affecting teaching and learning in tertiary institutions.

However, as a result of insufficient funding of higher education, essential teaching and learning services are not provided to the students. Most tertiary institutions in Nigeria do not match theory with practice in their teaching, thereby leaving the students unequipped for the labour market. Classrooms are in dilapidated states, laboratories are not equipped and libraries suffer same.

Another problem of public finance of higher education in Nigeria is the case of corruption. It is observed that funds allocated for higher education is either embezzled or diverted into personal purse by those supervisory agencies in charge of higher education; thus, abandoning mapped projects.

Bearing the above points in mind, the government of Nigeria has never met up to the 26% standard for education funding by the UNESCO, making the funding of education in Nigeria inadequate that it cannot meet its needs.

These are the problems associated with poor funding of higher education in Nigeria, and this study aims at recommending ways of solving them.

OBJECTIVES OF THE STUDY                          

 The major objective of this study is public finance and higher education in Nigeria.

Other specific objectives include:

a)   To examine the effect of public finance on the productivity of higher education in Nigeria.

b)   To examine the significant relationship between finance and education.

c)   To identify other means apart from the government for financing higher education in Nigeria.

d)   To identify problems associated with public finance of higher education in Nigeria.

e)   To suggest ways of utilizing funds allocated for higher education in Nigeria.

RESEARCH QUESTIONS                             

 The following research questions are generated to guide this study:

a)   What is the effect of public finance on the productivity of higher education in Nigeria?

b)   Is there a significant relationship between finance and education?

c)   What are the other means apart from the government for financing higher education in Nigeria?

d)   What are the problems associated with public finance of higher education in Nigeria?

e)   What are the ways of utilizing funds allocated for higher education in Nigeria?

RESEARCH HYPOTHESIS                  

H0:   There is no effect of public finance on the productivity of higher education in Nigeria.

H1:   There is an effect of public finance on the productivity of higher education in Nigeria.


This study is meant to inform, educate and enlighten the general public, most especially the government on the importance of public finance and higher education in Nigeria. it is meant to bring to the knowledge of the government that they need to step-up on the funding of higher education in Nigeria.

This study will be of immense benefit to other researchers who intend to know more on this topic and can also be used by non-researchers to build more on their work. This study contributes to knowledge and could serve as a guide for other work or study.


This study is restricted to public finance and higher education in Nigeria.

Limitations of study

1.        Financial constraint– Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

2.        Time constraint– The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.


 PUBLIC FINANCE: This is the study of the role of the government in the economy. It is the branch of economics which assesses the government revenue and government expenditure of the public authorities and the adjustment of one or the other to achieve desirable effects and avoid undesirable ones.

HIGHER EDUCATION: Higher education, post-secondary education, or third level education is an optional final stage of formal learning that occurs after secondary education. Often delivered at universities, academies, colleges, seminaries, and institutes of technology, higher education is also available through certain college-level institutions, including vocational schools, trade schools, and other career colleges that award academic degrees or professional certifications. Tertiary education at non-degree level is sometimes referred to as further education or continuing education as distinct from higher education.

UNITED NATIONS EDUCATIONAL, SCIENTIFIC AND CULTURAL ORGANIZATIONAL (UNESCO): Is a specialized agency of the United Nations (UN) based in Paris. Its declared purpose is to contribute to peace and security by promoting international collaboration through educational, scientific, and cultural reforms in order to increase universal respect for justice, the rule of law, and human rights along with fundamental freedom proclaimed in the United Nations Charter.



Corbally, J. E Jr. (1962) School finance, Boston: Allyn & Bacon, Inc.

Osuntokun, J. (2003) “Financing higher education” Lagos: The Comet 4 (1266) Thursday, January 2, p 14.

Adesua, A (1981) “Education finance in Nigeria” in Introduction to educational planning S. Adesina (ed) Ile-Ife, University of Ife Press, 115. 122.

Charles, H. (2002) “MPs should work on better education funding” Lagos: Vanguard Education & Manpower, Thursday December 19. 23.

Akangbou, S. D (1986) “A review of research in the economics of Nigerian education” Aspects of Nigerian educational research literature (ed) P. Obanya, T. Ehiametalor & S. Olaitan. Benin: Nigerian Educational Research Association University of Benin, 78-90.

Adeyemi, T. O (1998) “School and teacher variables associated with the performance of students in the senior secondary certificate examinations in Ondo State Nigeria” Unpublished PhD Thesis, University of Hull, United Kingdom 30-38.

Olaniyi A, Adam O (2003). Public expenditure and human development in Nigeria.

Babalola JB (1995). Educational Costs and Financing Analysis. External Studies Programme, University of Ibadan. Mimeograph.

Okebukola, P.(2003). Issues in Funding University Education in Nigeria. NUC Monograph Series. Abuja: National Universities Commission.

Hinchliffe, K. (2002). Public Expenditure on Education in Nigeria. Issues estimates and some implication. Washington D. C.: World Bank

JAMB (2001). National University Commission Annual Report.

Kaduna: The Regent Printing and Publishing Limited.




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