Background of the Study

Financing formal education in Nigeria has become an issue of public concern as a result of the present economic down turn and world wide inflation. According to Central Bank of Nigeria (2003), poor financing has been the bane of Nigerian education system to the extent that the budgetary allocation has been very low. Furthermore, the federal government allocation to education has declined steadily since 1999 and is much lower than average in the last five years. This is particularly important in view of huge increase in number of intake at all levels of education primary, secondary and tertiary. Ajetomob and Ayanwale (2004) observed that one of the approaches government adopts in financing education in Nigeria is the annual budgetary allocation to the sector that are distributed as subvention or grants to the different levels of education the grants or subventions are made through respective education ministry of government by the coordinating agencies of education such as the National University Commission (NUC), National Commission for Colleges of Education (NABTEB), Secondary Education Management Board (SEMB) and Universal Basic Education Commission. They went further to say that since the oil crisis in the eighties,


the proportion of capital budget allocated to education has been consistently lower than the proportion of recurrent expenditure over the years, the government capital expenditure allocated to education as a percentage of total capital budgets ranged from as low as 1.7 percent in 1999 and not up to 9% in all case. Like total budget, the proportion was not consistent and this however, has retarded progresses in building facilities (Okunamiri, 2007). This view agrees with Moja (2000) when he asserts that building of classroom has not kept up with increased enrolment in all levels of Education in Nigeria. Worst affected are primary and secondary schools where classes are offered in the open air. In several secondary schools, as many as four classes are accommodated in one classroom and these are classes that are already over crowded and in poor state of repairs. In addition, laboratories and equipment are grossly inadequate and the attendant problems in terms of quality of education usually tell on the products (Ajetomobi & Ayanwale, 2004). Abdullahi (2003) stated:

“since independence there has been a consistent increasing demand for educational services in Nigeria. This demand arose as a result of population growth, increasing social demands (the desire to educate a good proportion of the population) and need for more skilled manpower in the country. The increasing demand on educational services means the establishment of more schools and provision of



more teachers and materials. The result is that the burden of funding education in Nigeria, which rests mainly on the various tiers of government, is becoming unbearable. This fact is evident by the existence of numerous problems bedeviling the Education sector in the country. It is a foregone conclusion that in Nigeria with a population of over 100 million, a good percentage of which consists of young people, the funding of education can no longer be totally left in the hands of government (p: 43)”

The scenario described above, particularly the rapid changes in the education sector since independence, depicts a state of chaos in the sector. The result is that numerous problems are easily discernible in the sector including the following:

  1. Poor infrastructural facilities in schools at all


  1. Poor number and quality of teachers particularly at primary and secondary level
  2. Poor quality products (graduate) from schools at all


  1. Loss of confidence by the general pubic in the


Most of these problems arose from inadequate funding of the sector (Nwagwu, 2002).

Fashina (2005) observe that in 1994, the funding formular was revised by the government so that the state would share 50% equally, thus



educationally disadvantaged states 25%, pupil enrolment 25% and population of the states 10%. In 1999, the then government scrapped the National Primary Education Fund (NPEF) and reconstituted it under another name (the National Primary Education Commission). This action was taken in recognition of the states and local government’s constitutional responsibility for financing and managing primary education. Alternative source of funding explored by government is the Education Tax Fund (ETF) established in 1995. It ensured that companies with more than 100 employees contribute 2% of their pretax earnings to the fund. Primary education receives 40% of this fund; secondary education receives 10% and higher education 50%. Primary education has in the past also received from Petroleum Trust Fund (PTF) for capital expenditure and provision of instructional materials. While in higher institutions, gifts, endowment funds, consultancy services farms, satellite campuses, pre-degrees are other alternative funding sources. Despite all the alternatives, the infrastructures, and facilities remain inadequate for coping with a system that is growing at a very rapid pace. The annual population growth rate was 3.3% (C.B.N, 2003). Due to poor financing, the quality of education offered is affected by poor attendance and inadequate preparation by teachers at all levels. The morale of teachers is low due to basic condition of service and low salaries.



Furthermore, physical facilities need to be upgraded and resources such as libraries, modern communication and information technology equipment have to be provided (Anozie, 2000).

The quest for meeting these basic education needs has been the cause of unending crisis between government and trade union such as Nigerian union of teachers (NUT), Academic staff union of universities (ASUU), Non-Academic staff union (NASU). In the same direction, Ogbonnaya (2005) contends that education sector competes with the industrial, health, agriculture, communication sectors of the economy and as such demands effective funding from government. The same is true of other sectors. Thus, the funds made available for education are never enough as these sectors must receive attention as well. In view of the above, it may be observed that formal education is at cross roads in the country, especially when other sectors of the economy are competing keenly for attention as much as education does in the national budgetary allocation.