Public-private partnership as panacea to dwindling tertiary education funding
The bulging sewers litter around the university’s hostels reek of pungent smell as their gross contents seep out in trickles. The maggots begin to form in the evolution of a metamorphosis to something else. The walls of the buildings are flaky and caking.
The underbellies of the decking reveal their iron spines. The coat of paints has become whitewashed by the tropical sun.
The buildings look like long abandoned homes. They are not. That is where thousands of Nigerian students sleep, wake and live for years to acquire tertiary education.
Inside them are bathrooms with long-throat, thirsty taps. The students have to fetch water from some nearby wells.
With the ever-dwindling funding for tertiary education in the country, apart from falling standard of education, many facilities are literally falling apart.
Yet, in the face of this mess some higher institutions have rebuffed initiatives that can turn the fortune of their schools around; they face acute accommodation crisis but will not make available their expansive land resources to those willing to build, operate and transfer the ownership of hostels.
Though Nigeria has at least 40 federal government-owned and 38 state government-owned universities, it has not been able to meet the United Nations Educational, Scientific and Cultural Organisation (UNESCO) standard of 26 per cent budgetary allocation for the funding of education.
The highest allocation so far recorded was eight per cent in 2006 and 2013. Yet, 60 per cent of that funding for universities goes into recurrent expenditure.
In its wisdom, to complement the funding, the federal government’s agencies such as the Education Trust Fund and the Central Bank of Nigeria intervene on infrastructural development in the institutions.
The reality remains that funding has not been adequate for Nigeria’s tertiary institutions. That is even more frightening when the number of admission seekers is considered.
At least 1.5 million candidates have consistently been applying for admission in the last seven years and due to inadequate funding and facilities, only 250,000 of these candidates are admitted, raising the issue – again – of funding and access.
In a presentation to the international community on ‘Public-private partnership and sustainable higher education funding: the Nigerian experience’, Prof. Bashiru Ademola Raji, few years ago asked the question: “How do Nigerian universities cope with these two key issues?” the answers are not far-fetched.
According to the World Bank, higher institutions in sub-Saharan African countries like Nigeria face the formidable policy challenge of balancing the need to raise educational quality with increasing social demand for access.
It adds: “The task of funding these institutions will become increasingly difficult in the years ahead, as the youth population continues to grow, each country will have to devise a financing approach to higher education development that enables it to meet the challenge.”
That “financing approach” stakeholders in the education sector have come to agree is the collaboration between the gown and the town (private partners).
Public-private partnership is considered “an agreement between governments and private partners that may include the operations and financiers according to which the private partners deliver the service in such matter that the service delivery objectives of government are aligned with the profit objectives of the private partners and where the effectiveness of the alignment depends on a sufficient transfer of risk to the private partners.”
In other words, it is a set of arrangement in which the private sector carries out the role of the supplier of infrastructure of assets and services that have traditionally been provided by the government.
This agreement involves pooled public and private resources; shared responsibilities; complementary efforts; equity sharing (if there is government organ investment); formation of special purpose vehicle to develop, build, maintain and operate for the contracted period.
According to Prof. Raji, common models of the PPP adopted in some Nigerian universities include design-build or turnkey project; management contract; lease and operate contract; design-build-finance-operate; build-operate-transfer; buy-build-operate; build-own-operate; build-own-operate and transfer; donor-financed/funded-transfer.
With the Infrastructure Concession Regulatory Commission (ICRC) Act signed into law in 2005, some tertiary institutions in the country have been exploring, albeit not extensively yet, the PPP options. They are redefining terms, models and concepts.
The ICRC is saddled with the responsibility of overseeing the PPP contractual agreement, regarding which it has developed the National Policy on Public-Private Partnership. It, thus, regulates PPP agreement, monitors and supervises PPP projects in the country.
The Nnamdi Azikiwe University (NAU), Awka and Fountain University, Osogbo illustrate the success stories of public-private partnership.
For example, NAU has projects like the Chike Okoli Centre for Entrepreneurial Studies (a Design-Donor-Fund-Build and Transfer project); JUHEL Building housing the Faculty of Pharmaceutical Sciences; ELMADA International Hostels (a Built-Operate and Transfer project); Chisco Institute of Transportation Studies; and Gauze Pharmaceuticals Ltd Pharmacy.
At Fountain University, there are the IBB Students’ Centre; Hall EasyPlace Properties Accommodation Project (under Build-Operate and Transfer); College of Natural and Applied Sciences in partnership with Al-Jaiz Bank, Nigeria (a Design-Finance/Fund project); Hajia Amina Namadi Sambo Multipurpose Hall (a Design-Build-Transfer project); and Adegunwa Hall of Residence is another Design-Build-Transfer venture.
It is clear from the foregoing that more can be achieved in terms of funding through the public-private partnership initiative as long as the institutions are creative, credible and projects are laudable.
One of the infrastructure problems facing tertiary institutions is inadequate hostels for the increasing number of students.
Accommodation plays an important role in students’ life. To get the best out of them, they must not only have conducive environment to learn but to retire to.
In September this year, speaking at an event about crucial role private sector plays in education, the Special Adviser to the Lagos State Governor on Education, Obafela Bank-Olemoh, pointed out that the future of education requires private sector involvement.
According to him, strategic partnerships with private investors are vital in promoting excellence in tertiary education.
Bank-Olemoh explained that the Lagos State government, for example, has invested N15 billion in building school infrastructure to ensure that students learn in a conducive environment.
Similarly, the Vice President, Policy and Partnerships at the Bridge, Mrs. Adesuwa Ifedi, argued that the greatest cure for poverty is education.
“Education and work in the region will determine the livelihoods of nearly a billion people in the region and drive growth and development in generations to come.
The solution to Africa’s education has to be scalable in order to address the problem awaiting the continent in 2050 as revealed by the UN Department of Economic and Social Affairs World population prospect 2012 report that Africa will have the fastest growing workforce and school age children by 2050,” Ifedi noted.
The idea of partnering the private sector is not new or novel. In 2009, the federal government launched a PPP scheme to revolutionise students’ hostels to develop affordable and decent accommodation for the increasing number of university students in the country, with the inauguration of a Committee on University Hostels Build, Operate and Transfer Projects under the Minister of State for Works, Housing and Urban Development.
The committee was to evolve a cost-effective, efficient and viable mechanism that will ensure facilitation of collaboration among the government, private sector and universities in the provision of accommodation for the students. That committee was also expected to provide guidelines for the execution and management of the hostels and creating an enabling environment for operation of the scheme without direct financial involvement of the government.
Laudable idea but like some projects of the government, the exercise might have been used to siphon public funds; not much has happened since then almost 10 years after.
A report by Caitlin Dolkart, a summer investment associate at D. Capital and Barbara Kong, a senior investment principal at D. Capital and other industry experts noted that education plays a vital role in promoting economic growth and social justice, and is associated with a wide range of positive outcomes, including improved health to better livelihoods.
It claimed that each additional year of schooling results in a 10 per cent average increase in an individual’s earnings, raises average annual GDP growth by 0.37 per cent and ultimately contributes to a more inclusive, productive and engaged society.
However, countries like Nigeria continues to trail significantly behind the Organisation for Economic Cooperation and Development (OECD) country levels and enormous gaps remain.
It added: “Governments in sub-Saharan Africa cannot meet the extensive and increasing educational needs of their citizens given significant gaps in funding.
SSA represents only four per cent ($110.7 billion) of the global education investment (US $2.5 trillion), significantly below its 13.5 per cent share of the global population or its 22 per cent share of the global population of children under the age of 15.
The education financing gap in sub-Saharan Africa stands at a staggering $0.8 trillion to 1 trillion dollar at the primary level and $255 billion at the secondary and post-secondary levels.”
Against this backdrop, how will Nigeria continue to increase access to quality education despite the shortfall in resources and the rising population? In providing some answers the report noted the future role of private capital in education.
Private capital, it explained, has the potential to improve the education system in a number of ways by enhancing and supplementing existing public sector investments.
While the key challenges to investing in education must be addressed, these can be done alongside deploying capital in innovative ways to mitigate those challenges.
“Private capital needs to act to bridge the divide between public and private sector roles. The philosophical debate regarding the role of the private sector in the education system will not be solved easily.
Rather, a more productive discussion needs to be held at a country level and across sub-Saharan Africa regarding where and how the private sector is best placed to invest; means for the public and private sectors to partner; and, finally, ways that the public sector can invest in and support the private sector,” it argued.
Continuing, it said: “Today, there is a large divide between private investors funding private delivery models and public investors (i.e. the government) funding public delivery models. It is imperative that the dialogue shifts from talking about two independent sectors to one overall system with different funding streams.”
It is time for the gown to go all out to the town if it must save the future of tomorrow’s leaders.