By Wale Thompson | In a surprise move on 14 June 2023, the Central Bank of Nigeria (CBN) announced the removal of all restrictions on foreign exchange rates and signalled a willingness to tolerate greater flexibility in exchange rate determination as against the previous practice of a hard peg. In simple terms, the CBN ‘floated’ the Naira. This announcement was accompanied by directives which unified the multiple FX tiers invented by Mr. Godwin Emefiele, the suspended CBN governor, and specified the re-introduction of a “willing buyer, willing seller” arrangement for Nigerian foreign exchange markets.

This policy shift was consistent with the expressed desire of President Bola Tinubu for a unified exchange rate in his inauguration address of 29^th May 2023, as well as the yearnings of private businesses, analysts and financial market investors, who had been frustrated at the arcane rules and lack of liquidity associated with the previous era. In its aftermath, the Naira has lost around 40% of its value within the official window to close at NGN770/$ on the first day of trading, a development that has elicited a mix of cautious optimism and pessimism. While praises have poured in from international financial organisations, business elites and financial market investors and western countries, the fledging reform has also attracted an avalanche of knocks from segments of the media, labour unions and a growing number of citizens struggling with continued depreciation of the Naira and its adverse inflationary effects.

After the initial optimism surrounding the unification of the Naira, with the disappearance of the gap between the official and parallel market exchange rates, sentiments have turned pessimistic as trading activity in the Investors & Exporters (IE) window has remained stagnant, and parallel market premiums have widened to 20% with the value gap at N170/$. Alongside a steady decline in gross external reserves to $33.9 billion, concerns have heightened about the outlook for the currency and its knock-on effect on domestic prices and citizen welfare. Granted that FX unification was not an end to itself, but rather a means towards restoring improved forex liquidity flows and restoring capital flows, the initial signs have not inspired confidence that a resolution to the lingering FX crisis is at hand.

Given the speed within which the Naira floatation was executed without any concrete arrangements on bolstering dollar supply, focus has shifted to this unresolved item given thin dollar liquidity within the official segment (daily trading has averaged $106 million versus $110 million prior to unification) amid signs of fresh weakness at the parallel market. Without direct attempts to stem the tide, the temptation to return to the old ways of managing things might look attractive which might blow away the current opportunity.

What further steps are required to stabilise the emerging situation over the near term and what concrete policy adjustments should follow for Nigeria to have a more sustainable approach to exchange rate management? In what follows, we briefly review the Naira float policy, provide some historical context to exchange rate regimes—highlighting the expected benefits and potential pitfalls of fixed and floating systems—and provide some recommendations on how Nigerian policymakers should look to approach FX management in the near and medium term.

Naira Floatation: Shock Therapy in the Face of Fundamental Deterioration

For the fifth time in Nigeria’s post-independence history (after similar moves 1986, 1995, 1999-2000, 2017), Nigeria’s policymakers have elected to abandon a hard nominal exchange rate peg (with the most recent one set at N461/$) in the face of depleting external reserves. Interestingly, the CBN announcement on the seismic shift in policy did not provide any justification for the decision nor an admission that the old peg arrangement had failed.

This would suggest it was not an innate desire or willingness to change but rather a loss of ability amid growing political pressure following the suspension of the CBN governor. Indeed, only as recent as May 2023, the CBN organised a conference where many participants (including the present top brass at the apex bank) ‘celebrated’ one of the many confusing policies (RT200) of the old FX regime which has now been scrapped. Thus, it is more likely that a shift in political leadership catalysed an opportunity for the CBN insiders to save face by quickly returning to fundamentals as the basis for FX rate management.

A look at the fundamental data reveals the existence of large imbalances in Nigeria’s external accounts occasioned by a mix of structural shifts and policy missteps by the CBN as the bane of the present FX woes. Between 2005-2013, Nigeria enjoyed a ‘structural surplus’ in the export and imports of goods and services (see Figure 1) primarily on account of higher oil export revenues due to stronger oil prices as oil production remained roughly static around2-2.2mbpd. This surplus exceeded $20 billion annually in the early part of the period (2004-2008) which allowed substantial external reserve accretion (peak $62 billion in September 2008) before moderating to $10-15 billion in 2010-2013 period.

Figure 1: Nigeria’s export import balance 2005-2022 (USD’billion)

Source: CBN

By design, the CBN has a fiat ownership of export petrodollars (a flaw at the heart of Nigeria’s FX architecture which we shall see later), which allows the apex bank to situate itself at the heart of FX management during boom times with the ability to determine to a large extent the price (exchange rate that most people get dollars) and quantities (USD allocation or who can get dollars). The latter being a derivative of the former as the readily available ‘stronger’ CBN rate ensured that its price set the tone for other FX segments. As a result, the official USD market was large enough relative to the non-official USD market so much so that the CBN began supplying dollars to retail end-users via Bureau-De-Change operators.

The large crude oil flows resulted in the adoption of a ‘defacto’ policy of exchange rate stability as the basis for monetary policy even though several CBN governors would publicly declare inflation targeting as the ‘dejure’ basis for monetary policy¹. This commitment to nominal exchange rate stability also underpinned real exchange rate appreciation over the period. For context, while the nominal exchange rate weakened 16% (-1.8% per annum) over the 2005-2013 period, the Naira appreciated 55% (+6% per annum) in real terms which as we shall see had profound implications for non-oil exports and service imports.

Figure 2: Nominal USDNGN and annual change in the real effective exchange rate

Source: CBN, Bruegel *May 2023

But first we turn our attention to dollar supply trends within the Nigerian economy. As noted earlier, at the height of the oil boom in the mid-2000s, the scale of the oil inflows and Nigeria’s shallow and less integrated financial markets (Nigeria had no bond market until 2007) implied that the CBN dominated the FX market accounting for between 60-70% of the total market. However, this dominance in terms of USD inflows declined to under the 50% in 2007 when CBN flows totalled $36 billion relative to non-CBN inflows of $38 billion implying that there was more USD coming into the Nigerian economy via autonomous sources than through the CBN channel.

This gap would widen in the coming years and at one point was more than double CBN inflows in 2010 ($63 billion vs $27 billion) before peaking at over $103 billion in 2013 (when CBN flows came to $41 billion). Essentially, the CBN dominance of the official market was an illusion helped by the commitment to exchange rate stability via a combination of tight Naira interest rates and relaxed FX controls. This allowed the CBN maintain the illusion of control that it determined prices within the official segments and could control the market.

However, in 2009, despite fairly robust firepower with record reserves, the onset of the global financial crisis and the Nigerian banking crisis triggered a crisis of confidence in the Naira. This manifested in the form of widened spreads between the official and parallel market exchange rate which averaged 18% between March 2009 and June 2009 despite heavy CBN intervention so much that the apex bank briefly suspended the interbank FX market and eventually surrendered by devaluing the official peg to the level obtainable in the parallel market.

Though most literature have linked this divergence to the 2008-09 global financial crisis, in hindsight this was the first show of force by autonomous flows that CBN control of Naira determination was tenuous. It is within this context that we should interpret latter episodes of wider parallel market premiums (2014-17) and (2020-2023). In essence, given their size, autonomous flows would only equilibrate on CBN’s perception of Naira pricing when it was perceived to be ‘fair’ and not on CBN’s dictated terms.

Figure 3: USD Inflows to the Nigerian Economy

Source: CBN

Figure 4: Parallel Market Premiums

Source: CBN, Author’s Calculation *H1 2023

Nevertheless, CBN’s illusion of control allowed it to remain in charge of the official segment by offering a stronger exchange rate than the weaker rate available within the non-official segment, alongside the threat of sanctions, the CBN was able to finance over 60% of USD import demand between 2005-2013. Thus, to a large extent the CBN could dictate the FX rate that mattered for importers of goods and services and could supply liquidity within this segment.

However, the tectonic plates were shifting in Nigeria’s external accounts, a function of an artificially strong exchange rate. In particular, the share of non-tradables or services within the import basket had expanded greatly as Nigeria increasingly integrated into the global economy. Services share of imports rose to 30-40% levels from 20% driven by increased Nigerian consumption of foreign transportation (given the absence of a Nigerian flag carrier on international routes), education, health and financial assets.

The other big shift in dollar demand composition was in oil imports which rose from 10-15% in 2005 to 20-22% of total imports at end of 2022. In all, non-tradable service imports and oil imports, by-products of real exchange rate appreciation and an unrealistic fuel price subsidy regime would become the fatal flaws in Nigeria’s FX market architecture that would provide to be its Achilles heel.

But rather than directly address the unrealistic petrol subsidy regime or look to curb the growth in non-tradable service imports, Nigerian policymakers chose to periodically embark on import suppression on good imports which disproportionately target the poor. While the CBN would routinely institute FX bans on good imports, it would strive to provide FX for Nigerians looking to school abroad.

The More Things Change, the More They Stay the Same…

Following the collapse of oil prices from an average of $100/barrel to under $50/barrel in the 2014-2017 era exacerbated by a drop in oil production in 2016, the fundamental situation changed. As in 2009, when the CBN held the line on the FX rate and suspended the interbank, the policy response was broadly similar in 2015: the apex bank froze the FX rate at N200/$, ended the Dutch auction system of weekly auctions and terminated the trading in the currency alongside liquidity restrictions within the official market.

As in 2009, the non-CBN flow market would respond by refusing to unite with the CBN dictated rate leading to an expansion in the gap between the official and parallel market exchange rates. Unlike the 2009 episode, the CBN however no longer had the fundamental picture of excess USD liquidity. But the CBN refused to recognise or accept the change in reality. In another replay of 2009, the apex bank resorted to tolerating excess Naira liquidity while imposing multiple restrictions, creating several FX layers and fighting an imaginary war on currency speculation.

It is important to highlight that the CBN actions was consistent with the expressed desires of former President Muhammadu Buhari even though the apex bank knew the truth of the underlying reality: that within the grand picture of FX flows, it no longer had the ability to underwrite a level of Naira exchange rate, especially after it had lost the faith of autonomous flows. While the CBN still held the line of regulating official transactions, this was an empty title: Naira’s rate determination would now take place away from official windows.

The difficult 2015-17 episode did have one major implication: unlike in the past when a desire for a stronger exchange rate overran the desire for USD liquidity, long taken for granted, the CBN response forced Nigerian corporates and citizens to realise that USD liquidity was of prime importance with pricing less so. Thus, began a game of chicken wherein the parallel market rate assumed prime importance while the CBN owned the title of master of no nation with its totemic official window.

It is against this backdrop that we should understand the present policy response: the adjustment to reality enforced by another cycle of deficits in the current account which authorities could not finance via reserve drawdowns or foreign portfolio inflows. The former is largely because the  petrol subsidies financed via refined petrol for crude oil swaps curtailed inflows to external reserves while the latter is brought about by the pursuit of negative real interest rates and restrictions on FX access.

The second point bears some examination. As led by its now suspended governor, the CBN embarked on an experiment with unorthodox monetary policy which included large monetisation of fiscal deficits by ways and means, financial repression brought about by negative real rates, the imposition of a hard peg on the Naira exchange rate and direct balance sheet lending by the CBN to the real sector.

These unorthodox arrangements were initially sustained by a brief period of high oil prices in the external sector following Russia’s invasion of Ukraine, which helped mask weak oil production and the burdensome costs associated with a petrol subsidy regime. However, over the second half of 2022, the deterioration in oil production and out-of-control subsidy bill financed via crude-for-refined petrol swaps shrank inflows into the CBN’s reserves. As in Figure 5, declines in these flows tend to correspond with periods when Nigerian policymakers adjust their currency pegs to reality.

Figure 5: Reserve Inflows and Dollar Demand

Source: CBN, Author’s computation

A Brief History of Exchange Rate Systems

Flexible exchange rate regimes and their variants are now considered ideal for most economies, but this has not always been the case. Historically, the gold standard was the dominant exchange rate system, wherein currencies were equivalent to pre-defined weights of gold. This regime was in force till the end of World War II in 1945. Thereafter, countries shifted to pegging their currency values against the US Dollar as the dominant power while only the US Dollar maintained a fixed convertibility to gold.

However, as economies recovered from World War II and global trade expanded, along with significant growth in cross-border financial flows, pressure mounted on the US Dollar, leading the US Government to abandon the gold-USD convertibility in 1971. The inherent problem with fixed arrangements is that it required that countries with trade surpluses needed to strengthen their currencies, while those with trade deficits needed to weaken theirs, in order to achieve a balance in global trade which, in itself, is essentially a zero-sum game of winners and losers.

However, the pegged arrangement hindered this balance and countries with trade surpluses were reluctant to tolerate stronger currencies due to the effect on their export competitiveness. A similar explanation worked for losers in the global trade game as countries with trade deficits, often import-dependent economies were unwilling to tolerate widespread depreciation due to welfare implications. Thrown into the dynamic was the rise of financial assets which allowed investors to speculate on interest rates and currency adjustments, further intensifying pressure on the US Dollar and prompting the need for changes.

Numerous attempts to reform fixed exchange rate systems worldwide proved unsuccessful, prompting most countries to transition to some form of floating exchange rate system during the late 1980s and 1990s. With the collapse of the Soviet Union in the 1990s, more economies with pegged exchange rate regimes in the global south had to face this reality and experienced disorderly transitions from fixed to flexible exchange rate regimes. The dominance of the US Dollar in global trade between non-US countries, owing to its large liquidity and the non-convertibility of other major currencies, played a central role in this shift.

After the 1990s, countries adopted either fully flexible exchange rate regimes or some variant of flexibility, such as managed float. In the latter scenario, the level of central bank commitment to a peg determines the degree of flexibility in the exchange rate regime. The harder the commitment, the less flexible the regime, while a softer commitment results in a more flexible regime.

In Nigeria, from 1960 to 1985, the exchange rate was fixed at a 1-1 peg against the US Dollar in nominal terms, similar to much of the global economy. However, in real terms, the Naira became overvalued relative to the dollar following the collapse of oil prices in the early 1980s. Nigeria's over-reliance on a single commodity proved to be a major vulnerability for the wider economy during subsequent foreign exchange crises. Unfortunately, resistance from political and economic leaders to face reality created the perfect conditions for spectacular collapses once the ability (external reserves) to pretend about the exchange rate dissipated.

Flexible exchange rate regimes are preferable to fixed peg arrangements for several reasons. Firstly, flexible exchange rates provide an automatic framework for adjusting to external shocks and changes in economic conditions such as fluctuations in commodity prices or global economic downturns. A flexible system allows for countries to adjust their currencies in a manner that enables limited disruptions to trade and capital flows.

Secondly, flexible exchange rates grant more autonomy to monetary policy, enabling central banks to respond effectively to domestic economic challenges. In contrast, fixed peg arrangements can greatly constrain a country's ability to implement independent monetary policies, potentially exacerbating inflation as seen in Nigeria over the last eight years. Additionally, flexible exchange rates can foster competitiveness in export industries and prevent the build-up of unsustainable imbalances on the import side, supporting economic diversification and reducing reliance on a single commodity.

However, there are several variants of flexible exchange rate arrangements and there is no off-the-shelf variant for emerging markets like Nigeria. Rather, each country develops a commitment to ensuring that its exchange rate trends broadly mirror developments in the external accounts. To avoid the political golf ball that comes with currency adjustments wherein opposition politicians and others deploy exchange rate trends as part of political campaigns, there is need for transparency and clear communication around central bank’s actions and FX markets in general and commitment to a credible basis, usually inflation-targeting, for monetary policy.

Getting Nigeria’s Forex Reform on Track

Following several failed attempts at transitioning to a flexible exchange, Nigeria has embraced another attempt which needs to be situated within the context of wider discussions about macroeconomic strategy with the appropriate time frames. Mere FX adjustments to adapt to reality may lead to short-lived gains, followed by a return to previous practices. To avoid this cycle, forex and monetary policies should be part of a comprehensive economic plan where the exchange rate serves as a tool for export diversification and for attracting capital flows to foster overall development. Successful fixed to floating transitions are characterized by certain key features. Outlined below, these features should be taken on board by Nigeria’s policy makers in the medium to long terms:

1. A clear role for exchange rates within the context of broader economic strategy: The exchange rate is a key input variable within the context of an economy: as it serves as a measure of relative prices between a country and its trading partners. The long-stated objective of Nigeria’s policymakers is to diversify its export base which given Nigeria’s labour abundance distils to ensuring that industrial activity is geared towards the production of exportable goods that use a lot of low-skilled labour that is abundant in Nigeria. To ensure export competitiveness of these non-oil exports, exchange rates policies must look to deliver an extra layer of competitiveness to export prices in a form that favours domestic industries. To this end, the goal of policymakers on FX is not nominal exchange rate stability but real exchange rate stability with an undervaluation bias. To this end, Nigeria’s FX policy must look to ensure a balance between real exchange rate stability that ensures non-oil export competitiveness and keeps inflation at a level supportive of domestic welfare. Nigeria’s economic managers must explicitly seek to achieve this balance and must demonstrate annually how their policy measures or adjustments deliver on these goals. The best example here is Singapore, where the central bank is required to publish annually how it goes about delivering balancing FX policy within the twin objectives of trade competitiveness and low inflation. Nigerian authorities must change the CBN Act with explicit references for the CBN to demonstrate how via its policy actions it ensures real exchange rate competitiveness and stable prices via reports published bi-annually.
2. A deep and liquid FX markets: By definition, a laissez-faire market is one with many buyers and many sellers such that no one party is large enough to influence the actions of others. In creating a workable FX market architecture, Nigerian policymakers must envision a distinct set of supply forces i.e. multiple FX sources which can be attained by removing all forced sale rights on oil exports presently held by the CBN. Rather, the CBN should purchase its USD like every market participant to manage Naira liquidity at a level consistent with its own money supply objectives. Essentially, a credible FX reform will end the forced petro-dollar to Naira conversions financed via the printing of new money. The goal is to create an FX market with diverse players especially on the supply side: CBN, oil exporters, non-oil exporters, remittances, foreign portfolio investors etc.
3. Consistent focus on price stability: In lieu of nominal exchange rate targeting, Nigeria’s central bank must have an explicit inflation targeting framework with clear annual and inter-mediate inflation target that are publicly known and must annually demonstrate how its policies achieve this objective. The CBN can have several inflation measures (consumer price index, producer price index, wage inflation etc) to prevent undue reliance on one metric and importantly it should demonstrate how its adjustment of policy instruments (interest rates and money supply) are enabling it move inflation within targets. Nigeria’s fiscal and legislative arms should be on hand to deploy censure to CBN governors unable to deliver within target inflation. To avoid the egregious abuses over the last five years, Nigeria should look to divorce CBN control over development finance banks and capitalise these entities to fund underserved sectors of the credit market.
4. Curtailing information asymmetry through increased transparency and clear communication: To help proper FX pricing, Nigeria’s central bank must work to deliver increased information about demand and supply trends and end the dark ages on critical data on trends across FX markets. As in some markets like Singapore, the CBN legislation must include requirements for publication of period data and analysis of trends in FX markets to the public. This requirement must impose penalties for non-compliance. Under the suspended CBN governor, the CBN commenced data censorship with the withdrawal of more in-depth data which created no transparency on FX markets.
5. Institutional mechanisms for hedging volatility: Beyond developing deep and liquid spot markets, concerted efforts must be on including avenues for hedging without any arcane restrictions that look to curb speculation. The CBN should work with exporters and financial institutions to develop the means for importers to hedge against FX volatility risk to prevent demand front-loading. Nigeria should work actively to ensure that the large USD flows (including remittance flows) equilibrate within the official segments.
6. A clear framework for FX interventions: Market failure is a feature of still forming markets and Nigerian policymakers must be clear-eyed to have a system for dealing with periods when markets become volatile. Thus, there must be a clear operational framework for dealing with periods of external shocks which should include providing temporary US liquidity, interest rate adjustments, communication and FX adjustments.

Beyond these broad medium to long term objectives, policymakers must not ignore the near term. To stabilise the present spiral, Nigeria needs a big stash of dollars and fast! Policymakers must look to strike the iron while it is hot to avoid reform fatigue by seeking out sources of large USD liquidity on concessional terms by exploring the option of a standby arrangement from multilateral agencies of significant scale ($5-10billion) with the objective of acquiring credibility.

Having front-loaded fiscal consolidation and external sector adjustments, Nigeria has the credibility to embark on key partnerships to catalyse increased capital flows. While this is politically tricky, desperate times call for bold and desperate measures. The global geopolitical environment means Nigeria has a window to obtain this funding if it is ready to push the envelope. These dollar flows are necessary to give the market ‘time to breathe’ as left unsolved, the Naira could come under fresh speculative pressures which might drive a return in policymakers towards the very pegged arrangement they recently jettisoned.

The CBN must look to be flexible in thinking: there are several variants of flexible FX regimes and we should be pragmatic to not rule out any options. The goal is to ensure that FX adjustments reflect the trends in balance of payments in a credible manner over the near and medium term.

Footnote

[1] In its 2021 Article IV, the IMF noted that Nigeria’s monetary policy was inflation blind (see IMF Article IV 2021)

Photo Credit: Mansur Ibrahim/TheCable

 

By Bolaji Abdullahi | Section 4 of the National Policy on Education (in the 4^th amended version) of 2004 states that the goals of primary education in Nigeria are to:

1. inculcate permanent literacy and numeracy, and ability to communicate effectively…
2. provide the child with basic tools for further educational advancement, including preparation for the trades and crafts of the locality¹

In a nutshell, it is expected that at a specified age, every Nigerian child would have acquired the foundational cognitive skills that they could build on in a latter life of vocation or further learning. It is clearly recognised that without these foundational skills, the ability to read and write and perform basic mathematical functions, a human being cannot fully function as a productive political or economic citizen. Therefore, to deny a child the opportunity for basic education is to devalue the child’s citizenship and undermine the basis on which all future capabilities are built.

Apart from education being a part of the general constitutional right², it is not surprising that the right to basic education is specifically guaranteed under the Child’s Rights Act (CRA), which states that: 

“Every child has the right to free, compulsory, and universal basic education, and it shall be the duty of the government in Nigeria to provide such education³. 

The Universal Basic Education (UBE) was launched in 1999. Its enabling Act, the UBE Act of 2004, reinforces the CRA and makes it a responsibility for every government in Nigeria to “provide free, compulsory, and universal basic education for every child of primary and junior secondary school age. More than two decades after the UBE was launched, it is important to examine the extent to which the programme has delivered on its key objectives of getting every child into school and equipping them with basic cognitive skills as stated by the national policy.

It would appear that some progress has been made in terms of enrollment as there are more children attending school today than at any other time in our history⁴. But we still have more children out of school than any other country in the world. Therefore, Nigeria’s enrollment figures, in or out school, may only be relative to its population size. In absolute terms, however, Nigeria has between 13 and 20 million children out of school⁵.

In terms of learning achievements, it has also been widely reported that Nigerian children are seriously falling behind. In its January 25, 2023 edition, The Guardian cited a UNICEF report that 75% of 14-year-old Nigerians cannot read a simple sentence or solve basic mathematical problems⁶. This confirms an earlier report in 2018 that only 20% percent of those completing primary school in

Nigeria can read⁷. Therefore, even when more kids are going to school, they have not been doing much of learning.

Indeed, the reality would suggest that Nigerians who are parents today got better education from public primary schools than their children are getting now, even twenty-four years after the UBE. In the past it could be taken for granted that any child completing basic education in Nigeria would have attained the appropriate levels of proficiency in reading, writing and arithmetic. Not anymore. Quite ironically, the chances that a child would acquire these competencies now lies outside the public schools and depend on the ability of the parents to pay.

Having lost faith in the public education system, parents who could afford to pay have opted out of UBEC-funded primary schools, leaving only those who are too poor to afford even the cheapest of fee-paying private schools or those who reside in places where such option is not available. The failure of children to learn from public schools, would, in fact, suggest that the more children we have attending those schools, the more children we have who are in danger of acquiring no education for a future life of further learning or employment. In only a few decades, Nigeria’s prosperity and progress will be determined by these children. Their inability to learn the skills to solve even the basic problems they will encounter clearly has serious implications for Nigeria’s social cohesion as well as future economic and human capital development objectives.

The issue of out-of-school children remains pertinent to any conversation about universal basic education. So much has been written about this in the past, and different factors have been identified as responsible for slow enrollment in different parts of the country or disparity in enrollments along gender lines within the same region of the country. However, the main focus of this paper is on improving the quality of basic education in the country.

We will start with a brief review the Universal Primary Education (UPE), launched in 1976 as the first national initiative on primary education and show how the challenges encountered with its implementation conditioned the design of its successor programme, the Universal Basic Education (UBE). We will then highlight the key problems with the implementation of the UBE since inception. We will argue for institutional and policy reforms and practices that will seek to enhance effectiveness in funding, greater efficiency in governance, as well as improved quality of teaching and teachers as pathways to achieving better learning outcomes in the schools.

Our considered conclusion is that any effort aimed at reforming basic education in the country must focus on how to make the schools better at teaching children. Therefore, we need to invest more on the factors that determine learning outcomes and bring all of them into play to give children a real shot at learning.

Lessons from the Past: The Universal Primary Education (UPE)

The Universal Primary Education (UPE) was launched by the Federal Military Government in September 1976 as a first step in a general plan to provide equal opportunities for all citizens to acquire education at all levels. UPE was intended to address the imbalance in educational opportunities between the north and the south of the country as well as between rural and urban areas. Fundamentally, the planners believed that education could be used to promote national unity and understanding in the aftermath of the civil war.

The plan was to bring all six-year-olds in the country to school starting from 1976 and to ensure that by 1981, all children of primary school age are enrolled. Based on this plan, it was projected that 6.4 million children would enroll in the first year. However, to everyone’s shock, over 8.2 million children turned up, and by the following year, this figure had reached 9.5 million. Some states actually recorded over 200% increase from the immediate pre-UPE year, while some states received on resumption date, more children than they had registered. Thus, the government was confronted with “a tidal wave of swiftly swelling pupil enrollment.”⁸  As a result, classrooms, furniture, books, teachers etc., became grossly inadequate. Some states resorted to running two school shifts—morning and afternoon. Some had to improvise make-shift classrooms, under trees, with palm fronds and zinc. Teachers had to be recruited who themselves were barely literate, with majority having only two years of UPE teacher’s college training. In some states, up to 40% of teachers had only primary VII education⁹. Emergency contracts for classrooms and supplies were awarded which were never delivered or were not delivered to specifications. It was a mess.

At the time the UPE was being planned, Nigeria had just happened on unprecedented oil wealth. In 1974, crude oil output was 2.3 million barrels per day (bpd). However, by 1976, within two months of the launch of the UPE, output dropped to 1.5 million bpd, which fell further in the following year, along with the price¹⁰. It soon became clear that the hope that the Federal Government would fund the entire UPE plan had been misplaced. Curiously, even in the face of dwindling revenue and the emerging financial and implementation challenges on the UPE, the Federal Government announced that secondary, technical and post-secondary would also be free from 1977.¹¹ However, by 1978/79, the Federal Government had begun to transfer some responsibilities to the states and the local governments. The 1979 Blueprint on Educational Policy recommended that the three tiers of government should share the responsibility for primary education as shown in the table below¹²:

Table 1: Distribution of Responsibility on UPE, 197

Federal Government	Provide grants to states for payment of salaries of primary school teachers
State Governments	Capital costs: buildings, furniture, fittings, books, registers diaries, State Allowances and other entitlements, including pensions
Local Governments	Salaries of non-teaching staff, first aid, staff quarters and toilets.

At this time however, the cost had become so high that education was the single largest budget item in most states¹³. This led to increase in taxation. Even then, the promise of free universal primary education had become such a financial burden; so much that one state governor remarked that the reference to the UPE as free was a “misnomer”¹⁴ and as a result, people had to pay more tax or parents had to be willing to take some of the responsibilities. It was becoming clear at this point that the degree of commitment by each level of government to the free UPE programme had considerably dwindled¹⁵” Not unexpectedly, some states started to reintroduce some fees. Apart from being designed to be free at inception, UPE was expected to be compulsory by 1979. However, overwhelmed by the financial burden and other crises of implementation, no one was talking about this anymore.  Instead, Professor Sanya Onabamiro, Chairman of the Implementation Committee of the education policy said the scheme should have been delayed until 1979 to allow more time to recruit teachers and build the required classrooms.

When the UPE was launched in 1976, one writer described it as “a rapid campaign on a massive scale – an ambitious drive for modernity.”¹⁶ But only three years later, UPE had become known to many as  “Unfulfilled Promise Education” or “Useless Primary Education”¹⁷.

Universal Basic Education (UBE)

Quite incidentally, it was the same man who launched the UPE as military Head of State that returned 23 years after as an elected president to launch the Universal Basic Education (UBE) in 1999.  Although the UBE fell within the global development agenda at the turn of the millennium, it is difficult not to imagine that President Olusegun Obasanjo saw the UPE as an unfinished business and his return to power as an opportunity to correct some of the mistakes that made the scheme to fall short of expectations. Thus, the UBE differed from its predecessor in two significant ways. Whereas, UPE was only universal and free, the UBE is universal, free and compulsory, prescribing specific penalties for parents who fail to enroll their school-age children. But more importantly, unlike the previous scheme which suffered from difficulty in funding and lack of clarity about who pays for what, the UBE had a ring-fenced funding source with a built-in mechanism that guarantees contribution from states in form of counterpart funding.

Section 11(2) of the Universal Basic Education Commission (UBE) Act, 2004 and Section 12(2) of the Education Reform Act, 2007 outline the funding mechanism of the UBE in the country. They establish counterpart funding between the Federal Government and the state governments as the basis for funding basic education in the country. In this wise, “the state shall contribute half (50%) of the total cost of projects to be executed in the State [in order to] ensure commitment in the execution of the projects.”

The UBE Act of 2004 also established the Universal Basic Education Commission (UBEC) to coordinate, alongside the states and the local governments, the delivery of basic education in the country and to monitor the implementation. Although, the UBE Act recognizes that the funding of basic education remains the responsibilities of the states and the local governments, it gives UBEC the responsibility for managing the 2% of the Consolidated Revenue Accounts allocation to basic education as intervention fund to “assist” the states and the local governments in the implementation of the UBE.

UBEC: A Funding Agency or an Education Agency?

Perhaps, the planners of the UBE must have persuaded themselves that the major reason the UPE failed was the chaos that attended its funding. The issue of money therefore loomed larger than any other consideration in their planning for this latter initiative. Although the Act also assigns the responsibilities for policy formulation, prescription of minimum standards, among others to UBEC, it is clear that its governance structures were designed primarily to manage funds and ensure “judicious utilisation” of funds in line with the approved action plans submitted by the states.

Although one of the main goals of basic education is to “inculcate permanent literacy and numeracy, and ability to communicate effectively” in the children, there is no evidence that the Commission considers the progress by states in meeting this fundamental objective in awarding its grants.  Rather, its preoccupation with funds utilisation would suggest that the Commission understands its role as primarily that of funds management.

In support of this view is the fact that the department responsible for conducting annual monitoring exercise is the Finance & Accounts Department of the Commission, which then prepares “progress report on the implementation of the UBE programme for presentation to Mr. President as required by Section 9(h) of the UBE Act, 2004¹⁸.” Needless to say, UBEC report of “progress” to the president is based on funds being “judiciously utilised” rather than actual progress in pre-determined learning objectives. The fact that UBEC did not find it necessary to withhold funds to any of the states between 2005 and 2019 would mean also that the Commission was satisfied that the states actually utilised the funds for the purposes that were approved in their action plans regardless of whether actual learning was taking place in the schools or not¹⁹.

More often than not, public conversations about education invariably comes to how much government is spending on education, with the famous UNESCO prescription of 26% of national budget as the benchmark. However, while Nigeria may be spending less on education proportionate to its budget size, the country has spent more in absolute terms since the advent of the UBE than at any other time in its history. Available reports indicate that between a 15-year period (2005-2019) the sum of N342 billion has been released in grants alone to all the states and the FCT. Adding states’ matching contributions will bring this amount to N684 billion.²⁰ If other interventions by UBEC, staff salaries and other recurrent expenditure by the states, as well as donor support funds are added, this amount gets much bigger. However, it has been widely noted that for most developing countries, there is a “fairly weak” correlation between increased resource allocation to the education sector and improved learning outcomes21. This appears to be the case for Nigeria. The problem seems to be that of allocative efficiency than the amount being allocated itself. Even as a funding agency, UBEC funding has failed to target those factors that are likely to improve learning.

Fund Allocation and Learning Outcomes

The UBEC disbursement takes place quarterly, provided that on each occasion the state is able to provide the exact sum to match the UBEC disbursement based on the action plan that it must have submitted to the Commission. Upon receiving the grants, states are required to expend 5% on pre-primary/nursery, and 60%, 35% on junior secondary. For each level of basic education, 70% of the allocation received is to be apportioned for infrastructure, 15% for manpower development (which includes non-teaching staff) and 15% on instructional materials.

However, at best, this spending guidelines appear to be based more on assumptions than hard evidence in terms of what needs to be done to educate children. There may not be universal agreement on what factors actually determine learning in different countries or regions of the world, and even between rural and urban areas within the same country. However, there is a strong consensus that inputs such as textbooks and learning materials, effectiveness of school inspection, teacher and teaching quality, quality of curriculum and instructional time, rank much higher in determining whether children learn or not than “hard inputs” like school buildings and furniture.²²

Table 2: UBEC Funding Formula

Pre-Primary	5%
Primary	60%
Junior Secondary	35%

However, it is possible yet again, that the planners of UBE have favoured classroom construction above everything else, based on their UPE mindset. The Act itself betrays this project mindset when its states categorically that the 50% contribution by the states is towards project execution: “the State shall contribute half (50%) of the total cost of projects to be executed in the State [in order to] ensure commitment in the execution of the projects. It is also possible that allocating the bulk of the resources to construction of classrooms provides perverse incentives for everyone involved, as some have argued. However, another possible explanation is that in designing the spending formula, it was not considered necessary to establish first what inputs contribute most to learning outcome and distribute the resources accordingly. In fact, where classroom has featured as a factor in learning, it is usually in relation to how many children should be in a class to make for effective teaching. Even then, there is no consensus on whether smaller class size actually helps children to learn better²³.  A beautiful classroom may also attract children to come to school, but it does not in itself guarantee that they would learn.

This is not an argument against classroom and beautiful schools. But if after 24 years of UBE and billions of Naira spent, most of the students still cannot read or do simple arithmetic after completing basic education, it means our approach has not worked, and we cannot persist on doing the same thing that we have done from the start. We must therefore, reset our spending priorities and allocate more resources to those factors that can actually help us out of this learning crisis.

Whose Priority Counts: the Federal or the Local?

There is yet another problem with the UBEC prescriptive approach, which has turned out to be an encumbrance to the states and the commission as well. As at May 2023, UBEC reported that several states have failed to access funds allocated to them for basic education and up to N46 billion that should have gone the states was still in the Commission’s account.²⁴ It is easy to understand why this is so.

The UBE Act made it clear that the “Federal Government’s intervention under the Act shall only be an assistance to the states and the local governments for the purpose of uniform and qualitative basic education throughout Nigeria.”²⁵ In essence, the Act recognises that the primary responsibilities for basic education belong to the states and the local governments, and the Federal Government is only assisting for the purpose of maintaining quality and uniformity. Therefore, by asking each state to contribute 50% as matching grants, it ensures that all the states in the country are uniformly committed, and that the same amount of money is guaranteed to each state from the federal pot.  Herein lies the problem. A framework that guarantees uniformity may not be helpful in achieving quality. Since the baseline standards are not the same for all the states, priorities are therefore bound to be different in terms of what is required to achieve quality of education in each state.

While the Act states that the Federal Government is “only assisting” the state, it seems to have no qualms prescribing to the states what its spending priority should be. Once the state pays the counterpart fund and draws down, the entire funds must be utilised within the guidelines specified by UBEC, regardless of what the state may consider as its priority. For example, the decision to disarticulate Junior Secondary from the Senior Secondary has left many states requiring more resources for junior secondary in recent years. But they still have to stay within the 35% prescribed in the funding framework. With stories of dilapidated classrooms and generally decrepit learning environments still widespread across the country, it is difficult to argue against allocating 70% of the grant to infrastructure. However, situations do vary from state to state. Nevertheless a state that considers teacher training or instructional materials as its priority is still constrained to spend 70% of the grant on infrastructure. For states like this, the UBEC grant then become a constraint. Such states would therefore rather not take the grant. That way, they can freely decide how to expend whatever they should have paid as counter-part fund.

Search for Appropriate Governance Structure

It is a trite principle in governance that funds should be allocated closest to the point of implementation or where results are most expected; in this case, the schools. This has not been the case with the UBE. The constitutional responsibility for basic education is that of the Local Governments. But this is true only in nominal terms. In majority of the states, the involvement of local governments in the administration of basic education does not exceed payment of staff salaries.

Figure 1: Current structure:  centralised, top-to-bottom.

Since inception, the management of basic education has been a two-way business between the states and the Federal Government, leaving out two critical stakeholders, the local governments and the schools, which essentially play no role in deciding how resources are allocated or expended.

Although the basic education system is represented at the federal level by the UBEC and at the state level by the SUBEB, the local governments are still stuck with the Local Government Education Authority (LGEA), system, effectively excluding that tier of government from the UBE framework, in terms of policy making and implementation. The “action plans” prepared by the states are about what should happen in the schools. Unfortunately, the schools do not have any inputs into these. Although attempts have been made in recent years to mobilise communities to play a lead role in the management of their schools through the School-Based Management Committee (SBMC), this has not met with much success.

In 1996, the National Council on Education directed each state to set up a School-Based Management Committee (SBMC) for each school. The committee, which brings together heads of school, parents, teachers, pupils and local leaders, including religious and community leaders, is to serve as the governing board for each school. Where they have been trained, the SBMC are to prepare the annual School Development Plan, including infrastructure and operational needs. Various reports observe that most schools did not set up this committee, or where they exist, they have not functioned well enough. However, SBMC has been shown to have positive effect on school performance and even pupils’ learning achievements in places where they have been effective²⁶. If nothing else, they serve as the first-line monitoring body in ensuring that children come to school and teachers turn up to teach.

The current system that rigidly prescribes spending formula to states needs to be abolished. Apart from the misalignment between inputs and what is required to get the desired outcomes, it also constrains the states and overlooks their priorities. In creating a more derived system, Local Universal Basic Education Board should be set up to replace the current LGEA. This immediately integrates the local government into the UBE framework. Establishment of the SBMC needs to be elevated above policy prescription and be made a legal requirement as an integral part of the UBE management system. The action plan that would be submitted to UBEC, especially those that have to do with physical infrastructure and teaching materials, should be based on each school’s development plan, through the LUBEB, and the SUBEB. Once the grants are released, it would follow the same route back to the school to implement the development plan. Different accountability measures can be devised to ensure effective utilisation by the schools, but the key principle is decentralisation which supports the community to take primary responsibility for the schools, while government enforces accountability to ensure “judicious utilisation” of funds released to the SBMCs.

Figure 2: Decentralised: Bottom-to-top

A decentralised approach ensures that all schools receive equal attention. In a centralised system where the decisions on construction or renovation of classrooms, for example, are taken at the SUBEB level, it is difficult not to overlook some schools or to ensure that resources are equitably distributed among schools. This partly explains why even in states where education has received strong attention, there are still schools in terrible conditions. The SBMC approach will ensure that every school has opportunity to make its case and to receive fund for its infrastructure requirement.

Bringing Private Schools into the Public Education Mix

Nothing has made a mockery of government’s promise of free education like the explosion of private schools across the country. It is difficult to establish how many private primary schools there are in the country. It would however be safe to assume that there are more private schools in the country today than there were before the UBE was launched in 1999. It is perhaps, one of the biggest ironies of modern education in Nigeria that the more money government spends to provide free education, the more parents are willing to pay for private school for their children.  In fact, anywhere a private school exists, it would be difficult to find parents who would rather send their children to a public school, unless they are too poor to afford even the cheapest private school or they really don’t care about education at all.  Why is this so?

In almost all cases that have sought to compare performance between public and private schools in terms of students learning achievements, the private schools have been shown to perform better. More often than not, they operate with no government support or supervision, yet there is overwhelming evidence that private schools tend to deliver better learning outcomes²⁷.

In 2011, researchers were able to identify 12, 098 of such private schools in Lagos, with total enrollment of 1, 385, 190 pupils, representing about 61% of total enrollment in the state²⁸. Even in Makoko, arguably one of the world’s poorest urban slums, 87% of parents preferred private schools for their children. Most parents interviewed said they prefer private schools because they can see that teachers are present and are teaching. They can also see that their children are able to master basic skills that other children attending government schools are not able to²⁹. Another explanation for why parents have preferred private schools is its “short-route” accountability system. The client/service provider relationship between parents and the schools tends to put the schools on their toes. Although it has been found that teachers in private schools are generally less qualified and less paid than their counterparts in government schools, they tend to work harder because one dissatisfied parent—customer—could lead to loss of job by the teacher and loss of revenue to the school owner. The reasons given by parents in Lagos have been found to be generally consistent with other parts of the country.³⁰ It is also interesting to see how these reasons align with some of the factors identified earlier as contributing most to learning outcomes:

Table 3:

Like Härmä noted, “Due to wide-ranging failures, parents are having to buy educational services and are missing out on their rights to free primary education³¹.”  But this situation is not peculiar to Nigeria. Several other countries have also experienced sudden explosion in private schools in recent years in a situation not too dissimilar to that of Nigeria. However, countries have responded differently. In 1981, Chile introduced its now world-famous educational voucher system that allows children in elementary and secondary schools to use government-issued vouchers to either pay for a year of education at a public school or to contribute to tuition charged in a fee-paying private school.  In India, the Rights to Education Bill, an equivalent of our UBE, mandates all private schools to reserve 25% of their seats for “poor and marginalised children” at cost to government.³²

In both cases, but especially in the case of India, government appears ready to penalise itself for failing to deliver on its promise of quality education in public schools. It also acknowledges that private schools are performing better and is willing to help children from poor homes to also have access to better education, thereby closing the gap on social inequality. It is important to note that in both cases of Chile and India, these interventions are without prejudice to efforts to make public schools better. But governments in both countries realise that if they must wait for their reforms to bear fruits, children would outgrow schooling opportunities. Private schools on the other hand tend to offer lower hanging fruits that governments could tap into if they must deliver on their promise of quality education for all.

Governments at the state and federal levels in Nigeria have to see the need to engage the private schools better.  This has to start with the government acknowledging that its failure to deliver on the promise of education that is driving parents to the private schools. At the moment, government at all levels, is either indifferent or antagonistic to private schools. This needs to change. Government must recognize the role they play in educating Nigerian children and support them accordingly. After all, every single child that is able to achieve the specified learning objectives moves the government closer to fulfilling its plan to get every child educated, regardless of whether this was done in public or private schools.

Improving Teaching and Teachers

If there is one point on which everyone agrees, it is the most important factor that determines whether children will learn or not is the quality of teaching and teachers. It seems natural, therefore, that the most important reform that needs to take place in our schools is that which focuses on improving the quality of teaching and instructions. As is widely acknowledged, the quality of any

education system cannot rise above the quality of its teachers. Our main concerns therefore should be:

• How do we get the right people to become teachers?
• How do we develop them into effective teachers?
• How do we target support to keep them on the job and ensure children learn from them?

To answer these questions, we must prioritise reform of the teacher education and recruitment system as well as in-service training system. According to the Teacher Registration Council of Nigeria (TRCN), a qualified teacher is one who holds the minimum teaching requirement of the Nigeria Certificate of Education (NCE) and is also registered with the TRCN as a teacher. In May 2023, the Council reported that 83% of teachers in Nigeria’s public schools are qualified, while only about 30% of those who teach in private schools are qualified³³. TRCN’s assessment of “qualified” teachers may be true, but it hides the grim reality of the crisis of teacher quality and competence across the country. Qualification does not necessarily mean quality. This would explain why many private schools are getting results with “less qualified” teachers than the public schools.

In states where Teacher Development Needs Assessment (TDNA) has been successfully carried out; the results show that majority of teachers who are in service are not able to pass basic literacy, numeracy and pedagogical tests although they are mostly qualified³⁴.

One thing that is consistent with all countries that have witnessed remarkable and sustained improvements in teaching over the years is that they ensure that only the best candidates get to become teachers and entry is strictly controlled. This is the direct opposite of what obtains in Nigeria where standards are lowered for those who want to become teachers and entry appears to be free-for-all. This has to change.

Pre-service Training

The National Policy on Education specifies that the minimum requirement for becoming a teacher in Nigeria is the Nigeria Certificate of Education (NCE). Reform of the Colleges of Education therefore has to be a core component of any efforts to improve the quality of teaching at the primary school level. The starting point for the reform of teacher education must be the National Commission for Colleges of Education (NCCE), which sets standards and regulates the Colleges of Education in Nigeria. The good news here is that the NCCE itself appears to be aware of the

challenges to teacher education in the country and has actually demonstrated a strong appetite for reform. What is required is to provide the right political leadership that will drive the reform in a coherent manner. Some key issues that must be focused on include, but not limited to:

• Review of colleges of education entry requirement to ensure that only top-quality candidates are admitted at any level.
• Review of curriculum and training methods to align with primary education curriculum.
• Incentives to attract the best and the brightest to the colleges, and to keep them in teaching.
• Inter-agency collaboration to match teacher supply with demand.
• Governance of the reform to ensure effectiveness and sustainability³⁵.

In-service Training

The biggest threat to improving learning achievements in public schools is that majority of the teachers lack the knowledge and skills required to teach effectively. These teachers also potentially pose the most serious obstacles to any efforts to improve the quality of teaching in the schools. Many have found themselves in teaching as a last resort, they are therefore usually demotivated and more interested in keeping their jobs because of the salaries rather than in helping the students to learn. This makes intervention politically contentious and delicate. Experience has however shown that the most successful teacher improvement programmes in the country are those that are able to guarantee job-security while creatively and continuously improving capacity in classroom contexts. This is consistent with the author’s experience in Kwara State.

Table 4: The Case of Kwara State

From Zeros to Heroes. In 2008, Kwara State decided to administer an assessment test to teachers in the state’s public schools as part of it teacher development programme. The test was based on the Primary 4 curriculum for English, Mathematics and Civics, as well as some pedagogical questions. After weeks of negotiation with the union of teachers, an agreement was signed, witnessed by the state’s Parents-Teachers Association (PTA), that no teacher would be sacked or penalised regardless of his or her performance in the test. With the help of the DFID’s Education Sector Support Project in Nigeria (ESSPIN), testing experts were brought in from Oxford University to design the tests. After a dry run in Lagos and Jigawa states, the test was administered with the minimum pass threshold set at 80% for each of the subjects. About 19,000 teachers sat for the test, but less than 100 were able to meet the minimum threshold. This sent shockwaves across the state. But having committed to not penalising any teacher for failing the assessment, we were now faced with a serious problem, worse than anyone could have imagined before the test was conducted. With the help of our partners, the ESSPIN, we developed a Teaching Manual (TM) for every topic in the curriculum from Primary 1-6 for literacy and numeracy. The TM was like a cookery book, which did not really require the teacher to have any prior subject or teaching knowledge. The teacher only needed to be able to read and follow the clearly-stated instructions on how to teach each topic on the curriculum. We then called for volunteers from the three Colleges of Education in the state and organised them into the State’s Schools Improvement Team (SSIT). We also set up another group made up of senior teachers, especially those who were able to achieve the minimum threshold in the tests and organised them into the Schools’ Support Officers (SSOs). After undergoing their own training, the SSITs then trained the SSOs who would then train the teachers on how to use the TMs. All the schools in the state were now organised into clusters of not more than five school per cluster under one SSO. Each cluster met every weekend for training on the use of the TM by their assigned SSOs. Thereafter, the SSO visited each school at least once during the week to observe the teachers in action. These observations were then discussed at the cluster meeting at the end of the week. The SSOs routinely report to the SSITs, who advise them on a continuous basis. The State Government took notice of the teachers’ commitments and rewarded them by paying the 27.5% Teachers Special Allowance that they had demanded before the exercise. More importantly, the parents were quick to take note of the transformations in the schools, and many began to return their children to the public schools.

What the experience from Kwara State as well as other similar donor-supported interventions on Teacher Development Programme (TDP) in some states suggest is that even the complex problem of teachers’ development can be tackled with little or no political risk. These approaches have to be studied more and scaled up across the country. Ideally, each state should take responsibility for the training of its own teachers. However, the Federal Government still shares in the responsibility to ensure that children are able to learn. Therefore, federal level agencies need to get involved as well.

At the moment, it is not clear which federal agency has the primary responsibility for teacher development in the country. The TRCN says its mandates include “accreditation, monitoring and supervision of the courses and programmes of teacher training institutions in Nigeria to ensure that they meet national and international standards. The institutions include the Colleges of Education, Faculties and Institutes of Education in Nigerian universities, Schools of Education in the Polytechnics, and the National Teachers Institute.”³⁶ However, this statement appears merely aspirational. In reality, it is the NCCE that accredits and monitors courses for the colleges of education, while the National Universities Commission (NUC) does the same for the universities. Even regarding registration of teachers, the TRCN hardly has anything more than exhortatory power. By its own account, more than 70% of teachers in private schools are still able to teach without the required qualifications³⁷.  Therefore, reform of key institutions charged with the responsibility for professional development and certification of teachers such as the National Teachers Institute (NTI) and the TRCN must also be listed as priorities to streamline their activities and align them with the new approach to teacher development.

Attracting the Best and Motivating Teachers to Teach Better

More brilliant students have multiple career options and, more often than not, teaching is not one of them. Apart from the low salaries, limited opportunity for career advancement and general perception of teaching as a ‘lowly’ profession are major barriers to attracting the right quality of candidates into the classroom. Our teaching reform programme must therefore include a deliberate strategy to attract the right calibre of people into the classrooms. Strategies to consider must include those with potentials to raise the profile of the profession, give financial reward and broaden opportunity for career advancement.

To raise the profile of the teaching profession, we must start with raising the prestige of the teacher training institutions. One way to achieve this is to develop effective mechanism for deliberately selecting applicants into the teacher training colleges and giving incentives, including scholarships, bursaries and guaranteed employment to candidates.

Another important area where Nigeria has been left behind is in the career pathways for teachers. In seeking to attract the best and keeping them on the job, we need to define different pathways for

career progression of teachers that is both financially and professionally rewarding, outside the traditional civil service cadre. Government has announced a plan to implement a different framework for paying teachers, the Teacher Salary Scale (TSS). However, a package of incentive that merely seeks to increase teachers’ salaries and grants some allowances is not sustainable in the long run, unless such remunerations are also tied to clearly-defined career framework that entrenches professionalisation. Moreso, there is no evidence in the literatures that higher salaries necessarily make teachers better.³⁸

A donor-led initiative seeking to introduce this new career path for teachers has been on for a couple of years. It is not clear how much progress has been made on it, but it is worth revisiting. Generally, what the proposed career path for teachers seeks to do is to offer a formal and sustained recognition for teachers throughout their career, which reflects and rewards their experience and competence. Below is an illustration of possible five-stage career pathways that may be adopted; performance criteria as well as advancement process for each level will be specified accordingly:

Table 5: Career pathway for teachers

In addition to raising the prestige of teachers, career advancement will also come with significant financial compensation, while offering opportunities for continuing professional development. This will open the way for real professionalism in teaching. It is also important to note that the kind of resistance that has been witnessed in some states over the Teacher Development Needs Assessment (TDNA) would have been bypassed since passing such test would then be incentives-driven and would become a necessary process in career progression.

Monitoring Learning Achievements

Despite the general view that Nigerian education system over-examines children, in reality there is very little evidence of national assessment and no evidence of participation in international learning assessments. National assessments help a country to know if the curriculum’s intentions are being attained at various levels. Most countries that routinely carry out these assessments usually administer them in the transition years: end of Primary 3 and end of Primary 6. The key question is what do we expect a child to be able to do at the end of each of year of contact with the school curriculum, especially in literacy and numeracy? Assessment at the end of Primary 3 does not only help us to know how much progress children have made before they transit to upper primary, it also gives enough room for remedial interventions. Without such assessments, it would be impossible to know and address the issues of quality generally, or to identify imbalance in learning achievements along gender, regional other demographic classifications.

International assessments on the other hand, help a country to compare the learning achievements of its students with students of other countries on the same grade level in order to obtain a “comparative framework” to evaluate their curriculum and address deficiencies. One of such international learning assessment programme carried out at the primary school level is the Trends in International Mathematics and Science Study (TIMSS), organised by the International Association for the Evaluation of Educational Achievements (IEA), which also runs the Progress in International Reading and Literacy Study (PIRLS). TIMSS tests the proficiency of students across the world at various grade levels “to provide important background information that can be used to improve teaching and learning in mathematics and science³⁹.” Since it started in 1995, five Asian countries have consistently dominated the performance league by a distance: Singapore, Chinese Taipei, Korea, Japan and Hong Kong. So far, only six African countries have participated: South Africa, Morocco, Tunisia, Botwana, Egypt, and Ghana. South Africa, which has participated longer than other African countries says the assessment would allow South Africa to compare it curricula and achievement in mathematics and science with those in industrial countries⁴⁰. South Africa also participates in the Southern and Eastern Africa Consortium for Monitoring Educational Quality (SACMEQ) programme, established in 1995 by 15 countries in the region.

Performance in TIMSS have triggered parliamentary debates in some countries about their educational systems.⁴¹ National and international assessments can indeed form the basis on which policy makers and education planners can take informed decisions on how to improve the quality of education in the country.

Summary of Recommendations

1. For 24 years of its existence, the Universal Basic Education Commission (UBEC) has functioned more as a funding agency. The Commission needs to undergo a deep structural review to enable it to take on more responsibilities for improving quality in public schools.
2. The UBE Act, 2004, needs to be reviewed to take into account the experience of the last two decades regarding its implementation, and the identified challenges. For example, the provision on counterpart funding and expenditure prescription needs to be reviewed. Spending priorities need to be shifted towards factors that impact most on learning outcomes like textbooks, inspections, teacher recruitment and training.
3. The governance of basic education needs to be decentralised to enable schools and local governments to play more active roles in decision-making, especially in resource allocation. Therefore, the Local Universal Basic Education Board (LUBEB) needs to be established. In addition, the School-Based Management Committee (SBMC) should be made a legal requirement for each school so as to mobilise community leaders to play a more active role in the management of their schools.
4. Government needs to engage more with the private education providers and actively support them. The cases of Chile and India are indicative of what government could do. One option is for government to undertake to supply textbooks to all registered private schools. This will take away from the cost that parents have had to bear in sending their children to these schools.
5. Reform of the colleges of education, and teacher training institutions should be integral to any effort to improve the quality of teaching and teachers in schools. This reform must raise entry standards and provide incentives, including scholarships, bursaries and guaranteed employment that would attract the right talents into the schools.
6. A new career path for teachers needs to be established that will provide the framework for the planned Teachers’ Salaries Scale (TSS) and ensure greater professionalisation as well as career progression.
7. Agencies and institutions that have responsibility for teachers’ training and certification need to be better coordinated to achieve greater efficiency. Colleges of education should provide teacher training up to degree level, while universities should offer post-graduate trainings only. The roles of NTI and the TRCN also need to be streamlined. One of them is surplus to requirement.
8. A National Assessment on Progress in Basic Education needs to be insitutionalised to carry out learning outcome assessments in literacy, numeracy and reading at various grade levels across the country, but especially in Primary 3 and Primary 6. This needs to be an independent body that reports to the President.
9. Nigeria must ensure participation in international assessments of learning progress. This will not only help to monitor progress towards achieving the SDG 4 and national objectives for UBE, it will also help the country to benchmark its educational systems against those of other countries at the global, regional and sub-regional levels.

Bolaji Abdullahi is a policy practitioner and education reform enthusiast. He is former Commissioner for Education in Kwara State and former Minister of Youth Development and Sports in Nigeria.

 Footnotes

[1] The 4^th amended version; The portion in italics is author’s emphasis.

[2]Section 18 (3) of the Constitution of Federal Republic of Nigeria, 1999.

[3]Section 15 (1) of the Child’s Rgihts Act, 2003.

[4] Akinwunmi F.S. Trends in School Enrolment of Primary School Education in Nigeria between 1984 and 2002. https://www.academia.edu/43755361/ and UBEC website: https://ubec.gov.ng/

[5] https://guardian.ng/news/nigeria-now-has-20-million-out-of-school-children-says-unesco/

[6] https://guardian.ng/news/75-of-nigerian-children-cant-read-simple-sentence-says-unicef/.

[7] Akinwunmi F.S. Trends in School Enrolment of Primary School Education in Nigeria between 1984 and 2002. https://www.academia.edu/43755361/ and UBEC website: https://ubec.gov.ng/

[8] Marg Craspo (1983). Universal Primary Education in Nigeria: Its Problems and Implications. African Studies Review, Vol. 26, No. 1 (March 1983), pp. 91-106, Cambridge University Press.

[9] Marg C (1983). Op. cit.

[10] Marg C (1983). Op. cit.

[11]Uchendu, V. (1979) Education and Politics in Tropical Ltd.

[12] Blueprint: Implementation Committee for the National Policy on Education, 1977-1979, Government Printer, Lagos 1979, pp 55-59 Cited in Dennis A. Africa Spectrum, 1986, Vol. 21, No.2 (1986, pp. 163-174

[13] Marg Craspo, 1983 Opp. Cit.

[14] West Africa, January 16, 1978.

[15] Dennis A (1986). The Deepening Crisis in Nigerian Education: A Contribution to the debate on the demise of Universal Primary Education (UPE) Africa Spectrum, Op.cit.

[16] Bray, M. (1981) Universal Primary Education in Nigeria.: A Study of Kano State. London: Routledge and Kegan Paul.

[17] Marg Craspo, 1983 Opp. Cit.

[18] UBEC Annual Report 2018. (Abuja, 2018), p.45

[19] The closest thing to monitoring learning standards in the Commission is done by its 14-member Quality Assurance department whose reports, according to the department itself, no one really cares about: “The challenges that the department encountered is, among other things: 1. Non-implementation of recommendations contained in quality assurance reports by stakeholders (UBEC, SUBEB, LGEA, Schools and stakeholders).” See UBEC Annual Report, 2018, Ibid, page 63.

[20] See also http://yourbudgit.com/wp-content/uploads/2018/11/education-financing .pdf

[21] Pritchett, L (2013). Rebirth of Education: Schooling Ain’t Learning. Centre for Global Development, Washington DC, 20036.

[22] See for example: Muvawala J. (2012) Determinants of Learning Outcomes for Primary Education: A Case of Uganda; Journal statistique africain, numéro 15, août 2012. World Bank, 1990, Primary Education Policy Paper, Washington DC and Pritchett L. (2013). Op. Cit.

[23] Muvawala J. (2012) Determinants of Learning Outcomes for Primary Education: A Case of Uganda; Journal statistique africain, numéro 15, août 2012

[24] https://punchng.com/basic-education-suffers-as-governors-fail-to-access-n46-2bn-ubec-fund/

[25]The Compulsory Free, Universal, Basic Education Act, 2004

[26] https://riseprogramme.org/publications/importance-functioning-school-based-management-committees-sbmcs-evidence-nigeria

[27] Gruijters, R. J., Alcott, B. and Rose, P. (2020) The Effect of Private Schooling on Learning Outcomes in South Asia and East Africa: A Within-Family Approach. Working Paper No. 20/7., REAL Centre, University of Cambridge. 10.5281/zenodo.3686733

[28] Härmä Joanna, (2011), Private responses to state failure: the growth in private education (and why) in Lagos, Nigeria Dr. https://ncspe.tc.columbia.edu/working-papers/files/OP215.pdf

[29]. Härmä, J. (2011). Op.cit.

[30] Umar, A. 2008. "Nigeria". In Low-cost Private Education, ed. B. Phillipson. London: Commonwealth Secretariat.

[31] Härmä J. (2011). Op.cit.

[32] Chudgar A and Quin E., (2012) Relationship between private schooling and achievement: Results from rural and urban India. Economics of Education Review, Volume 31, Issue 4, August 2012, Pages 376-390

[33] https://saharareporters.com/2023/05/24/more-half-private-school-teachers-south-west-nigeria-not-qualified-registration-

[34] https://dailytrust.com/paradox-teachers-failing-while-their-students-pass-exams-4/

[35] A 2011 National Teacher Education Policy (NTEP) outlines similar objectives but no serious action appears to have been taken towards implementing the recommendations.

[36] http://trcn.gov.ng/file/Introducing%20TRCN.pdf

[37] https://www.thecable.ng/trcn-says-70-of-private-school-teachers-in-southwest-are-unqualified

[38] Pritchett, L (2013). Op. Cit

[39] https://timssandpirls.bc.edu/home/pdf/T2015_TIMSS.pdf

[40] Vincent G. and Thomas K. (2008). Op. cit.

[41] Vincent G. and Thomas K. (2008) Assessing National Achievement Levels in Education. The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433

By Adebayo Ahmed | The new dispensation combined with quick policy actions on fuel subsidies and foreign exchange, as well as the arrest of the suspended central bank governor, has brought the question of monetary policy to the front burner. With President Bola Tinubu announcing during his inaugural speech the need to “clean” the Central Bank of Nigeria (CBN) as well as the need to reduce interest rates to promote MSME-led growth, the question therefore revolves around what the CBN has been doing wrong, and what is the way forward.

Fig 1: Inflation. Source: National Bureau of Statistics

The backdrop to this question is the uncomfortably high and rising inflation which hit an 18-year high of 22.41% in May. Inflation at over 22% is a big challenge for any economy. It means that prices double in less than four years. It means that salary earners lose 22% of their purchasing power every year. It means that the government would need to generate 22% more revenue just to provide the same public services. It means that the Naira will likely weaken by 22%, less whatever global inflation is, in the next year. Inflation at 22% means that the challenge of moving the Nigerian economy forward and improving the lives of ordinary people forward is significantly harder.

This high inflation is especially worrying for food which, at nearly 25%, means that the poorest who as at 2019 already spent roughly 60% of their incomes on food, are in a very difficult position. When combined with other recent policy efforts, such as the removal of fuel subsidies, the seriousness of the challenge should be apparent as inflation has been projected to surge even higher.

Given that keeping prices “stable” or keeping inflation low is the core monetary policy objective of the CBN, then it is easy to make the case that the central bank has been, and is, failing its core mandate. If you add popular annoyance against exchange rate issues, then the scorecard is likely to be very poor.

In this note, we will argue that the failure is due to the CBN’s misunderstanding of its powers in terms of what it can and cannot do. This misunderstanding has led it down the unconventional policy route which, as expected, has resulted in higher inflation and not much else. That misunderstanding however is a good lesson for the CBN going forward, especially in the context of the new government’s zeal to set a more credible path for monetary policy.

The big trade-off in monetary policy: Taming inflation versus promoting growth

First, a simplification of the big trade-offs when thinking about monetary policy, which is really all about controlling and managing the money supply to ensure that there is just enough money in circulation to incentivize real economic growth in a sustainable way. Of course, money (today) is really just a piece of paper (or a digital record) that has no intrinsic value. That piece of paper does not cause rain, or fight terrorists, or reduce bottlenecks at the ports, or teach young people physics. In economics we like to say that in the long-run money is neutral. If you wanted more water for agriculture, you would need to build irrigation facilities; and if you wanted to fight terrorists disrupting your economy, you would need more policing and intelligence.

This neutrality of money has very important implications for monetary policy. The first is that higher levels of money supply for a given level of economic activity just means higher prices (also known as higher inflation). Imagine a hypothetical yam-eating society in which their central bank decided to double everyone’s income by a cash transfer but the number of yams available, the real yam economy, remained the same. The only outcome will be higher prices for yams or yam inflation.

In practice, economies are a lot more dynamic but the principle is the same. Controlling the amount on money supply is the key factor behind managing inflation. If your money supply grows too fast relative to your real economy then you have higher inflation, and vice versa. Ergo, if we observed that inflation was getting too high then the expected policy response would be to reduce the growth of money supply.

There are many tools for reducing the growth of money supply but the conventional primary tool is through an increase in interest rates. The logic is simple. At the margin, higher interest rates make borrowing more costly which means credit, to the private sector or governments, should reduce, and which means money supply reduces as well. On the flip side, higher interest rates also incentivize banks to park money at the central bank to collect more interest which also tends to reduce money supply. There are various other channels but in general higher interest rates tend to reduce money supply.

But higher interest rates also have other effects. Higher interest rates tend to slow down the economy. If you think of the channel through slowing credit growth then it is pretty straightforward to see how. So, the question then becomes, when faced with higher-than-normal inflation, should policymakers choose to allow higher inflation or raise interest rates to reduce inflation, even if it limits economic growth or employment?

The answer is almost always to opt for lower inflation. The first rationale behind this is because inflation affects everything, even the interest rate itself. Think for instance of our yam economy and imagine inflation was 25% a year. What this would mean is that even if interest rates were as high as 20%, the providers of credit would still be losing value. In that economy, if a person loaned out the equivalent of one yam, at the end of the tenor, the principal plus interest would not be able to buy that same yam. In essence, real interest rates would be negative. So, you would need even higher interest rates just to incentivize people to stand still in real terms.

The same dynamic works with exchange rates in an economy with higher inflation. Imagine inflation in Naira-denominated yam economy was 25% but inflation in our neighbours’ CFA-denominated economy was only 1%. It would mean the Naira would have to depreciate by about 24% relative to the CFA just to stand still. If it didn’t, then yams from our neighbors would be systematically cheaper and everyone would opt for them and our economy would suffer.

The impact of inflation is so ubiquitous, from wages to government spending to interest rates to exchange rates, that when faced with a choice, monetary policy almost always has to opt for lower inflation even if it comes with some costs.

But that is not all. Imagine our yam creditor who has to decide what “real” interest rate to charge to ensure that she doesn’t end up losing value at the end of the term. She has to guess what inflation in the future would be. If she thinks inflation will be high then she has to charge a high interest rate to make up for it. On the other hand, if she thinks inflation will be low, then she can charge a lower interest. In essence, her expectations about inflation in the future affect what she does today, and therefore affects what really happens in this yam economy today. What this means is that, even if nothing happens, if people start to expect that inflation will be high then there are consequences to that.

From the perspective of monetary policy, this means that it is not enough to choose lower inflation, but people need to believe that you will choose lower inflation and do what needs to be done to tame inflation. If people start to believe that inflation will be higher, then people start to act as if inflation is high and that results in all the consequences of high inflation even if nothing significant happens.

Supply shocks and optimal monetary response

An expansion in money supply is not the only thing that can cause inflation. Supply shocks can also have impacts on prices and inflation as well. Think about our yam economy and imagine some goats came and ate up half the yams. Given the same amount of money supply in circulation it will simply mean that prices will go up, otherwise known as higher inflation.

What should monetary policy authorities do about supply shocks? The conventional wisdom is if you think those shocks are temporary then you can try to just ignore them if they aren’t too large. But if you think those are not “shocks” but permanent changes in supply, then you have to manage money supply to reflect those permanent changes. For example, in our yam economy where goats ate half the yams, the ideal monetary response would be to reduce the money supply to fit the new reality of an economy that is only half as large as it used to be.

What monetary policy authorities typically do not do is to try to directly tackle those supply shocks with money. Remember that money is neutral and you typically cannot use money to kill goats, or construct dams, or train teachers, or neutralize COVID. It does not mean that other parties cannot do this to help tackle inflation. Other parties can. The convention is to let the other parties tackle supply shocks because in most cases the shocks are not only about money.

Even where money could be impactful, the conventional wisdom is to let the parties that are best able to find and channel that money, usually the financial sector or the government, to do what they are good at. This is because if those issues are tackled with monetary policy, then you will have to weigh the impact against the costs of higher inflation. In general, higher inflation is always worse.

In essence, even though supply shocks can have an impact on inflation, the monetary policy response to supply shocks ideally would be to be more focused and ruthless in managing money supply.

CBN and the wages of unconventional monetary policy

The recent history of monetary policy in Nigeria can be described simply as the CBN trying to use monetary policy for things that monetary policy could not do, and choosing to focus on other issues while abandoning its inflation mandate. As expected, the outcome from not choosing lower inflation has been higher inflation without any real impact on the many other things it tried to do because, you know, money is neutral.

Many may have forgotten but at his inaugural speech in 2014, the suspended CBN governor, Mr. Godwin Emefiele, wrote that “the Central Bank [could not] afford to sit idly by and concentrate only on price and monetary stability”. He essentially promised to use the CBN for developmental activities such as “credit allocations and direct interventions in key sectors of the economy”.1 To be fair, at the time in 2014, inflation was somewhere around 8% and if inflation is low then there is scope for either monetary expansion or interest rate reductions. The governor chose the latter, and chose to expand money supply not through the financial sector, which is typically the better allocator of credit, but directly through its interventions and eventually lending to government.

Fig 2: Growth in money supply (M2) with trend in red. Source: Central Bank of Nigeria2.

The CBN under his direction, changed from what had been a relatively successful decade of limiting money supply growth which resulted in single digit inflation, to increasing the growth of money supply. As Figure 2 shows, regardless of what else was happening in the economy, what is clear is that there was a change of trajectory and money supply started to increase under his watch. Money supply was of course completely under the control of the CBN. As we remember from our crash course in monetary policy, more money supply in a similar-sized real economy, simply means higher inflation.

Fig 3: Inflation with trend in red. Source: National Bureau of Statistics.

Yes, there have been supply shocks revolving around foreign exchange, COVID, climate change, and other security complications and so on. What is however clear is that the underlying inflation trend has been increasing, in spite of these shocks. Even if you ignore food inflation, which is typically more volatile and in our case dependent to a large extent on the weather, and focus on core inflation, the story is the same. As discussed earlier, supply shocks can and do lead to inflation but the implication is that there was even less room for messing around with monetary policy.

Fig 4: Credit to the government and Money Supply (M2). Source: Central Bank of Nigeria

The first culprit is the expansion of lending to the Federal Government which resulted in a direct increase in money supply, all else being equal. As became clear during the final days of the President Muhammadu Buhari administration, this lending was significant with N22.7tn of this Federal Government outstanding debt securitized in May.

Fig 5: Outstanding Credit to the Government as a percent of total money supply (M2). Source: Central Bank of Nigeria.

For context, this was equivalent to over 40% of the total money supply3 as at April 2023. You can draw a straight line from the CBN’s financing of the Federal Government to the expansion in money supply and then to rising inflation. Previous CBN regimes had worked very hard to reduce the size of lending to the government with the resulting benefits of lower inflation for the economy as is clear in Figure 5. In fact, under the Lamido Sanusi regime the stock of Federal Government debt at the CBN was technically negative. However, that trend reversed with the outstanding debt becoming positive and growing astronomically under Emefiele.

The CBN’s special interventions also contributed their share. Figures are hard to come by on this, but there were reports of about N1.5tn to the anchor borrowers' programme, another N1.5tn on the power sector, N220bn to the textile sector, and so on. All these contributed directly to the growth of money supply and therefore rising inflation. You can argue about the impacts of these interventions but it is unlikely that whatever impacts they had or did not have were large enough to cover the negative impact of higher inflation.

The CBN tried to manage some of this by increasing the Credit Reserve Ratios (CRRs), the fraction of funds that banks have to hold in reserve, but in an arbitrary ad-hoc way with different CRRs for different banks. Although this might have slowed the growth of money supply, it was not enough given the scale of the expansion. There were also questions on the legality of implementing a CRR policy in such an ad-hoc way.

Fig 6: Interest rates. Source: Central Bank of Nigeria

The second culprit in the woe of unconventional policy was trying to force interest rates down even while inflation was going up. If you look at the monetary policy rate in Figure 6, which is supposed to be a signal for CBN’s interest rate policy, you would be forgiven for thinking that it did not change much. But in practice the CBN used administrative action to force rates down. If you look at the actual prime interest rate or the rates on government bonds and treasury bills then the direction of rates is clear. The action on rates started a long time before COVID so it cannot simply be blamed on the pandemic.

Fig 7: Real interest rates. Source: Central Bank of Nigeria and Author Calculations3.

The consequence of the action to reduce interest rates even during a period of higher than ideal inflation was that “real” interest rates became and are still negative. As we learned from our simple crash course in monetary policy, negative interest rates mean people should take their assets elsewhere. This puts even more upward pressure on inflation.

Fig 8: Inflation Perception and Expectations 4

A consequence of the CBN abandoning conventional for the unconventional was that people began to doubt the CBN’s ability to control inflation. As is clear from Figure 8, the public’s expectation of future inflation began to rise. If you recall, even if nothing else happened, once people start to believe that inflation will be higher in the future, then that makes the work to keep inflation in check even harder.

So, what’s the way forward?

The starting point is for the CBN (and given the current circumstances the executive also) to recognise the scale of the inflation challenge and the importance of getting inflation under control. As long as inflation remains high, every other objective, be it the quest for exchange rate stability or the president's agenda for increased cheap lending to MSMEs, will be much more difficult to achieve. The CBN needs to remember that its primary monetary policy objective is to keep inflation in check.

Given that inflation is currently much higher than ideal, the direction of monetary policy has to be to tighten or reducethe growth of money supply. This also means that interest rates will likely have to go up. How far up? At least to the point where “real” interest rates are no longer negative, but maybe even higher.

These actions to reduce the growth of money supply and increase interest rates are likely to be complicated by all the underhand administrative measures which were put in place to force rates down or to limit money supply growth through the back door. For example, the many administrative measures have meant that the monetary policy rate has recently no longer influenced interest rates either for government securities or at the banks, making the monetary policy committee effectively meaningless. The unwinding of the ad-hoc CRR policy, which means money refunded to banks, will also have unintended effects if not managed. The CBN will need to unwind most of these ad-hoc measures.

Given the misdirection by the CBN over the last few years, there may a tendency for the government to want to take closer control of monetary policy. This will likely be counterproductive as it has been demonstrated here in Nigeria and in other countries where governments tend to want to use monetary policy for other non-inflation objectives. Which is the underlying problem that the CBN faces today.

A better way forward would be to strengthen the monetary policy committee and place limits on CBN’s actions that fall beyond the scope of its regular monetary policy actions. One option here would to increase the number of independent members of the committee (currently only four out of 12) and/or reduce the members from the CBN and other government agencies. For instance, there is no real reason why the deputy governor for corporate services, a largely administrative role, should be voting on monetary policy. Increased oversight, to ensure that the CBN actually implements the decisions of the monetary policy committee, would also help strengthen the credibility of the CBN.

Finally, the direct sources of expansion in money supply witnessed over the past decade, specifically the ways and means financing of the government and the myriad of intervention funds will have to stop. Else, it would be equivalent to removing the plug to drain liquidity from the bathtub while at the same time turning on the taps.

As demonstrated above, not everything is within the purview of central banks. For instance, supply shocks, which are beyond the remit of central banks, are also known to drive up inflation. This in essence means that other actors, such as the governments at both the federal and state levels, can take actions to influence supply positively, which should put downward pressure on prices and therefore reduce inflation.

Lessons can be learnt from efforts aimed at tackling rising inflation around the world. Yes, central banks took actions to tighten monetary policy as they were required to but other actors took a variety of actions to put downward pressure on prices as well. For instance, the US govt took measures to ease supply chain logistical challenges that were blamed for rising logistics costs. The UN facilitated the exports of wheat and fertilizer as part of the Black Sea grain initiative to put downward pressure on global food prices as a result of the conflict in Ukraine. In Germany, the government increased investment in public transportation to manage rising transport costs. And so on. The lesson for Nigeria is that even though the CBN has a key role to play in managing inflation, and needs to play its part, the government can also make a significant difference.

For instance, improving security on farms and tackling logistics bottlenecks around moving food across the country will put downward pressure on food prices and reduce food inflation. Promoting regional African food trade, by maybe re-opening the borders and cutting tariffs on imported food will reduce food prices and reduce inflation. From a government finance perspective, improving tax collections and reducing the need for large fiscal deficits which then need to be financed will reduce inflation. We can go on and think of a plethora of actions which governments at the federal, state, and local levels can take to improve the “real” supply-side and therefore reduce inflation. In economics, we call them “structural reforms” which boost supply.

The reality of the last few years is that there is no pain-free way out of Nigeria’s inflation quagmire. But, as with the case of the fuel subsidy and the foreign exchange restrictions, the rationale for early action is clear even if there will be costs to it. From a monetary policy perspective, one of the costs is the necessary higher interest rate environment. But it will be worth it if we get inflation back under control.

Photo Credit: premiumtimesng.com

Footnotes

[1] “My agenda as Nigeria’s Central Bank Governor, By Godwin Emefiele” - https://www.premiumtimesng.com/opinion/162063-my-agenda-as-nigerias-central-bank-governor-by-godwin-emefiele.html?tztc=1

[2] The red line is a standard Loess function to distinguish between the trend in money supply growth and the cyclical component.

[3] Defined as M2 Money Supply. Source: Central Bank of Nigeria

[4] Real interest rates calculated as the difference between the nominal rates and the year-on-year change in inflation.

By Odion Omonfoman | The centrality of adequate and reliable electricity supply to individual welfare, economic growth and overall national development cannot be over-emphasised. This message is not lost on Nigeria. However, various initiatives and reforms aimed at creating an optimal power sector for the country have fallen short. The reforms initiated by the President Olusegun Obasanjo administration, leading to the privatisation of the power sector in 2014, is yet to yield the desired results.

According to the World Bank¹, Nigeria has the largest energy access deficit in the world. 85 million Nigerians, representing 43% of the country’s population, don’t have access to grid electricity. In comparison, 85% of Ghana’s population have access to electricity, while 70% of Senegal’s population have electricity access². The World Bank estimates that the lack of reliable power costs the Nigerian economy over $26.2 billion (N10.1 trillion) which is equivalent to about 2% of Nigeria’s GDP.

This is not to say that Nigeria has not made some progress in the power sector since 1999. For instance, in 1999, Nigeria had nine power generating stations—three hydro and six thermal stations—with a total installed on-grid generation capacity of 5,906 MW, but with available generation below 1,500 MW³. Today, Nigeria has up to 26 on-grid generation stations with a total installed capacity above 13,000 MW. However, available generation capacity hovers around 4,000 MW, with average daily energy output of about 100,000 MWH. Sadly, the little progress that has been made in the power sector since 1999 is neither at par with our population growth nor adequate for the energy needs necessary to achieve our economic potential. For reference purposes, Nigeria’s energy consumption per capita at 140kWh is relatively low and is three times lower than the average for Sub-saharan Africa⁴.

The privatisation of the power sector in 2014 was intended to address Nigeria’s power sector infrastructure and operational challenges, by reducing the direct participation of government in electricity generation and distribution, creating an efficient, contract-driven electricity market, and putting the power sector in the hands of private investors, who would bring capital, operational capacity and efficiency into the sector. Unfortunately, privatisation of the power sector hasn’t really taken government out of direct participation in the sector, nor has it improved operational efficiency in the sector.

As a matter of fact, government’s role and direct participation in the sector has not only expanded, government is currently the largest provider of capital to the sector. Since 2015, government has provided over N4 trillion in capital to the power sector supposedly managed by the private sector. Even worse, the privatisation of the sector has created a huge debt burden for the government, arising from market obligations to private investors. The market obligations were created as liabilities under the balance sheet of the Nigeria Bulk Electricity Trading Plc (NBET), which is a government entity set up to buy wholesale power from electricity generation companies (GenCos) under Power Purchase Agreements (PPAs) and sell same to electricity distribution companies (“DisCos”) under vesting contracts with the DisCos.

The market obligations are mainly debts owed to gas suppliers, shortfall payments to GenCos under the PPAs, and market shortfalls arising from non-review of electricity tariffs by the Nigerian Electricity Regulatory Commission (NERC), the sector regulator. The Federal Government has also gone on a borrowing spree to fund the power sector, particularly the national transmission grid managed by the Transmission Company of Nigeria (TCN), which is still 100% controlled by the government. Some of the loans have been used to fund the improvement of electricity distribution infrastructure of DisCos and also to finance electricity prepayment meters for end-user customers under the National Mass Metering Programme (NMMP).

Policy Recommendations for the Next Administration

Adopt a Paradigm Shift from Installed Capacity to Electricity Consumed

Electricity, however it is generated, is a commodity and has to be consumed (or stored) for electrical energy to be useful. The most meaningful measure of electrical energy in any economy is how much consumption there is. Thus, there is a need for government to stop thinking about electricity in terms of megawatts (MW) that can be generated, and start thinking in in terms of incremental megawatt-hours (MWh) generated and consumed. In other words, government should stop thinking of installed generation capacity and start to think in terms of the amount of electricity delivered, or in layman’s terms, how much electricity is generated and consumed every hour by electricity consumers in Nigeria.

This is an important paradigm shift with positive impact for government, as having such policy mind-set changes the prioritisation and allocation of public and private resources to projects, interventions and initiatives across the electricity value chain that will increase the energy output, availability, reliability and quality of electricity delivered to end-users. By the way, electricity consumers are billed on a kilowatt-hour (kwh) basis (consumption), not on a kilo-watt(capacity) basis.

Under the new paradigm, we expect the incoming administration spokespersons to make statements such as “we will increase the total electricity delivered to Nigerian households and businesses from xyz megawatt-hours (MWh)by 100%within x months”, rather than the usual statement saying “we will increase generation capacity to 20,000 megawatts (MW)”.Increasing generation capacity to 20,000 MW without most of the 20,000 MW being consumed or a corresponding increase in electricity consumption is not only meaningless but also fiscally detrimental to the country.

Increase in megawatt-hours delivered to electricity customers can be achieved if there is a seamless conversion and flow of energy from the natural gas fields to the generation stations, and from the generation stations to the high-voltage lines that transmit the energy to the national grid, and ultimately to medium-voltage and low-voltage lines that distribute the energy to end users. In this regard, the incoming administration needs to prioritise solving the interface issues and challenges across the entire power sector value chain (from natural gas-to-electricity interface, generation-to-transmission interface to transmission-to-distribution interface), building on the current initiatives and projects of the President Muhammadu Buhari government, with a strategic objective to optimise the value-for-money outcomes of a number of these projects, initiatives and interventions.

Continue with Implementation of the Buhari Administration Power Sector Programmes

As stated above, the incoming administration needs to continue the implementation of the power sector programmes, initiatives and interventions carried out by the Buhari Administration. Often times, new administrations are under political pressure to either terminate, suspend, put on hold, or create parallel projects, policies and interventions in the power sector. As an example, the administration of late President Umaru Musa Yar’Adua government suspended indefinitely the implementation of the National Integrated Power Projects (NIPP) and other power sector reform initiatives by the administration of President Obasanjo, with great negative consequences that the power sector is yet to recover from.

The Buhari administration initiated a number of interventions to address the challenges of the power and improve the infrastructure across the sector. The most talked about is the Siemens power projects, being implemented under the Presidential Power Initiative (PPI). The Siemens project is a three-phase infrastructure initiative designed to rehabilitate, upgrade, modernise and expand power transmission and distribution infrastructure across Nigeria. Phase one of the PPI is estimated at 2.3billion euros. 85% of the funding will come from a consortium of German banks and in certain instances, Development Finance Institutions (DFI) at a concessionary rate, and guaranteed by the German Export Credit Agency and other export credit agencies. The Nigerian Government will provide a counterpart funding of 15%. The implementation of the phase has since commenced, with many of the long lead transmission equipment scheduled to arrive before the end of Q2, 2023. The successful implementation of Phase 1 of the PPI will add 2GW of stranded generation capacity to the national grid, and will certainly increase the daily electricity delivered to electricity customers from the present daily average of 100,000 MWH.

Aside from the Siemens projects, the TCN has also secured a number of offshore financing to improve transmission infrastructure across the country. The Central Bank of Nigeria has also been involved in providing long-term capital to the sector for transmission and distribution interface projects.  The World Bank funded DISREP is a $500 million programme to help improve service quality of DisCos in the areas of metering, loss reduction and distribution infrastructure network rehabilitation, improvement and expansion. The National Mass Metering Programme (NMMP) is an initiative aimed at closing the metering gap in the country.

The incoming administration should continue the implementation of these and perhaps other projects and initiatives of the Buhari administration in the electricity sector. While we advocate for the continuation of the Buhari administration interventions, the incoming administration should also review and optimise some of these programmes and initiatives to ensure value-for-money.

Develop a New National Electricity Policy Framework & Amend the EPSRA

Nigeria’s subsisting national electricity policy was developed in 2000. The policy has basically remained unchanged since it was developed under late Dr. Olusegun Agagu as the Minister of Power. The National Electric Power Policy was the policy document that guided the power sector reforms and gave birth to the Electric Power Sector Reform Act passed by the National Assembly in 2004 and signed into law by President Obasanjo in 2005. Since its passage, the EPSRA (2005) has also remained unchanged, despite the urgent need for more reforms in the power sector.

With the recent constitutional alteration of section 14(b) of the concurrent legislative schedule of the 1999 Constitution (as amended), it has become more imperative to develop a new national electricity policy. More so as decarbonisation and energy transition from fossil fuels to clean sources of energy are now very important aspects of any country’s national energy policy. Consequently, the incoming administration must develop a national electricity policy that reflects the electricity aspirations of both the Federal Government and the states in line with the new provisions of the Constitution.

In same vein, the EPSRA (2005) is no longer fit-for-purpose. The 9^th National Assembly had commenced the process of repealing or amending the EPSRA. While the Senate repealed the EPSRA (2005) and passed the Electricity Bill 2022, the House of Representatives just passed the EPSRA amendment bill in April. It is hoped that the 9^th National Assembly can conclude the legislative process of harmonising the two bills, and pass the harmonised bill for presidential assent before May 29^th, 2023. However, there is no certainty that this will happen or that President Buhari will sign the bill into law before leaving office.

In the event that the EPSRA repeal/amendment bill is either not passed by the 9^th National Assembly, or that President Buhari declines assent to the bill, the incoming administration should fast-track the passage of a new electricity act by the 10^th National Assembly to reflect the new electricity frame work as envisaged by the Constitution and give States the unfettered rights to develop the electricity sector, including creating electricity regulatory structures and state electricity markets within their territorial boundaries.

The new electricity law should strengthen the national regulatory framework and the powers of the NERC as the electricity regulator, improve and strengthen existing electricity market structures, incentivise the market to a more efficient, contract-based market, decentralise the operations of the TCN and in general, reduce government’s participation and allow more private investments in the power sector by opening up the sector to greater market competition.

Establish a Standing High-Level Inter-Ministerial Energy Committee

Lack of effective co-ordination of the various segments of the power sector value chain is one of the causes of the dysfunction in the sector. Thus, the incoming government should consider the establishment of a standing inter-ministerial energy committee to be chaired by the Vice President. The inter-ministerial committee members should include the Minister of Power, Minister of Petroleum Resources (or such designate), Minister of Finance, the Permanent Secretaries of the mentioned ministries, the chief executives of NERC, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Agency (NMDPRA), the Governor of the Central Bank of Nigeria and heads of other key agencies and departments in the oil and gas sectors and the power sector. The inter-ministerial committee’s role will be to ensure effective coordination of agencies and operators that are part of the gas-to-power value chain.

Empower States to Develop Sub-national Electricity Markets

With the constitutional amendments that grant states’ houses of assembly the power to make laws for electricity generation, transmission and distribution within areas covered by the national grid in their domains, states and other sub-national governments have finally become players in the electricity market. The incoming administration should work with the states to develop the electricity markets within their localities.

State governments should be encouraged to take steps to begin to develop the electricity resources within their areas in collaboration with the Federal Government and under the framework of the new national electricity policy and amended EPSRA. That means the incoming state governments will also need to develop the right electricity policy framework for their states, and develop the right legal and regulatory frameworks that would create efficient and competitive electricity market structures, which can help them to attract needed investments into the electricity market. Also, states should be encouraged to drive rural electrification.

Improve the Energy Mix &Address Energy Transition Issues

Nigeria’s energy mix consists of fossil fuel and renewable energy sources, mainly hydropower generation and increasingly generation from solar energy. However, our energy mix is still dominated by fossil fuel—natural gas and diesel/petrol (largely for self-generation). This is understandable as Nigeria has Africa’s largest crude oil and natural gas resources. However, this presents a problem for Nigeria as the world moves to cut fossil fuel consumption in order to achieve carbon neutrality (net zero CO₂ emission).

At the United Nations Climate Change Conference event in Glasgow (COP 26), Nigeria committed to carbon neutrality by 2060, and to this effect has unveiled its Energy Transition Plan (ETP). An Energy Transition Implementation Working Group (ETWG), situated in the Office of the Vice President, has been established to drive the implementation of the plan. In the ETP, Nigeria puts forward a robust argument for the utilisation of its vast natural gas resources as a transition fuel for its energy requirements. It is reassuring that the World Bank in a recent publication recognises that natural gas can be a transition clean fuel for developing countries like Nigeria with vast natural gas resources and existing natural gas generation plants.

Consequently, the in-coming administration must continue the implementation of the ETP to achieve a faster transition to carbon neutrality by 2060. There needs to be focused investments at targeting new investments in additional power generation into renewable energy power generation sources such as solar and hydropower energy sources. At the moment, there is no solar energy generation into the national grid – and for obvious reasons ranging from grid connection, grid instability, existing stranded generation and payment assurances for the power to be produced.

However, it is high time that a grid-based, solar energy generation plant is established to optimise our power generation resources and reduce the percentage of fossil fuel in our national energy mix. Beyond having an on-grid solar power plant, there needs to be continued and sustainable investments in off-grid renewable energy generation, such as mini-grids, to serve rural communities and underserved communities. However, this should be done with greater collaboration between the Federal Government agencies responsible for rural electrification and the state governments.

Resolve the Privatisation Puzzle

The privatisation of the power sector is one of the most controversial privatisation exercises so far in Nigeria. A lot has been written about the privatisation but suffice to say that the Eldorado promised with the privatisation of the sector has not yet materialised. Many would blame the Federal Government at the time for forcing through a privatisation of the power sector that clearly was not at the stage to be privatised. But this is neither here nor there. The task is to address whatever gap exists.

This is not to say there has not been any progress in the power sector since privatisation. As a matter of fact, the privatisation of the sector increased total available generation capacity since 2014, as core investors in the successor GenCos invested to rehabilitate and restore installed capacities in some GenCo plants. For instance, the core investors in Egbin, Kainji, Ughelli and Jebba power plants have restored the installed generation capacities for these plants.

At the heart of the seeming failure of the power sector privatisation exercise is the inability of the electricity industry to achieve a contract driven, regulated market as envisaged in the power sector reforms. Only recently, it was reported that the partial activation of contracts in the sector spearheaded by the NERC in June 2022 has collapsed. Without activated contracts (PPAs, Vesting Contracts, Gas Supply Agreements, etc) amongst market participants in the NESI value chain, the benefits of privatisation may never be realised.

Consequently, the incoming administration should prioritise the resolution of the privatisation conundrum, particularly with a view to ensuring a “sensible activation” of contracts in the industry. By “sensible activation” of contracts, we mean allowing more bilateral negotiations, rather than an imposition, of market contracts amongst parties in the industry, under the regulatory oversight of the NERC.

The in-coming administration also needs to look at re-privatising some of the DisCos that have been taken over by lenders due to default by core investors in meeting the acquisition loan repayment terms to the lenders, or under some form of administration by the NERC and the CBN. The failed DisCos in administration should be broken into smaller franchise areas preferably along state boundaries, and privatised as new entities. Lastly, there is the “unspoken” issue of the payment of the huge market debts in the sector. For instance, GenCos claim that they are owed over $1 billion by the NBET. It is unclear how the new government would address the payment of these debts.

Reversing the privatisation of the power sector should not be contemplated under any circumstance. The privatisation process has built-in contract provisions to address the failures of any core investor under their performance agreements. What is needed is for the government to activate these contract provisions, provided the government has also met its own obligations too to core investors.

Improve Gas Supply to the Power Sector

As earlier stated, Nigeria’s energy mix is largely driven by natural gas. Consequently, the unimpeded availability and supply of natural gas to thermal power stations is most critical in attaining incremental megawatt-hours of electricity consumption by end-users, transmission and distribution infrastructure permitting. While Nigeria has the largest natural gas reserves in Africa, our power generation plants engage in a daily struggle to get enough natural gas to run their gas turbines.

Thus, improving gas supply to the power sector will require addressing the bottlenecks in the gas–to-power value chain. These bottlenecks include insufficient investments in gas-to-power infrastructure, and gas-to-power pricing and timely payments to gas suppliers for contracted gas delivered to power plants. From its policy document, the incoming administration plans to introduce a “Nigeria First” policy to prioritise the utilisation of Nigeria’s natural gas resources to electricity generation before export. This will be a welcome policy, if developed and implemented.

However, the issues around gas supply to the power sector are also anchored around sustainable investments in natural gas exploration, development and production. Equally important is robust security and protection of oil and gas infrastructure across the country. Thus, any “Nigeria First” natural gas utilisation policy must seek to address these upstream and downstream issues in the oil and gas sector.

Conclusion

There is a temptation to delve into more tactical issues and challenges in the power sector such as resolving the metering gap, estimated billing, resolution of financial distress in the power sector and other operational issues affecting the electricity industry. Putting together the tactical plan to resolve the issues should be left with the power sector team to be assembled by the incoming administration. Some of the recommendations here can serve as guides to the incoming president in thinking about the critical issues in the sector and in setting the terms of reference for his power team.

[1]https://www.worldbank.org/en/news/press-release/2021/02/05/nigeria-to-improve-electricity-access-and-services-to-citizens

[2] https://ourworldindata.org/energy-access

[3] National Electric Power Policy Document, 2001

[4]Nigeria Energy Information | Enerdata

By Bolaji Abdullahi | Nigeria’s return to democratic rule in 1999 coincided with the end of the first decade of a global commitment to the goal of Education for All (EFA) and the adoption of the Millennium Development Goals (MDGs), focused on achieving universal basic education, especially in the developing countries, as one of its core objectives.

However, while many countries still struggle to achieve the goal of universal education, a strong consensus has emerged over the years that although basic education is important, no country has achieved growth on the back of mass literacy alone.

The compelling argument for greater investment in university education, relative to other levels of education, flows from the strong evidence that better graduates have greater positive impacts on economic growth as well as the realisation that the 21^st Century global knowledge economy requires more than literacy.¹ The transformation of our public university system, where 94% of the undergraduates within Nigeria are enrolled, should therefore be integral to our vision of economic growth and competitiveness.

The promise of national development must reflect in our commitment to transforming the public university system to make it more efficient and able to meet the skills, knowledge and research needs of our country now and in the future. In seeking to realign our public university system with our national development objectives, we must ask four critical questions:

• What are our development goals over the next 15 years?²
• What human resources would we need to achieve these goals?
• How many of our citizens of university-going age would we require to have degree-level qualifications in the identified areas of need within the same period?
• What research priorities do we need to pursue and promote in order to meet these goals?

Attempts to answer these questions will highlight major problems in our current attitude to public university education which in turn has conditioned how we structure, operate and fund the system. The endemic corruption, inefficiency, ineffectiveness, inequity and lack of accountability that characterise the system merely thrive on a fundamental failure that cannot be addressed by interventions that merely target any of the symptoms in isolation. What we require is a system-wide reform that addresses the three critical elements of governance, funding, and quality assurance based on a rethinking of the entire public university education itself as a driver of national development objectives.

1. Rethinking the Governance of Public Universities

The central issue in governance is that of efficiency and service delivery. What kind of governance regime is best suited for the kind of services that the public universities are expected to provide? At the heart of this question in Nigeria is the issue of autonomy: the degree to which each university has the freedom to operate independent of the government authorities that set them up and fund them.

In Nigeria, universities are governed by the National Universities Commission (NUC), whose establishment Act of 1974 gives it controlling power over the university education system, including what departments or academic units they run and what they teach; what funding they receive and how; what personnel they hire and the conditions of service attached to such personnel; what their research needs are; and “carry[ing] out such other activities as are conducive to the discharge of its functions under this Act³.” Many university administrators and lecturers regard the NUC as a major impediment to innovation and creativity in the universities.

Global trends also suggest that less government is better for universities and that universities function best when they are self-governing. Lant Pritchett, a professor at Harvard University, used the spider and the starfish to illustrate two kinds of systems. The spider system is that in which all organs and parts of the body are centrally controlled, while the starfish allows for a level of control but grants freedom to each of the limbs to operate with significant autonomy. A pure spider system, Pritchett says, pulls responsibility for all functions to itself, especially through financing; whereas a starfish system creates local operation which,

“Pulls apart all of the many functions and activities and allocate those across the system such that the local component of the system provides a constant stream of innovation and new ideas and can use the local nature of the operation of the system for thick accountability…while the national level provides a framework for standards and monitoring and evaluation performance⁴”.

The starfish approach will fit squarely within a system of embedded autonomy which allows the university the flexibility to explore and establish local and international relationships and partnerships while government involvement is scaled back to quality assurance and monitoring compliance with national regulations. Another major advantage of the starfish system is that by granting autonomy to the local components, it also ensures that a problem with one of the components does not cripple the entire system.

By granting autonomy to each of the universities to negotiate contract terms with its staff based on its unique capabilities and local conditions, the government would have addressed the problem posed by the principle of collective bargaining which has turned the Academic Staff Union of Universities (ASUU) into a disruptive force over the years. Of the eight identified issues that have formed the basis for ASUU’s perennial strikes, five are directly related to issues of conditions of service and remunerations⁵.

Granting autonomy to the universities along this line will not necessarily save the government money, but it will achieve three things. One, it will bring stability to the university system; two, it will ensure that the lecturers are competitively and equitably remunerated; and three, it will enable the government to focus on her quality assurance functions as an objective arbiter.

The argument for more equitable remuneration of lecturers is central to attracting and retaining the right calibre of lecturers and professors. The current system that pays lecturers in different contexts and with different quality of outputs the same salary just because they are on the same “salary scale” is wrongheaded and suboptimal. However, this can only be corrected if each university is at liberty to negotiate salaries and other benefits with its lecturers.

University lecturers should be employees of their universities not those of the Federal Government or the state go vernments. Essentially, what we require is a system that fosters high-level competition for resources and even for students. Under the current governance system, the universities lack the incentive to do anything differently. Neither the funding they get nor the students that come to them depends on the quality of what they offer to students either in terms of learning or living experience or the quality of their research outputs.

Autonomy will create the condition for each university to develop at its own pace, based on real accomplishments in research, in teaching and in their contributions to national development goals. It is interesting to note that “university autonomy and academic freedom” has been one of ASUU’s key demands. Their desire is to free the universities from what they consider as the stranglehold of the NUC. The obvious implication of this, however, is that the NUC must undergo its own reform to enable it repurpose itself for its coordinating and monitoring role in a new governance system.

      2.   Changing How Public Universities are Funded

In respect of funding, two factors need to be considered. Effectiveness: are they being adequately funded? Efficiency: are the funds being spent on factors that are directly relevant to delivering the best results, especially in the core task of teaching, learning and research? The current funding system does not meet either of the criteria. The chief source of funding for public universities in Nigeria is the government, whose intervention however accounts for only about 44% to 60%  of what is required to run a university effectively⁶. This means that at any given time, the funding deficit is between 40% to 56%.

Table 1: Allocations to Federal Universities in the 2023 Budget

Source: Budget Office of the Federation

Table 2: 2023 Allocations to Federal Universities: Percentage of allocation to personnel and overheads

Source: Budget Office of the Federation

Table 2 indicates that between 86% and 96% of the federal allocations of these four universities goes to personnel cost alone. This leaves a range of 0.7% to 1.4% and 2.2% to 7.2% for overhead and capital respectively. What this means in essence is that our federal universities are existing mainly to pay salaries, with hardly much left for the other operational costs and for provision and maintenance of infrastructure for teaching, learning and research. Funding effectively and efficiently would require a major paradigm shift in how we view public university education generally and how we fund it.

If we take the budgetary allocations to the universities as standing in lieu of tuition, this should be regarded as subsidy. However, as Table 2 has shown, what the government has done over the years is to subsidise personnel cost of the universities, rather than the students who should enjoy the subsidy.

A major step-change that is required here is to target the subsidy payments around students’ enrolments rather than the administration of the university. What this does is to place the students at the center of the university planning, with all other expenditures, including personnel, overheads and physical development, now revolving around the students and their needs. This also ensures an objective parameter for allocation of funding, one that is focused on output rather than the current input-based approach. Running a university costs a lot of money.

Costs are incurred almost on a daily basis. One Vice Chancellor reported spending about N40million monthly on diesel alone to keep the generators running, this is in addition to the cost of the main electricity supply. The university therefore spend up to N100million on power supply alone in a given month. Infrastructure and vehicles maintenance, fueling of vehicles, re-agents and other consumables for the laboratories, sporting activities, all these are covered under the overhead costs, which are released to the universities on a month-by-month basis.

However, interaction with several university heads reveals that while the budget for personnel is released 100%, they hardly get more than 50%of overheads allocation in a given year⁷. However, even if all the overhead allocation is released, it is hard to imagine how it could meet the monthly cost of running the university. For example, the University of Nigeria Nsukka (UNN) with an overhead allocation of about N203 million in its 2023 budget has a population of 36,000 students. To start with, it means that UNN has an allocation of N16.9 million per month for overhead. But more interestingly, it means that, minus personnel cost, the university has only N5,638available in a year as running cost for per student.

Even if this amount is added to the fees charged by the university in a year, the total available per students will be about N67,000 or $145. This applies to all federal universities in Nigeria. The Fallacy of Tuition-Free Education The two organised ‘vital constituencies’ for government in producing education are the students and the lecturers. The two constituencies appear to want the same thing: university education that is accessible to all who can meet the entry requirement, that is of high quality and that is free of charge.

Although this is more like a pie in the sky, government has continued to give the impression that it is possible to achieve. This has resulted in a lose-lose situation for everyone involved. Government’s best funding efforts continue to run short, the vital constituencies are permanently disgruntled, and the system continues its steady decline because government has been funding the administration of the institutions rather than education itself.

Table 3: Fees charged by some public universities in Nigeria⁸

In contrast, Table 4 shows the fees charged by some private universities in the current year.

Table 4: 2023 First Year fees for some private universities in Nigeria⁹

It is possible to argue that private universities run on a business model and will not operate at a loss. Nevertheless, the fees they charge may provide useful insights for determining what might be a realistic cost of providing university education in Nigeria. It is interesting to note that American University of Nigeria in Yola actually calculates its fees per credit units offered by the student¹⁰.

Even if we account for profitability, it is difficult to understand how University of Ibadan can reasonably charge a maximum fee of N36,800 in a session for a course that AUN, Yola charges more than twice the same amount to teach a single credit. Best practice is to fund university based on the needs of students. Money must be made to follow the students.

We need to determine what is required to deliver university education to each student, do a realistic costing and pay the universities accordingly or arrive at a cost-sharing arrangement, with government bearing most of the costs. It is understandable why government may want to persist on the outmoded policy of zero tuition, but no one is helped by it, not least the students who are mostly being rolled through the university with no prospect of real employment because they have not had the opportunity to acquire real skills.

Government needs to allow introduction of cost-reflective tuition or should pay the university full equivalent of what they would ordinarily charge as tuition or provide alternatives that guarantee realistic funding for the universities. Like Kosack argued “in the absence of a well-functioning private education market, where most consumers are unable to afford education without subsidy, there are only two options: government continues to pay subsidy or lower the fee to make it available to everyone¹¹.”Kosack’s assumption is that there are fees to lower.

But what happens where there are no fees at all, and government cannot pay enough? In the current fiscal climate, it is unlikely that government can afford to give the universities all the money they need to function effectively. Government therefore needs to invite parents to shoulder more of the financial responsibility. If it is clearly defined as a means of improving quality, which will enhance the employability of the students upon graduation, it would not be a totally strange proposition.

Afterall, as parents lose confidence in the public primary and secondary schools, they voted for fee-paying private schools. It is indeed curious that parents who were able to pay fees running into hundreds of thousands for private basic education would expect to pay next to nothing for university education. Below are some options that can be explored to improve the pool of funding for our public universities and ensure that students from poor homes are not denied access to university education.

• Guaranteed Loan through the Education Bank

The issue of a federally-backed Education Bank has been in the works for about three decades. Now is the time to give it real traction in the context of the funding reform. It is a great opportunity that the National Assembly as well as some civil society actors have backed the idea over the years¹². Once again, the only voice of dissent is ASUU, whose president declared in 2022 that “ASUU will never support the issue of Education Bank because the poor will not benefit from it.”¹³

It is not clear from this statement whether ASUU is opposed to the idea of students’ loan because it thinks the scheme would constitute a debt burden to the students or because the union fears that the loans might not be awarded to intended beneficiaries. Whatever the case, concerns should be addressed and the idea of an Education Bank must be framed as part of the efforts to improve quality of education generally (including to ensure that the public universities are well funded and the lecturers can be well paid) and as a means to support indigent but talented students who need university education for career progression.

Affordable loans, with repayment tied to salaries earned upon graduation will ensure that children from poor homes are not excluded from university education because their parents are too poor to pay. One major reason the idea of a students’ loan scheme may not be attractive, especially to a government seeking to shift costs, is that the risk of people defaulting is high. Education is a bad collateral.

A bank can recover a house from a defaulting customer, but education cannot be recovered from a customer who fails to pay for the obvious reason that she is not able to get a job after graduation or because she has simply relocated to another country, leaving no contact address. There is thus the risk that government might still end up paying for defaulters, except adequate risk-mitigating strategies are put in place. In the context of a full subsidy, the alternative is for the government to give out scholarship vouchers to students which would stand as guaranteed promissory notes that the universities could redeem with the government.

If the government is able to redeem the vouchers in full and on time, it would have ensured that the universities get paid the agreed amount for each student. But this is unlikely to happen. It is important to emphasise that the conversation around an Education Bank is in the context of the need to introduce tuition payment in the university, which has become inevitable as the only realistic and sustainable pathway to effective funding of the universities.

Even in the face of high risk of default, there are other benefits to the system in the idea of a student incurring a debt to fund her education. It turns the parents and the students into active financial stakeholders and gives them a skin in the game. Perhaps, the most important effect is that it is likely to engender a new attitude towards learning and even teaching.

As the indebted students begin to demand value for money, horizontal accountability will be strengthened and quality is likely to improve generally. As quality of graduates improve, employability is likely to improve and same with earning capacity. In addition to all these, government may also use the instrumentality of the loan to push students towards some courses that are relevant to the nation’s manpower requirement by giving priority to students who go in for those courses. 

• Strengthening Scholarship Schemes

Scholarship awards, whether need-based or merit-based, represent another opportunity for talented students to pay for university education. It is interesting to note that while the Federal Government and some state governments award scholarships every year, they are mostly for candidates to study abroad. Under the Bilateral Education Agreement, the Federal Ministry of Education awards scholarships to Nigerian students to study in countries such as Russia, Morocco, Hungary, Egypt, Cuba, Macedonia and Japan. Sending students to study abroad has also become a pet policy of some state governments in recent years. Government agencies like the Petroleum Trust Development Fund (PTDF) also award annual study-abroad scholarships, up to $30,000 for a student. A 2022 report says PTDF has awarded 9,659 such scholarships since 2002¹⁴.

It is possible to argue that governments and government agencies prefer to award foreign scholarships because Nigerian universities do not charge fees. The rise in the number of fee-paying private universities in recent years would however put a question mark on that argument. Most scholarships available to study in public universities in Nigeria are awarded by private companies in the country. These limited scholarships are mostly for the upkeep of the students. Introducing tuition payment is likely to direct some of these scholarships into Nigerian universities and help students to pay.

• Expanding Funding through Endowments & Alumni Donations

Endowment is another great opportunity for universities to expand their pool of funds. Just as government alone cannot provide all the money that universities need to be truly competitive in a global sense, tuition payment would also not be the silver bullet. The universities must constantly seek means to expand their funding based. This is why the modern university administrator is more of a fund raiser than anything else. But the current system does not encourage the goal-getting attitude that is required to attract the right support outside government.

Some of our public universities have endowments already, but they are too paltry for the scale of the challenge. Alumni represent a great source of endowments to universities. Each university needs to bring their alumni closer and give them real incentives to contribute to the funding of their alma maters.

Many universities have alumni who have gone on to become successful businessmen and women, and even state governors and ministers. Many are even setting up their own universities. The universities need to be more deliberate in tapping into this opportunity.

• Instituting Work-Study Programmes

Looking at the unemployment statistics, it would be tempting to dismiss this as an option. But work-study provides additional option for indigent students. And they don’t have to seek employment outside the universities. Some reports indicate that many of the universities have up to four times the number of their academic staff as non-academic staff, mostly doing the work that students can do and get paid for.

The employment office can keep a register of students who need such jobs and give them priority as vacancies are available. Also, some of the students can serve as research and teaching assistants to lecturers or serve as library assistants. As done in many countries abroad, the number of hours that students can work per week should be limited so that work will not interfere with their study.

• Develop a New Framework for TETFUND’s Allocations

The Tertiary Education Trust Fund was established in 1993 to manage the 2% education tax payable by companies registered in Nigeria and to disburse same to tertiary institutions in the country for the purpose of providing or maintaining physical infrastructure for teaching and learning, for instructional material and equipment, research and publications as well as academic staff training and development¹⁵.

Although the TETFUND was intended to provide intervention funds to support the universities in the areas listed above, it has more or less become the only source of funding available to the universities to carry out those activities. Apart from the grants uniformly awarded to universities annually, some universities may still get additional grants depending on the vice-chancellor’s political connections or capacity to lobby.

There is no evidence that allocations from TETFUND follow any objective parameters other than the Fund’s own discretion or proposals submitted by the universities themselves based on their respective needs. Moreover, giving the same amount to all universities regardless of their performance in the core business of teaching and research does not encourage productivity or accountability. Therefore, a new National Framework for Tertiary Education Funding needs to be developed that will set objective parameters for allocation of funds.

This new framework should ensure that institutions are funded based on verified outputs in teaching, research and community service. While the details of this funding framework will still need to be worked out, the main objective is to ensure that funding is made based on output, rather than input requirements. Because the parameters for allocation of funds under the new framework will also be objective and pre-defined, it would bring about greater equity and transparency, while providing real incentives for each institution to respond to the national development needs in manpower development, research, and community service.

A framework that funds the entire higher education system as a single system will also improve accountability and limit the chance for duplication.  Perhaps more importantly, because institutions would be required under the new framework to show evidence of change in governance, operations and productivity, funding will then serve as an important lever in driving the desired reform. The idea of financial autonomy to the universities would also be better served because once a university is able to win the grant under the new framework, it would also be at liberty to decide how to spend it to better position itself for even more grants in the future. 

1. Re-prioritising Quality Assurance

Conversations about improving the quality of university education or education generally usually focus strongly on the issue of funding. As has been noted however, a university is like a factory. If the factory is not producing the goods, simply throwing in more money or recruiting more staff will not change its fortune. To proceed with the same analogy, a factory that is designed to produce sheets of paper cannot be used to produce roofing sheets without undergoing a major redesign.

Generally, people go to university to increase their earning power and for social mobility. But like Kosack noted, the investment value of education is a function of three conditions: the education’s quality; scarcity; and the level of the country’s economic development.”¹⁶. Nigeria has doubled admission spaces in the last two decades or so, yet a significant majority of those who apply for university admission each year are unable to get in. Rapid expansion of private universities in recent years has not helped much, as most students are unable afford the fees they charge. While there are 79 private universities in the country, they account for only 6% of the undergraduate students enrolled in Nigerian universities.

Of the remaining undergraduates, 29%are in the 48 state universities while the remaining 65% percent are in 43 federal universities. Available reports indicate that only one in four applicants (or 25% of applicants)is able to secure admission. This has pressured the government to continue to expand access by granting licenses to private universities and setting up new ones of her own.

In 2011 alone, the government set up nine new federal universities. It is axiomatic that wherever enrolment expands too quickly, the first casualty is quality. Expanding access without paying corresponding attention to factors that actually determine quality of teaching and learning will ultimately devalue education. It is no surprise therefore that one of ASUU’s demands is that government should stop the proliferation of universities. Related to the issue of quality is also the issue of relevance both in terms of curriculum content and in terms of course preferred by students relative to the needs of the employment market and the nation’s manpower needs.

The Association of African Universities has identified weakness in curricula and how they are delivered as major factors in explaining the declining quality of graduates in Africa: “The orientation of curricula needs to shift away from producing theoretical elites and administrators to produce doers and entrepreneurs who are transformational wherever they find themselves.

Due to poor remuneration and poor facilities, African HEIs are not competitive in attracting and retaining top instructors.”¹⁷ In addition to this is the question of what the students are applying to study and how these courses will help their prospect of getting a job or contributing in areas that the country needs their expertise. In 2019, while 1,874 graduated in Medicine and 923 in Computer Engineering, 10,261 graduated in Accounting, and 6,239 in Political Science in the same year.

Other reports also show that Education and Agriculture are the only two courses for which universities are not receiving enough applications, yet these are areas of critical manpower needs for the country.¹⁸ The issue of curriculum is also related to that of governance. Over-centralisation of the university system has created a sense of uniformity that has robbed every university the chance to develop a unique character of its own. Almost every university offers the same menu of courses without regards to the needs of its local environment or its own capabilities.

As stated earlier, higher education system in Nigeria must be situated within a national human resource development strategy, which in turn must derive from a broader national development plan. Therefore, transforming the public universities in Nigeria will not be a job for the minister or the Ministry of Education alone. The Ministry of National Planning, the Ministry of Labour and Productivity and the Organised Private Sector (OPS) must work closely together. But the process has to be led by the President of the country or someone who has his convening authority to drive the process.

The 2023 webometrics ranking of African universities includes less than 10 Nigerian universities in the top 100. While these rankings may be taken as fair indicators of our universities’ standing within the parameters being measured either in a global or regional context, they are not sufficient in measuring our higher education institutions’ responsiveness to the national development needs. We need a new system of evaluation and quality assurance that is semi-autonomous and has a strong private sector orientation.

It is important for the private sector to play a leading role in quality assurance because they are the major off takers of what the universities produce as students or as research. Acting Director of the Innovation and Technology Management Office of the University of Lagos, Abiodun Gbenga-Ilorin, recently stated that 13,282 research papers were published in Nigeria in 2020, which ranks the country 50^th in the world in the number of research papers published that year. However, of all these, only 300, about 2.2 percent has led to successful innovations. Working closely with the industries will ensure that research focus becomes more demand- and solution-driven, plus the added benefit of attracting good funding¹⁹.

Summary of Recommendations

1. Federal Government needs to step back. Less government is best for universities. Government should grant full autonomy to its public universities, and allow each university to develop its own identity and grow at its own pace.
2. National Universities Commission Act (1974) should be amended to release its stranglehold of NUC on the universities and assign it a coordinating and monitoring role rather than a directive or prescriptive role.

• In keeping with the principle of autonomy, government should cede its role as employers of university lecturers to each university. This will empower the universities to negotiate terms and conditions of service with their respective employees in line with their local reality and the value expected of each lecturer.

1. A realistic annual cost for each student should be determined and the universities should be funded by government based on the number of students rather than personnel or administrative needs of the university.
2. Universities should be allowed to charge tuition fees within the parameters set by government, but the Education Bank needs to be established to offer federal government-backed loans to students who may require them.
3. Government and institutional scholarship awards are another opportunity for talented but indigent students to pay tuition. Most government scholarships now are targeted at students studying abroad. This should be reversed.

• Work-study also presents another option for indigent students. Most of the work currently being done by non-academic staff and even contract staff in the universities can be done by students.
• Endowment funds are a major way for universities to expand their pool of funds. Currently, the universities are not tapping into it as much as they should do. They need to bring their alumni closer and give them incentives to contribute to their university endowment programmes and to establish scholarship schemes and give back in other ways.

1. A new framework for tertiary education funding needs to be developed that will set objective parameters for allocation of funds from the TETFUND based on verified outputs in teaching, research and community service.
2. A semi-autonomous National Higher Education Quality Assurance Agency (NHEQAA) needs to be established to monitor the quality of teaching and research in the universities, and evaluate them in terms of their responsiveness to the nation’s manpower requirement and economic development plan.

*Abudullahi, an education enthusiast, was Commissioner for Education in Kwara State and Minister for Youth Development and Sports.

Footnotes

[1]IBRD/WB. (2003), Directions in Development - Lifelong Learning in the Global Knowledge Economy: Challenges for Developing Countries, World Bank, Washington DC; and Kosack S. (2020). The Education of Nations: How Political Organisation of the Poor, Not Democracy, Led Governments to Invest in Mass Education; Oxford University Press, New York.

[2] In projecting for 15 years, I adopt the cycle for the United Nations Millenium/Sustainable Development Goals.

[3] National Universities Commission Act, 1974.

[4] Pritchett L., (2013). The Rebirth of Education; Centre for Global Development, Washington DC.

[5]https://businessday.ng/news/article/explainer-asuus-demands-and-what-government-has-met/

[6]This is according to a 2013 paper delivered by Prof. Rahmon Bello, former Vice-Chancellor, University of Lagos.

[7] Some reported going months without receiving any overhead allocation.

[8] These are sundry fees charged at the discretion of each university. Tuition remains free of charge.

[9]The table captures the minimum payable. Fees normally varies, with significant upper bound in the same university, depending on the courses.

[10]The N2,220,000 is arrived at by charging N74,000 per credit for a 30-credit academic session.

[11] Kosack S.(2012), Ibid.

[12] https://guardian.ng/features/stakeholders-canvass-implementation-of-education-bank-act/

[13] https://dailytrust.com/asuu-opposes-students-loan-bill/

[14] See Punch Newspaper, April 18,2022. [15]https://tetfund.gov.ng/index.php/mandate-objectives/

[16] Kosack S. (2012). Ibid. Pg 25.

[17] Strategic Plan 2020-2025 (Accra, 2020). Pg. 18.

[18]https://punchng.com/367499-applied-for-43717-medicine-slots-jamb-report/

[19] TETFUND allocation to each university for research in 2023 is only N40 million or $86,000.

By Fola Aina | The Nigerian state is currently confronted with multiple security threats, most of which emanate from, and are perpetuated by violent non-state actors (VNSAs). In the troubled Northeast region, the predominant threats include the activities of violent extremist organisations such as the Boko Haram driven by a political ideology of establishing an Islamic Caliphate, and its first breakaway faction Ansaru, as well as its second breakaway faction, the Islamic State in West Africa Province (ISWAP). The most affected states include Adamawa, Borno, and Yobe states, popularly referred to as ‘BAY’ states. As of 2021, Boko Haram has been responsible for the deaths of 350,000 people,¹ and the internal displacement of 2.5million people as of January 2023.²

In the country’s Northwest and Northcentral regions, the activities of armed bandits have devasted local communities. Armed bandits numbering over 30,000 were responsible for the deaths of over 2,600 people³, and the displacement of about 1million others.⁴ Driven by economic opportunism rather than political ideology, the activities of armed bandits have been mostly manifested through brigandage, theft, kidnappings for ransom, cattle rustling, and sexual violence mostly perpetuated against women and girls. Armed banditry which remains a very significant threat to Nigeria’s national security has its roots in the country’s persistent farmer-herder crisis.

In the Southeast region, secessionist agitations by the Independent People of Biafra (IPOB) and its paramilitary wing, the Eastern Security Network (ESN), have disrupted peace and continues to threaten the freedoms of citizens through the imposition of sit-at-home orders. Added to these are also issues of piracy and terrorism that have plagued the Niger Delta, thereby resulting in the region’s insecurity. In the Southwest region, the activities of cultists, kidnappers and other organised criminal gangs continue to threaten the peace and security of the region as well. These threats have since evolved overtime and adapted making the quest to addressing them even more challenging. This is particularly pertinent as their existence reflects an afront on the state’s monopoly of the use of force.

The degree of severity across these multiple threats varies, given that they have the potential to continually derail social, political, and economic development across the Nigerian state. Collectively, these threats pose significant challenges to human security in Nigeria. These

challenges are mostly manifested in the effects of these threats to human lives and livelihoods. Furthermore, they constitute a grave threat not only to Nigeria’s national security, but also to those of its immediate neighbours such as Cameroun, Chad, and Niger in the Lake Chad Basin region as well as the Sahel region.

Nigeria’s current security architecture is ill-positioned to address these threats. From issues associated with the lack of adequate equipment to those of manpower shortages and non-professionalism, the challenges confronting the security sector abound. This has also contributed towards the proliferation of private security companies (PSCs) in complementing the security provisioning across the country.

Tackling growing insecurity efficiently and effectively will demand reviewing and changing how the security sector is governed in Nigeria. This is in addition to recalibrating the state’s coercive apparatus and repurposing its preparedness and responsiveness to these threats. The Nigerian state has mostly responded to threats to its national security in a reactionary way, rather than proactively.

Repositioning National Security Through Improved Governance

Currently, Nigeria’s national security architecture can be broadly categorised under two sub-headings. These include internal security and external security. Under internal security the state’s institutions mostly saddled with the responsibility of protecting the state from internal threats include the Office of the National Security Adviser (ONSA), the Nigerian Police Force (NPF), the Nigerian Police Intelligence Response Team (IRT), the Department of State Security (DSS), the Federal Ministry of Interior, the Nigerian Customs Service, the Nigerian Immigration Service, the Nigerian Correctional Services, the Nigerian Drug and Law Enforcement Agency (NDLEA), the Defence Intelligence Agency (DIA), the Economic and Financial Crimes Commission (EFCC), and the Independent Corrupt Practices and Other Related Offences Commission (ICPC), and the Nigerian Counter-Terrorism Centre (NCTC), and the Nigerian Financial Intelligence Unit (NFIU), to mention a few. Others at regional levels include Amotekun in the Southwest region, and Ebube Agu in the Southeast region, in addition to local vigilante groups.

With respect to external security, it is pertinent to note that the Office of the National Security Advisor (ONSA) also plays a fundamental role in this regard. Others also include the Nigerian Customs Service and the Nigerian Immigration Service, the Nigerian Intelligence Agency (NIA), the Nigerian Counter-Terrorism Centre (NCTC), the Nigerian Armed Forces (The Nigerian Army, the Nigerian Navy, and the Nigerian Air Force), the Directorate of Military Intelligence, Army Intelligence, Naval Intelligence, Air Force Intelligence, the Defence Intelligence Agency (DIA), and the Regional Intelligence Fusion Unit (RIFU) amongst others. It is equally significant to note that the military is fundamentally the state’s coercive apparatus deployed with the goal of averting external aggression against the Nigerian state, given the NPF’s incapacity to address the country’s multiple threats, the military has since assumed an active role in internal security management as well. As of November 2018, Nigeria has had only 334,000 police officers.⁵ In addition to being overstretched, as of 2019, Nigeria’s total military forces stood at 223,000 personnel.⁶

The threats to Nigeria’s national security can be broadly categorised into five dimensions. These include the political dimensions, given that some of these threats are triggered by political issues such as actual or perceived political marginalisation.  There is also the socio-economic dimension, which stems from issues such as poverty, inequality, unemployment, and illiteracy amongst others. There is also the environmental dimension which bothers on issues such as climate change resulting in desertification and deforestation, water supply shortages, resulting in conflicts over increasingly scarce natural resources. The fourth dimension is the ethno-religious dimension which reflects tensions resulting in communal clashes. Another very significant dimension is the cyber security related dimension. This dimension is mostly manifested through propaganda, the spread of misinformation, and hacking through malware.

Nigeria’s response to national security threats appears to be overly militaristic. The issue with this is that it has the unintended effect of neglecting “human security” which is required in gaining the support of those affected. This is critical to the exchange of influence between the state and society in the pursuit of mutually-linked security goals and objectives. A viable option towards repositioning Nigeria’s national security architecture would be the adoption of an integrated approach towards national security, one which has “human security” at the centre of it all. This implies a prioritisation of the wellbeing of humans, as members of society, to whom the state is obligated to protect by provisions of the constitution and in accordance with the social contract. The components of this integrated approach to national security entails economic security, social security, food security, housing security, health security, and cultural security. To effectively address national security threats, these components are expected to considered not in isolation, but collectively as a whole.

Recommendations:

To better position Nigeria’s national security architecture to respond more efficiently and effectively to the multiple threats confronting the country, the following are some recommendations:

1. The need for a review of the National Security Strategy (NSS) every five years. Nigeria’s approach to national security is essentially derived from the NSS. Given the nature of the new and emerging threats to the country’s territorial integrity, which has resulted in irregular warfare within its shores, the NSS should reviewed every five years to ascertain what works and what does not.
2. Establishment of the Office of the Director of National Intelligence (ODNI), not as a separate government agency, but under the Presidency. This is to be patterned after a similar institution in the U.S., which was created in 2005 as part of the responses to the 9/11 terrorist attacks, and designed to ensure integration of national intelligence. In the U.S., both the Director of National Intelligence and the National Security Adviser (NSA) report to the president. As it currently stands in Nigeria, the Office of the National Security Adviser (ONSA) plays the role of a coordinating agency on all matters related to national intelligence. This creates room for underperformance on its fundamental role, which is to advise the President on national security matters. The creation of an ODNI would therefore go a long way in ensuring the harmonisation and coordination of all national intelligence thereby fostering the availability of actionable intelligence in a timely manner. This is in line with what exists in the United States of America (USA), which has both the NSA and the ODNI
3. Establishment of two designated portfolios, not as separate agencies, but under the Office of the National Security Adviser (ONSA). The recommended portfolios are: the Deputy National Security Advisor (DNSA) on Africa and Economic Affairs and a Deputy National Security Advisor (DNSA) on Grand Strategy, Counterterrorism, and Intelligence. Both portfolios are needed to deepen and broaden the operations of ONSA.
4. There is a need for manpower increase across the Nigerian Police Force and the Nigerian Military to provide much needed surge against criminal activities across the country. The current deficiencies that exist with manpower, amongst Nigeria’s security forces leaves them mostly stretched to the limit thereby impeding their abilities to effectively tackle insecurity.
5. There is an urgent need to provide state of the art equipment, advanced weaponry, and technology including combat gears, night vision googles, armed drones, surveillance drones and advanced weapon systems across the security forces. The use of state-of-the-art equipment, advanced weaponry and technology offers an edge to Nigeria’s security forces in the increasingly complex and dynamic sphere of asymmetric warfare.
6. Regular trainings for members of the security forces are required to sustain their professionalism, and preparedness to address the issues of insecurity currently confronting the country. This should also be strengthened through foreign security forces assistance with partner countries. Doing so regularly would also help to ensure that Nigeria’s security forces are attuned with the latest doctrines, tactics and operational strategies required to persecute the ongoing multiple internal security operations.
7. Nigeria’s structure of intelligence should be repositioned to provide actionable intelligence that informs counterterrorism (CT) and counterinsurgency (COIN) operations across the country. This can be better optimised by prioritising a locally driven strategy towards winning the hearts and minds of local communities.
8. There is need to prioritise a human security and people-centred approach over the current militarised approach. This should focus on addressing the underlying root causes and triggers of insecurity such as socio-economic grievances, political marginalisation, ethno-religious tensions and environmental degradation.

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*Dr. Aina is an international security expert and an associate fellow of the Royal United Services Institute for Defence and Security Studies (RUSI), London, United Kingdom.  

Footnotes

[1] United Nations Development Programme, “Assessing the Impact of the Conflict on Development in North East Nigeria”. Available at https://www.ng.undp.org/content/nigeria/en/home/library/human_development/assessing-the-impact-of-conflict-on-development-in-north-east-ni.html  (Accessed June 25, 2021).

[2] International Crisis Group, “Rethinking Resettlement and Return in Nigeria’s North East”, Available at https://www.crisisgroup.org/africa/west-africa/nigeria/b184-rethinking-resettlement-and-return-nigerias-north-east, (January 25, 2023)

[3] Ayandele. Olajumoke., and Goos, Curtis., 2021. Mapping Nigeria’s Security Crisis: Players, Targets and Trends”, Available at: https://acleddata.com/2021/05/20/mapping-nigerias-kidnapping-crisis-players-targets-and-trends/ (Accessed 2nd October 2022)

[4] Hassan, Idayat. and Barnett, James, 2022. ‘Northwest Nigeria’s Bandit Problem: Explaining the Conflict Drivers’. In Centre for Democracy and Development. Available at: https://cddwestafrica.org/wp-content/uploads/2022/04/Conflict-Dynamics-and-Actors-in-Nigerias-Northwest.pdf (Accessed 13 July 2022).

[5] Godwin Comrade Ameh, 2018.  “IGP Idris Reveals Number of Police in Nigeria”, Daily Post. Available at: https://dailypost.ng/2018/11/14/igp-idris-reveals-number-police-nigeria/ ( Accessed March 27, 2023).

[6] World Bank, 2023. “Armed Forces personnel, Total”, Available at https://data.worldbank.org/indicator/MS.MIL.TOTL.P1?end=2019&start=2019 (Accessed March 27, 2023).