Rising demand: Boosting private sector participation at all levels

Over the past five decades development of Nigeria’s education sector has proceeded unevenly. While the government has enacted several initiatives to improve the public school and university systems, ensuring that all citizens have access to high quality, affordable schooling remains a major challenge. With this in mind, in May 2012 the Federal Ministry of Education (FME) launched the country’s latest education development plan, the four-year Strategic Plan for Education (SPE), which takes a holistic approach to improving the sector, in line with Vision 20:2020, the government’s overarching long-term economic development programme.

SETTING OUT: In what was widely viewed as a positive signal of the government’s commitment to the sector, Nigeria’s 2013 federal budget earmarked some N426.5bn ($2.69bn) for education, the highest sector allotment in the document. While most observers agree this bodes well for the sector, some local participants remain sceptical. “We are happy to see such a development coming to the education sector, depending on where the money will be applied,” Chinwe Obaji, a former minister of education, told local press after the budget was announced. “Having said this, we must also wait and see if the said amount will be released fully and the implementation carried out without a hitch.”

Nigeria’s education sector continues to face a number of challenges. Indeed, the country’s education indicators are among the worst in the world. According to UNICEF’s 2012 “Education for All Global Monitoring Report”, some 10.5m school-age children in Nigeria do not attend school – the highest number in the world. Additionally, according to Jean Gough, the country representative of UNICEF in Nigeria, “quality is also an issue. It is no use passing through nine years of basic education and still being unable to read and write.”

Under the SPE and other ongoing development programmes, the government and a wide variety of private players are working to address these and other issues. The private sector, which has long been active in education, is expected to play a more central role in the coming years, both independently and in the form of public-private partnerships. Both public and private players are investing heavily in technical and vocational education and training (TVET), for example, which will likely be a key growth area in the coming years.

HISTORY: Inthe years immediately following independence in 1960, education was mainly the responsibility of local and regional governments and individual communities. According to a government report released in 1970, the public education system saw declining enrolment rates during the country’s first decade of independence. In an effort to boost enrolment, in 1976 the government introduced the Universal Primary Education (UPE) programme, which made primary education both free and compulsory for school-aged citizens. Since 1979 the sector has been jointly administered at the federal, state and local levels. In 1999 the UPE was replaced by the Universal Basic Education Programme (UBEP), based on the global education development standards laid out in the UN’s Millennium Development Goals. Objectives of the UBEP include providing nine years of free formal education for all school-aged citizens; boosting student retention rates in the public school system; and ensuring that all students achieve appropriate levels of literacy and other basic skills.

ORGANISATION & REGULATION: A wide variety of institutions oversee Nigeria’s public education system. The FME, which was formally established in 1988, has a mandate to manage the long-term development of the sector as a whole and to serve as the regulatory body. A substantial number of other public entities also operate under the broad umbrella of the FME. In addition to the Universal Basic Education Commission, which oversees the UBEP, these include the National Universities Commission (NUC), which regulates universities, alongside the National Board for Technical Education (NBTE) and the National Commission for Colleges of Education; the National Commission for Mass Literacy, Adult and Non-Formal Education (NMEC); the National Teachers Institute; as well as the National Library.

Historically the FME has taken a leading role in the development of the tertiary sector, while the primary and secondary segments have primarily been the domain of individual state and local governments. Each of Nigeria’s 36 states – plus Abuja, the federal capital territory – is responsible for developing and maintaining secondary institutions, while the country’s 774 local government areas (LGAs) are in charge of primary institutions. Education policy frameworks and development directives trickle down from the FME to the state governments and then to the LGAs, which are responsible for implementing the plans on the ground. As a result of the fragmented nature of this system, there have been, and continue to be, major disparities among the states in terms of the quality of education on offer.

LAID OUT: Several national education development plans are either currently under way or being planned. The SPE is part of President Goodluck Jonathan’s transformation programme, a raft of policies put forward by the president during the 2011 election. The SPE aims to strengthen the management of education; boost standards and quality assurance in the public system; improve teacher education; boost access to schools, particularly at the primary level; ramp up cooperation between the public and private education sectors; and expand the TVET segment. The initiative is carried out alongside the FME’s 10-year Strategic Education Plan (10SEP), launched in 2007. The 10SEP, developed with UNESCO, aims to bring Nigeria’s education sector in line with international standards by 2017. In addition to formalising the roles of the three tiers of government to streamline policymaking and implementation, the plan sets benchmarks for a variety of indicators, including increasing the adult literacy rate from 61% in 2010 (according the World Bank) to 85% by 2020. In addition to the 10SEP, the FME has partnered with UNESCO on a handful of other projects over the past decade, the majority of which are still under way. These include a $6m literacy programme, a $2.15m TVET project and a $3m initiative to boost science and technology training in schools and universities.

PERFORMANCE TRENDS: Nigeria ranks relatively low on most global education indices. In the World Economic Forum’s (WEF’s) 2012-13 “Global Competitiveness Report”, the country ranked 102nd out of 144 countries in total for quality of primary education, and 140th out of 144 for primary education enrolment as a percentage of the total population. Additionally, the country ranked 120th and 111th in terms of secondary and tertiary education enrolment rates, respectively. Furthermore, the quality of Nigeria’s higher education system was ranked 83rd in the WEF’s report.

The challenges for education providers in Nigeria are much more pronounced in some areas and among certain populations than others. Educational institutions and programmes in urban areas, particularly in the south, are generally better funded – and therefore offer higher-quality instruction and benefit from higher enrolment rates – than in the rural north. According to data from the National Bureau of Statistics (NBS), educational attainment in the southern states – as measured by the percentage of the population that has completed a primary or secondary school programme – has averaged around 60% in recent years, while in the northern states this figure is less than 20%. This is in line with the stark economic differences between the north and the south. According to NBS data published in 2012, poverty rates in the north-west and north-east were at 77.7% and 76.3%, respectively, compared to 59.1% in the south-west.

Educational attainment in Nigeria has historically also been split along gender lines, with female students lagging by a substantial degree. According to World Bank data, the female adult literacy rate in the country is currently roughly 50%, whereas the male adult literacy rate is around 72%. This disparity is the result of uneven enrolment and achievement rates throughout the education system. World Bank data also shows that there were 91 girls enrolled in primary school for every 100 boys in 2010, the most recent year for which data was available at time of publication. In secondary school this figure dropped to 88, and in tertiary programmes it is estimated to be lower still, though reliable data is currently unavailable.

THE SCHOOL SYSTEM: Public primary education is compulsory and free for all citizens between the ages of six and 15. Secondary education, available for 15-18-year-old students, follows either an academic or technical track, with the latter provided by a network of TVET institutions. Primary education is managed by authorities at the LGA level, and the national primary education system is funded by all three tiers of government, with the federal authorities providing the majority of the financing. The FME and state governments, meanwhile, are responsible for funding secondary schools. Increasing enrolment rates has been the government’s main focus, both at the state and federal levels. Over the past decade the country has seen steadily falling enrolment in the system. In 2000 some 6.9m school-aged children did not attend school. As of the end of 2012, according to UNICEF, this figure had jumped to 10.5m, equal to around 42% of total school-aged children. The UBEP programme, launched in 1999, is considered to be one of the government’s most effective means of attempting to improve enrolment figures, although issues remain. “The government’s basic education programme is good, but it has been perennially underfunded,” Warren Townsend, the head of Childville Schools, which operates a network of private primary and secondary institutions, told OBG.

FURTHER REACH: Another programme aims to provide formal education for the country’s 9m almajiri, or street children, who live primarily in the northern Muslim regions and have historically been overlooked by the formal education system. In April 2012 President Jonathan announced the Almajiri Education Programme, under which the government aims to build some 400 schools for this community. According to local news reports, as of the end of May 2013 some 124 schools had been constructed as part of the programme.

Nigeria is also home to a growing number of private schools, many of which offer international-standard education. “In general, private schools are far superior to public schools in Nigeria,” said Townsend. “The public school system is in a state of disarray.” Top private schools include Children’s International School, Atlantic Hall, the American International School and the British International School, among others. Boosting private sector participation in primary and secondary education is a key tenet of both the four-year SPE and the 10SEP. Perhaps more importantly, the segment is widely considered to be a potentially lucrative investment opportunity. Indeed, tuition costs at the country’s best private schools exceed $25,000 annually. “There is certainly money to be made in high-quality, carefully managed private schools,” Townsend told OBG.

HIGHER EDUCATION: The higher education segment is defined primarily by a lack of capacity. In 2012 more than 1.5m secondary school students applied for admission to universities in the country, according to the Joint Admission and Matriculation Board. As of the end of May 2012, according to the NUC, Nigeria was home to 129 universities in total, including 78 public institutions and 51 private facilities. Altogether, these institutions only have capacity for an estimated 20-30% of total annual applicants – up considerably from 5-15% in the early 2000s. This situation is especially acute at federal public institutions, which are widely regarded as offering the highest-quality programmes. In 2011, for example, just fewer than 100,000 students applied for admission to the University of Lagos, which has a total student body of just over 6000 students.

The lack of capacity among tertiary institutions in Nigeria has resulted in many students seeking placement abroad. “Every year around 80% of total applicants are turned down, nationwide,” R A Alani, a professor in the department of educational administration at the University of Lagos, told OBG. “Consequently, many Nigerians go abroad to study. The UK, the US and Eastern Europe are all popular destinations for those that can afford to study abroad.” According to a late-2012 statement released by the Committee of Vice-Chancellors of Nigerian Universities, Nigerians spend N75bn ($472.5m) in total at higher education institutions in Europe and the US on an annual basis.

The government is working to boost capacity. By May 2013, the public university segment consisted of 40 federal institutions and 38 state-operated institutions. Many of these entities were established within the past decade, as demonstrated by the fact that in 1999 there were just 39 universities in Nigeria, with a total capacity of nearly 65,000 students (enough to accommodate around 12% of the total applicants for that year).

In 2010 and 2011 the FME announced plans to establish 15 new federal universities, with each new institution to initially be able to accommodate around 500 students. In April 2013 the National Economic Council (NEC), a federal entity, announced a new plan to convert six existing universities into “mega-universities”, which would involve boosting capacity at each institution to 150,000-200,000 students. The largest public universities currently have a capacity of between 20,000 and 30,000 students. The government’s efforts to boost capacity in the public system have attracted substantial criticism in recent years, alongside cautious support. “Opening more universities is helpful in meeting increasing demand for admission spaces. However, such expansion should be matched with improved resourcing so that quality is not compromised,” said Peter Okebukola, professor at Lagos State University and former executive secretary of the NUC.

Higher education also has a role to play in ensuring that graduates have the skills the workplace requires. “There is a clear shortage of skilled managers in Nigeria, prompting businesses to invest in training. This is true across Africa, with a need for an estimated 10m additional managers, based on the size of the working population,” Enase Okonedo, the dean of Lagos Business School (LBS), told OBG.

PRIVATE SECTOR: Growing demand for higher education over the past decade has resulted in a rapid increase in private sector universities, which were not allowed to set up shop in Nigeria until 1999. Since then the number of private universities has expanded dramatically, from three in 2000 to 24 by the end of 2005 and 51 by the end of May 2013, according to NUC data. In recent years private institutions have accounted for 15-20% of total enrolment in the country, though this figure is expected to rise rapidly in the foreseeable future. For the 2012/13 school year, tuition fees at the country’s major private universities varied from N160,000-250,000 ($1008-1575) at the low end to N500,000-700,000 ($3150-4410) at the high end.

In a country where – according to the World Bank – more than 60% of the populace lives below the national poverty line, these prices are well out of range for the majority of Nigerians. Personal and student loans are mostly non-existent, due to the fact that only around 20% of the population participates in the formal banking system, making it nearly impossible for banks to assess creditworthiness. Consequently, most large expenses – like tuition fees – are paid for on a cash basis, often from long-term savings. A bill making its way through the National Assembly in May 2013 aims to establish a new Nigeria Education Bank, which would offer low-cost loans and other types of financing to qualifying citizens. The new institution would replace the existing Nigeria Education Bank, which was officially established in 1993, but failed to get off the ground.

TVET: Technical and vocational education has been a key component of Nigeria’s education sector since 1977 when the government established the NBTE, which serves as a regulator for the non-academic education sector. As of mid-2013 the segment consisted of 78 polytechnics, 36 agriculture colleges, 27 monotechnics, 50 health technology colleges, 99 vocational enterprise institutions and innovation enterprise institutions, and 132 technical colleges.

Expanding technical and vocational education in the country is considered a key component of government plans to lower the unemployment rate, which stood at around 24% in May 2013, according to the NBS.

Despite the large number of TVET institutions in Nigeria, the segment’s reputation has suffered as a result of a lack of understanding among the population. In recent years the government has also worked to develop non-formal education, a key component of the president’s policy platform. The NMEC, established in 1990 and a major player in this area, oversees a network of free literacy workshops and study centres throughout Nigeria. While the committee focuses primarily on literacy, it also hosts regular vocational training events aimed at unschooled youth and adults.

OUTLOOK: Major challenges faced by Nigeria’s education operators include low levels of government funding to the sector and a lack of well-trained education professionals. Also, some 44% of the country’s population was aged 15 or below as of the end of 2012, according to the US-based Population Reference Bureau. This large youth population – an estimated 75m people – points to rapidly expanding demand for education and training of all types for years to come.

The four-year SPE and the 10SEP are crucial for the country’s ongoing development. Boosting private sector activity, particularly at the primary level, continues to be a fundamental objective of the government’s long-term plans for the sector. Other key focus areas include information and communications technology (see analysis) and the TVET segment, both of which will likely benefit from more private sector investment in the coming years. With these developments, and taking into account the government’s planned spending in the sector over the course of the 2013 fiscal year, the education sector could be poised for a sea change.