Endowment funds may boost quality of higher education, diversify funding sources

The recent record endowment of N500 million to the Lagos Business School (LBS) by the Onosede family has once more uncovered the increasing need for Nigerian higher institutions, the public universities in particular, to explore other sources of funding. For far too long the government remains the main source of university funding. The government in turn depends on oil revenue.
Endowments represent money or other financial assets that are donated to universities or colleges. The sole intention of the endowment is to invest it, so that the total asset value will yield an inflation-adjusted principal amount, along with additional income for further investments and supplementary expenditures.
Experts say the decades-old partnership between universities and the Federal/State government is at risk financially due to hard times. No amount of industrial actions by faculty and staff, would force the government to cough up money it does not have, and no matter how unprecedented the strike lingers, such action will only continue to put universities at great financial risk and in a state of embarrassment.
Akin L. Mabogunje, Chairman, Governing Board Ibadan School of Government and Public Policy, in an attempt to explain how and why the Federal and State governments became sole sources of funding for public universities described what he called the rise of the “awuff” society in Nigeria. This signifies “free” money or unearned income which is not the product of a person’s labour and therefore can be squandered or spent imprudently.
Mabogunje said if this were applied to governance, it describes a situation in which fiscal resources accrues to government not from tax revenue assiduously and diligently collected from citizens but from royalties and rent from the exploitation of mineral resources particularly petroleum which can therefore be squandered, spent imprudently or unaccountably or simply misappropriated into personal accounts.  It is a situation best captured in the statement “money is not our problem but how to spend it.

However, times are changing fast in Nigeria, global oil prices the major source of government earning dropped to $49 dollars per barrel from a record high of $100 per barrel a few years ago.  The National Bureau of Statistics (NBS) says Q1 GDP 2016 growth declined to -0.36 percent from 2.11 percent in Q4 2015 and 3.96 percent in Q1 2015 showing an unpredictable future in Nigeria’s economy. In addition, the Federal and State governments are faced with competing priorities as they relate to share of funding and resources. These situations call for a review of the funding structure of universities.

 

STEPHEN ONYEKWELU