Sunday, December 19, 2010

Funding Higher Education

By Olu Akanmu

There has been very significant outrage at the announcement by the Federal government that six additional federal universities will take off from next academic session. The paltry N10billion naira voted for their take off raises fundamental question about the quality of education that these universities will deliver. If the federal government has not been able to fund existing twenty-five universities properly, why should it start an additional six universities? It does not suggest that quality and standard are important to government. Patriotic concerns have been expressed that it is time to recognize that the current fee regime of the universities is too small to complement the paltry funding that they receive from the government. That the Nigeria state should not own a Nigerian youth, university education but a good secondary foundation education. That university fees need to be significantly higher perhaps at near commercial level for sustainability and standard of the university system. This may be complemented by endowment from rich and charitable individuals and a student loan program where students could borrow to pay the near-commercial high school fees. We respond to this school of thought in this essay.

The problem of our higher education and its larger social impact are complex hence the solution to the problem will be non-linear. Education is a public good whose larger social and economic benefits are bigger than what can be typically harnessed by private capital in investment returns. This creates a pricing problem in that prices may be either too high as to serve only the markets where capital can get its return, leaving a large section of society un-served with dire social consequences; or too low as to serve everyone but priced below the optimal level for private capital returns, which implies there will be little or no investment. This is the market failure problem that recognizes that while the markets may be best in allocating society’s resources efficiently, it has significant limitations in the case of public goods like education, national security and public health. When the state is endowed with abundant resources, it could intervene to correct the limitations of markets by providing public goods exclusively for society as we have tried to do in Nigeria. Given however, the current resource limitations of the Nigeria state, what we need is a structured, tiered and segmented partnership with private capital in the provision of our public goods such as our university education.

Firstly, we need to license more private universities and create structures that allow them to charge market prices for the market segments that can afford to pay such commercial prices. We should create incentives for the acceleration of private investments including tax incentives that will encourage the provision of world class infrastructures and standards in our private universities. There is a significant middle-class market that educates their wards in private secondary schools at costs that are fifty times higher than the highest fees in our public universities. That market should be served by the private universities and should free the public universities to serve the market segments that cannot afford to pay commercial prices. The public universities will serve as a social safety net for the larger section of the population that cannot afford commercial prices for education. It will provide for them university education as a public good whose opportunity cost would have been a half-educated population that could contribute very little to the well-being of the modern society. Then, we should have very tough regulation of standards by the National University Commission on curriculum, teaching qualification, facilities and minimum pass requirements including the unapologetic closure of departments that fall below such prescribed standards.

How would the public universities charging non-market prices be funded? We should re-set our national priorities to fund programs that have deep and spiral impact on society. The billions of dollars we have spent on ECOMOG operations since our first intervention in Liberia could have made a difference in the standard of our university education. Incidentally, there is a correlation between the decline of our university standards from the 1990s and our first ECOMOG adventure. We should also rationalize the structure of our governments at federal and state level and rationalize our executive and legislative bureaucracy with their bloated recurrent expenditures. We must also tackle corruption more vigorously. A key reason why society is unable to fund the provision of public goods is that society’s resources are looted heavily by the corruption menace. We can increase the efficiency of expenditure on public goods by at least thirty percent if we eliminate wastages and over-invoicing due to corruption in government. A student loan program learning from the American system could be useful but may be constrained by the limitation of our financial system with its very low financial inclusion where less than ten percent of our population has access to serious credit. We can also impose a one percent tax on foreign education remittances to support university education in Nigeria. A parent remitting USD20, 000 for her ward’s school fees will contribute a token USD200 to our university system and its public good. Because, many of us middle class people have been privileged by society, we should have such moral and legal responsibility to contribute to public good. Educational endowment from the rich could also be a good funding source as we have in the US, but this is a function of the depth of the moral fiber of the rich and their sense of duty to society. This is an area where our rich and those of the advanced societies are different. In a society where the rich do not even pay their legitimate taxes, it is not clear how much could be mobilized from them in serious charitable endowment to fund public goods like education. Rather we should strengthen our tax and tax collection systems to ensure that wealthy individuals fulfill their legitimate tax obligations ensuring that we spend a good portion of the increased tax revenue to fund our education sector.

In the last one year, we have spent a good part of state resources to bail-out our banks and the larger financial system. This is because our government is correctly operating with a paradigm that the financial system is a public good whose ill-being has serious social consequences and externalities beyond the private interest of our banks’ shareholders. We should also apply the same the public good concept to our higher education sector and its crisis. That there are significant externalities in social benefits in the well-being of our education sector beyond the private interest of individual students and their families. We must however do this within the context of good fiscal discipline; rationalize government fats and wastages ensuring that we do not create a ballooning public debt in the process.

Let’s Rebuild the Fallen Walls - Reflections on the Decay of Public Secondary School Education in Nigeria

By Olu Akanmu

Keynote Speech by Olu Akanmu at the Lagelu Grammar School Old Boys Association, 50th Anniversary Fund Raising Dinner. January 13, 2008

Brothers, Seniors and Contemporaries. We have come to celebrate the 50th anniversary of our institution, our secondary school on whose foundations we have built what have made us to be called success. While it is on one hand a celebration, it also represents the highlighting of the decay of our institution, a metaphor for the decay of our nation and its institutional fabrics.

Lagelu Grammar School, with its serene academic environment, its beautiful and tall Casuarina trees, that made the sky felt so near. Those Casuarina trees that constantly told us as students; that the sky could be reached and not an impossible summit. Lagelu was the hallowed temple for the moulding of leaders of tomorrow, whose catchments area was largely among the indigenes of Ibadan; who were its founding fathers.

Today, the walls of the hallowed temple of our institution, nay our nation is fallen. The Casuarina trees are gone. The environment is no longer serene. The glasses of the windows of the beautiful hall, a rock solid architectural masterpiece, are now made of wooden planks. There are neither more encyclopedia in the library nor chemicals in the laboratory. Lagelu, that was the pride of the nation in French subject in the late 70s, winning prizes even in West Africa, no longer offer French to its students. The wide expanse of school land of a thousand acres is gone. They have been taken over by the police barracks and several schools claiming to be offsprings of the Lagelu mother school, but who are nothing but pretenders to the heritage. The boarding house where we learnt discipline and toughness is also gone. It was the place where we were toughened by cutting the stubborn grass of our slanting football field.

As we have said, the institutional decay of our school, is a metaphor for the decay of our nation and its institutional fabrics. It represents the decay of our communities, of our government, and the ethical values that should have made us a strong nation. The nature of our societal institutions today is the outcome of our collective efforts as leaders and followers.

Our institutions have decayed, not because we lack resources, for we are a blessed nation. Our institutions have decayed because we have enthroned the values of graft over service. Our institutions have decayed because we have worshiped material over knowledge. Our institutions have decayed because we have let enlightened self-interest entrenched itself over the interest of the larger community.

Our school took its name from Lagelu, the founder of the ancient city of Ibadan. Ibadan the ancient city of our birth, that is rich in history of the triumph of community values over enlightened self interest. We remember the famous story of Efunsetan Aniwura, the Iyalode of Ibadan, her wickedness, her oppression of the citizenry; and her eventual defeat by the collective will of the people.

Brothers, Seniors and Contemporaries. The fact is that if Efunsetan were to be alive today in many parts of our nation, she would be a political party Chairman or member of board of trustee of the political party of her choice. Such is the decadence of our political institution today.

Yet, we must not loose hope, for we can see some silver lining in the dark clouds. Our leaders and their stewardship are being questioned for the first time in the law courts. Enlightened self interest may push back but the larger community interest is resisting well through the institution of our vibrant press, a real blessing of our democratic experiment.

Enlightened self interest perpetuates itself over our larger community interest when the institutions for expression of our community interest are either weak or non-existent. We see this in our democracy and its faulty electoral process. Even the President acknowledged that what we had in April was not an election to be proud of and has set up a committee on electoral reforms. While we re-build the political process and its institutional framework to which our political parties are core; it is critical that we strengthen alternative social institutions outside the political process. These social institutions provide alternative platforms for the expression of our larger community interests. These alternative social institutions include our NGOs, our town unions and Parapos and our old boys associations such as that of Lagelu Grammar School. They must however not just be elitist groups that flaunt the success of its members and promote only their self-interest. If they do so, they will be guilty of the sins of the politicians. They must be associations that are truly non-partisan, associations that champion our larger community interest; who put pressure on the political process to reform it, to be truly democratic.

And back to matters of our beloveth school. Our different generations, who have passed through Lagelu Grammar School, have been very privileged. We have had the privilege of sound education of the highest academic and moral standards. To this privilege that we had, comes an obligation to give back to the institution that has shaped our lives. We must rebuild the fallen walls of the hallowed temple of our beloveth school. Albert Einstein said and I quote

“Everyday, I remind myself that my inner and outer life are based on the labours of other men, living and dead, and that I must exert myself in order to give in the same measure as I have received and am still receiving”.

A generation had the vision and founded the school and gave us a privilege education. We who have received from the school must give back as much as we have received. Our generation must ensure that the baton does not fall from our hands. That even if the baton has fallen, it must be picked up again and we must begin a new race to connect the school back to the glory of the past.

There are several programs and endowments that have been proposed by the national body. Lets us give generously to support them. Let’s also ensure that as we build new infrastructure in the school, that those infrastructures are maintained and sustained. Let’s have a tripartite governance structure for the school of those who have genuine vested interest in its highest standards. These are the teachers, the parents and the old boys association. As we rebuild our old school and improve its standards, we are in our little, but no small way building back the nation and its standards. It is therefore a privilege and sacred duty for which we must be proud, proud to serve and proud to give.

Brothers, Seniors and Contemporaries. Thank you for listening.

Speech by Olu Akanmu at the Lagelu Grammar School Old Boys Association, 50th Anniversary Fund Raising Dinner. January 13, 2008