ASUU Strike and Government Funding Options

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The higher education sector has an essential dual role to play in every society: on the one hand, to produce a top-level workforce and to update those already in the labor market so that the nation become globally competitive. On the other hand, to carry out research and development activities that contribute to the economic growth of the nation.

In Nigeria, however, this is not the case as tertiary institutions are plagued with uncertainties and disruptions that potentially immobilize the aforementioned dual role. These uncertainties and disruptions are triggered by the fact that government actions do not match those of other developed countries who believe that the continued investment of public money in higher education attracts considerable real economic returns for the Nation. Other than the political rhetoric of current and past government officials, there is no workable evidence to support that the Nigerian government actually believes there is an economic benefit to be gained from continued funding for higher education.

Private Universities in Nigeria are beyond the scope of this article as I am focusing on the Public Tertiary Institutions (PHEIs), which have the majority of Nigerian students in their communities due to the current subsidy enjoyed by this sector.

In reality, if an honest appraiser conducts a value check, the result would reveal a seemingly increasing poor value for money for recent graduates of PHEIs in Nigeria. This alone remains the root cause of the perception that “education is a scam” or more profoundly, PHEIs have become an anachronistic and risky route to professional competence. In other words, the quality of PHEI graduates in Nigeria is under threat, which is one of the major contributors to rising unemployment and migration abroad in search of better education.

Let me admit, however, that the threat to the quality of graduates is not confined to Nigeria alone, which requires considerable pressure on the government of developing countries to come up with solutions to address to this threat in line with SDG 2030 Goal 4 – “ensure inclusive and equitable quality”. education.” But what makes the Nigerian case special is the government’s apathetic attitude towards improving the quality of its tertiary institutions. The bold reluctance and nonchalant attitudes that various governments past and present in Nigeria have protested to provide sufficient funds to improve university budget allocations or even consider it worth honoring the agreements made with the Academic Staff Union of Universities (ASUU) in 2009 and 2020 challenges the belief.

Currently, the ASUU is on strike, renewed for another 12 weeks, after the initial 4 and 8 weeks. Opinions are mixed on this recent strike, which came after 9 months of the ASUU strike in 2020.

As a speaker, I am sad and disappointed that we have to lower the tools. Still, ASUU’s demands are relevant. Universities are underfunded and neglected. It should no longer be an abode for intellectuals given the current state of infrastructure. Inns and amphitheaters are dilapidated. The existing faculties, laboratories, workshops and libraries are of inferior quality, to say the least. The welfare of University workers remains negligible. This is reflected in the current closure of all federal universities and some state universities after various other unions within universities (The Senior Staff Association of Nigerian Universities [SSANU] and the Union of Non-Academic Staff [NASU]) embarked on strikes to demand better welfare and modernization of infrastructure.

Besides wellness and physical challenges, our educational methodologies are outdated. Innovations in technological advancements have developed rapidly, changing teaching methodologies and the way courses are delivered globally. However, in Nigeria, our teaching model remains traditional, which is apparently an ineffective teaching approach. Our current educational structure would not make our graduates attractive to hiring companies that are not ready to engage them in additional capacity building. Indeed, the current university curriculum lacks analytical performance, critical thinking, and soft skills building, leading to low productivity and poor leadership in vocations and professions. All of these elements are incorporated into the ASUU appeal, which unfortunately does not make the headlines because improving well-being alone is often the main reason for the strike.

Without dwelling on the pros and cons of the strike, our universities need urgent funding to meet ASUU’s request so that universities can reopen and students return to various campuses to restart activities. economy in their localities. The federal government is not responding to their demands, citing lack of funds to meet a trillion naira request from the ASUU. A variety of financing options are available for short-term and long-term implementation:

The first option is a concession. According to the European Commission, concessions involve a contractual agreement between a public authority and a private investor, where the latter provides services or carries out works and is remunerated. It is expected that private investors will inject the necessary resources, which will improve the infrastructure and the quality of higher education. This option is very interesting for the government because it exempts them from financing the university since the financial risk would be transferred to the private investor.

However, the downside is the potential increase in tuition fees beyond the reach of many students from poor homes, negating Sustainable Development Goal (SDG) 4.3. that by 2030, the government must “ensure that all women and men have equal access to affordable and quality technical, vocational and higher education, including at university”.

Other factors making this option unattractive for low- and middle-income countries are: First, with an increase in tuition fees, the country would apparently experience a significant drop in enrollment and graduates. This will affect the potential labor force which will serve the entire economy. Firms and businesses may resort to importing workers from abroad at a higher cost with its inherent capital flight and pressure on the naira. Second, some experts have argued that the government can provide student loans to mitigate the decline in student numbers. It’s dead on arrival because we would most likely experience an increase in non-performing loans as graduates on student loans without a good job, and an attractive salary (not minimum wage) will struggle to meet the schedule reimbursement. The government could end up bailing out the banks.

The second funding option for the government is to borrow N1.3 trillion from over N26 trillion of our pension funds. Pension funds belong to the category of institutional investors. Lately, institutional investors are looking for long-term investments to deploy their assets. Fortunately, the population of Nigeria is young, which means that a significant amount is not reaching retirement age or is not retired, a favorable factor that pension fund managers consider before investing. long since they pay less in benefits than they receive in contributions. Understandably, the National Pensions Commission (PENCOM) frowns on investments outside financial markets or instruments, to avoid unreasonable risk-taking by administrators, which could lead to depreciation of investors’ funds. However, this practice is at odds with the global pension industry, which is looking to diversify into other sectors like education and long-term infrastructure.

The third option is to borrow from insurance companies. This option is worth considering because pension funds sometimes prefer syndicated investments, i.e. investing jointly in a consortium either with investors of the same category to spread the risk, or investing with those who have the ability to manage potential educational risk. Life insurance and automobile insurance accumulate funds over the long term through policyholders’ premiums which are not paid until the death of the policyholder or, in the case of a motor vehicle, a claim is made to following an accident.

While the last two options focus on debt, the government can also fund education through exactions. Exactions are an attractive strategy for securing additional investment in needed infrastructure in areas of high growth and where a country’s fiscal capacity is limited. In theory, if the cost of car insurance is increased by N5,000, while the original insurance costs are paid to the insurance companies, the additional N5,000 can be allocated to funding education superior. This could also apply to car licenses and flight costs or luxury items. For example, if an additional N5000 is added to the cost of flight per domestic passenger, annual license renewals and car insurance, all of which are payments made by those above the poverty line; the government will have 182 billion naira per year. Here is the breakdown: With the 12.9 million passengers who traveled on domestic flights using data obtained from Statista, the government would get N64 billion a year from this category. Similarly, if the same amount is added to driver’s license and insurance renewal, using NBS 2018 data of 11.8 million annual car licenses and insurance. The government would have N59bn each. In total, the abuses of these three articles would give the government 182 billion naira a year. Another 20 billion from the Treasury would meet ASUU’s 200 billion annual payment demands and the strike would simply evaporate.

IMHO any of the options listed above is a good place for the government to start phasing out higher education funding through budget allocation until universities can galvanize the model funding endowments through their various alumni branches. Since this administration is at the end of its dispensation, it could put in place the necessary legislation and policies that will allow the next dispensation to begin.


Dr. Chidiebere J. Anago is an infrastructure finance/PPP expert and holds a position as a Lecturer at the University of Nigeria, Enugu Campus. He can be contacted via: [email protected]

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