THE EFFECT OF GOVERNMENT FUNDING ON EDUCATIONAL GROWTH IN NIGERIA ECONOMY (1990 – 2013)

CHAPTER ONE

INTRODUCTION

 

  • BACKGROUND OF THE STUDY

Education is one of the important areas where governments in both developed and developing economies direct its resources. The belief is that the result from education expenditures will go a long way in transforming human, social, economic, cultural and other aspects of the people’s lives. But however, the paradox accompanying this belief is that, despite  the huge investment in education, there exist no strong evidence of growth – promoting externalities of education in Nigeria, but rather, education expansion further deepens social inequalities and inculcate negative social changes such as cultism, rent seeking, industrial disputes, brain drain among other social vices in the Nigeria school system and the society at large.

Education funding comes from different sources. The major one for all levels of government is public revenue from taxation and proceeds from crude oil. Education funds are reported to be distributed among primary, secondary and tertiary educational levels in the proportion of 30%, 30% and 40% respectively (Balani 2003). The public funding includes direct government expenditure (for teacher’s salaries and instructional materials) as well as indirect expenditure in the form of subsidies to households such as tax deductions, scholarship, loans and grants. It also includes sources of funding education explored by the government like the payment for Education Tax Fund (ETF)established in 1995, Petroleum Trust Fund (PTF). Education Tax Fund ensures that companies with more than 100 employees contributes 2 percent of their pre – tax earnings to the fund. It is mainly for capital expenditures. The main sources of fund that the Nigerian government has are federal taxes and duties on petroleum, profits from imports and exports which form the revenue of the federal account and the centrally collected Value Added Tax (VAT) introduced in 1996.
The Nigerian government was able to finance education sector considerably, as a result of wealth generated from the sales of oil, whose discovery brought fundamental changes to the economy of Nigeria. The government of Nigeria allocated large amount of the wealth made from the sales of oil into expenditures in various sectors including education.

STATEMENT OF THE PROBLEM
Education in Nigeria is currently in crisis. There is less money to spend on Primary, Secondary and Tertiary education. Education sector complains of under-funding while the government accuses the sector of inefficient utilization of available resources. The donors argue that public spending on education should be reduced. At the same time there are growing changes at the education level.
Moreover, there are increasing complaints about poor standard of education at a period when globalization demands much from the educational system in terms of preparation of skillful labour force.
There is a rampant notion which is generally felt in the Nigeria’s education sector. The incessant strikes embarked by the ASUU and NASUU, Teachers in the secondary and primary schools etc have really affected the education sector. Owing to this, the academic calendar have been disrupted, pupils and students have stayed more than required in their studies. To the employed staff in the academic institutions, their agitations boil down to the inability by government to meet up the new salary scheme. More so, it is attributed to the poor state of the learning institutions, which the attention of the government is drawn on. These have prompted the researcher to analyze the implication of government expenditure on the Nigeria’s economic growth.

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Updated: 13th September 2017 — 3:10 pm

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