Image Credit: The Brookings Institution

Education equips individuals with knowledge, skills, and competencies that are vital for economic productivity. A well-educated workforce is better positioned to access employment opportunities, increase productivity, and contribute to economic growth.

Education is a powerful tool for breaking the cycle of poverty, reducing income inequality, fostering creativity, critical thinking, and problem-solving skills, and enhancing social cohesion and equity. hence, the need for equitable access to quality education for all, regardless of their socioeconomic status, geographic location, or any other form of disadvantage.

Owing to Nigeria’s youthful demographic, accounting for about 54%, there is a tremendous strain on the education system, and a pressing need to restructure the educational system to promote (a more inclusive and sustainable) growth of not only the Nigerian economy but also her human capital.

Recognizing the need for investments in education as a tool for nation-building (as it can boost the human capital assets of individuals, reform the society and foster economic advancement for increased welfare), the United Nations Educational, Scientific and Cultural Organization (UNESCO) recommended a benchmark of 15-26% of the annual budget for education

However, Nigeria had their budgetary allocation to education below the UNESCO recommendation of 15% to 26% of GDP, with 5.14% allocated to

education in 2021; a positive annual change following 5 years of percentage decline as shown below.

 Barriers to Education Financing in Nigeria

Some funding issues and gaps are as follows; Dilapidated infrastructure, insufficient numbers of qualified teachers, resource shortages, and outdated curricula.

To close these funding gaps, a comprehensive approach is imperative! An approach that includes increasing the budget allocation for education, optimizing the utilization of funds, and diversifying funding sources.

The Three Pillars of Education Financing

1. Debt Financing

• A globally common practice to fund education.
• Nigeria’s government often turns to domestic and international loans to bridge funding gaps.
• Though it provides immediate resources for the education sector, it’s crucial to manage debt prudently to avoid overburdening future generations.
• Sustainable debt strategies should be explored, focusing on investments that generate long-term economic returns.

2.  Grants

• Funds provided by philanthropic entities.
• in Nigeria, grants play a vital role in augmenting the education budget.
• it is instrumental in improving infrastructure, enhancing teacher training, and implementing innovative educational programs.
• But Nigeria should strive for self-reliance and reduce dependency on external grants over time.

3.  Subsidy

• It is a key tool for ensuring equitable access to quality education.
• Primary Education: provision of free textbooks, school meals, and financial assistance to struggling families.
• Secondary Education: lowering the costs of uniforms, textbooks, and transportation. Scholarships and financial aid for the disadvantaged “many”
• Tertiary Education: Government scholarships, tuition fee waivers, and low-interest student loans can assist in this regard.

The FRN national policy (2013) in section eight stated that “Education is a capital-intensive social service, which requires adequate financial provisions from all tiers of government for successful implementation of its programs. The government’s goal is to make education free at all levels in addition to assistance from International and Local Development Partners, grants for research, and other donor agencies. The financing of education is a joint responsibility of the Federal, State/FCT, Local Governments, and the private sector.

Hence, each entity needs to reassess its roles in educational financing.

Role of Government, Private Sector, and NGOs

Government

• Education financing by increasing budget allocations.
• creating effective policies – pri & sec sch should be free.
• regulating the sector.
• Creation of education saving bond/sukuk
• Creation of perpetual educational sukuk models
• States to provide more land aside from another subsidy for education.

Private Sector

• Investing in education infrastructure
• Providing scholarships
• Supporting vocational training programs
• Fund One School initiative

NGOs

• Advocating for improved educational policies
• Providing support to underserved communities.
• Facilitating partnerships between stakeholders
• Fund one child initiative

Summary

Education is the cornerstone of inclusive growth. It equips individuals with the tools they need to participate in the workforce, escape poverty, and contribute to the economy. Furthermore, it promotes social cohesion, and gender equality, and reduces inequality. To achieve inclusive growth, it is imperative that we collectively invest in education, ensuring that it is accessible and of high quality for all. By doing so, we can build a more equitable, prosperous, and harmonious future for all members of society.

Contact

Phone: +2348177000140, +2348177000150

Email: info@trustarthurgroup.com

Office: 11, Oko-Awo Street, Victoria Island, Lagos.