THE EFFECT OF GOVERNMENT FUNDING ON EDUCATIONAL GROWTH IN NIGERIA ECONOMY (1990 - 2016)

THE EFFECT OF GOVERNMENT FUNDING ON EDUCATIONAL GROWTH IN NIGERIA ECONOMY (1990 - 2016)

 

TABLE OF CONTENT

Title page

Approval page

Certification

Dedication

Acknowledgment

Table of content

Abstracts

CHAPTER ONE

Introduction

Background of the study

Statement of the problem

Objectives of the study

Significance of the study

Research questions

Hypothesis

Definition of terms

CHAPTER TWO : Review of Related Literature

 Introduction

Educational systems in Nigeria

Significance of education and educational policy in Nigeria

Sources of funds for education in Nigeria

Education funding process

Factors affecting cost and financing of education in Nigeira

Challenges in Financing Education in Nigeria

Implications on Educational Growth

CHAPTER THREE: Research Methodology

Introduction

Model Specification

Sources of Data

Method of Data Analysis

CHAPTER FOUR: Data Presentation and Analysis

Introduction

Data Presentation

Data Analysis

Interpretation of Regression Result

CHAPTER FIVE: Summary And Conclusion

Summary of Investigation

Conclusion

Recommendation for further study

Regressions

References

ABSTRACT

This research work is on the effect of government funding on educational growth in Nigeria economy. The main objective of this research is to determine the effect of government funding on educational growth in Nigeria. This research work made use of secondary data which were sourced from the Central bank of Nigeria Statistical Bulletin (2016). The data were collected for a period of twenty four years (i.e. 1990-2016). The Ordinary Least Square Regression Technique was employed in the analysis of the data.  It was found among other things that based on the empirical result, it is concluded that capital government expenditure has no significant impact on the educational growth, while recurrent government expenditure has significant impact on educational growth in Nigeria economy. This is due to the fact that more money has been spent in maintaining the education system than building new and more educational facilities over the years.

It is recommended that the federal Government should increase her funding in educational sector especially on the capital component to boost educational growth in Nigeria.

CHAPTER ONE

INTRODUCTION

1.1      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.

     Government’s ultimate objective according to National Policy On Education (NPE) thereafter engendered indiscriminate establishment of institution and increased student enrolments to mention a few. According to Nwankwo (1992), enrolment in Nigeria higher education increased from 14, 468 in 1976 to 176,700 in 1996. This pace at which education had grown in Nigeria particularly since political independence is unparallel elsewhere among African nations (Adesina 1982).

1.2 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.

1.3 OBJECTIVE OF THE STUDY

The main objective of this research is to determine the effect of government funding on educational growth in Nigeria. Other specific objectives are as follows;
(i) To examine the extent to which government expenditure on education leads to economic growth in Nigeria.
(ii) To identify the limitations and barriers to public expenditures to educational growth in Nigeria.
(iii) To Proffer policy measures (recommendations) that will encourage development in the educational sectors in Nigeria.

1.4  SIGNIFICANCE OF THE STUDY

As the federal and state governments of Nigeria now faces development challenges that are key to both welfare improvements for the general population and enhancement of the education sector in particular, this study will act as a source of information on various methods of adopting effective measures of improving the education sector. It will serve as a reference point to the policy makers to adequately plan education funding.

The findings of this study will also provide an econometric basis upon which to examine the effect of government funding on educational growth in Nigeria. Hence, policy makers will be able to formulate an articulate and comprehensive policy with respect to educational management in Nigeria.  This research will also provide an objective view to the relevance of education to Nigerian economy. The findings of this research will also serve as good resource materials for those that intend to make further research on the effect of government funding on educational growth in Nigeria.

   It will help students and researchers to do further work related to this research project. More so, institutions of learning that may come across this research work can see the need to enhance funding of the education sector without solely depending on the government.

1.5 DELIMITATION OF THE STUDY
The study examines the effect of government funding on the growth of education in Nigeria from 1990 - 2016.

1.6 RESEARCH QUESTIONS

This research study, thus, should be viewed as a preliminary analytical exercise designed to address basic questions about government funding on the education sector in Nigeria. These includes the following:

• Does government expenditure promote education growth in Nigeria?
• To what extent has the barriers and limitation to educational growth been met?
• Has government funding on educational sector led to the improvement of the standard of education in Nigeria?

1.7 HYPOTHESIS OF THE STUDY

The following hypotheses are formulated to guide the study:

1.  Ho: There is no significant relationship between Government expenditure and educational growth in Nigeria.
H1: There is a significant relationship between Government expenditure and educational growth in Nigeria.

2.  Ho: There is no significant effect on public expenditure in education and economic growth in Nigeria.
H1:    There is a significant effect on public expenditure in education and economic growth in Nigeria.

LIMITATIONS TO THE STUDY

This study would have made to cover large population and geographical area but was limited by shortage of time and finance.

DEFINITION OF TERMS

In an attempt to define some of the terms used in the discourse , philosophical discussions are avoided. The following are the major terms used in the research with their various operational definitions;

·         Expenditure: is the countable or uncountable act of expanding or paying out or an expense.

·         Globalization: the process of making world economy dominated by capitalist models.

·         Capital: the means to acquire goods and services, especially in a non-barter system.

·         Revenue: all income generated for some political entity’s treasury by taxation and other means.

CHAPTER TWO

LITERATURE REVIEW