PUBLIC-PRIVATE-PARTNERSHIP AND SUSTAINABLE HIGHER EDUCATION FUNDING : THE NIGERIAN EXPERIENCE

BY

Professor Bashiru Ademola RAJI

Vice-ChancellorFountain University,

Osogbo, NIGERIA

26th June, 2014

PROTOCOL

I thank the organisers, World Education Congress, for this opportunity to share the Nigerian Experience of how the Public Private Partnership has been helping to sustain higher education funding in my country, Nigeria..

It is also my pleasure to stand before this wonderful gathering to share my thoughts and ideas on the Nigerian experience of public private partnership in tertiary education funding in Nigeria. I hope we shall take one or two lessons from here.

Introduction

“….higher institutions in Sub- Saharan Africa face the formidable policy challenge of balancing the need to raise educational quality with increasing social demand for access… the task of funding these institutions will become increasingly difficult in the years ahead, as the youth population continues to grow, each country will have to devise a financing approach to higher education development that enables it to meet the challenge” (World Bank Report,2010)

Introduction (Contd.)In the light of the above, this paper will examine the concept of PPP, its models and successes with examples drawn from two Nigerian Universities.

Specifically, we will focus on Nnamdi Azikiwe University (Awka) and Fountain University (Osogbo), all of them in Nigeria.

At the end of the paper, participants will be able to understand the depth of Public Private Partnership as adopted and explored in funding Nigerian tertiary education.

Public Private Partnership : Definitions Even though there is no concrete definition of PPP, stakeholders, proponents and critics alike have come up with some working definitions of this concept. A report by Education International(2009) examines the different descriptions :

“An Agreement between governments and a private partner(s) (that may include the operations and financiers)according to which the private partner(s) delivers the service in such a matter that the service delivery objectives of government are aligned with the profit objectives of the private partner(s) and where the effectiveness of the alignment depends on a sufficient transfer of risk to the private partner(s)’’. (OECD, 2008)

Public Private Partnership : Definitions (Contd.)“ The set of arrangement in which the private

sector carries out the role of supplier of infrastructure of assets and services that have traditionally been provided by the government.” (IMF 2004).

“The transfer to the private sector of investment projects that traditionally have been executed or financed by the public sector.” (European Commission, 2003).

“A wide variety of working arrangements from loose, informal and strategic partnerships, to design build-finance-and-operate(DFBO) type service contracts and formal joint venture companies.”( European Investment Bank,2004).

Public Private Partnership : Definitions (contd.)For the purpose of discussing the Nigerian experience, we will agree with Egboka (2013) who describes PPP as a contractual arrangement formed between public and private sector partners involving the private sector in the development, financing, and operation of a public facility or service. He identifies the following as important features of PPP : Pooled Public and Private ResourcesShared Responsibilities Complementary Efforts Equity Sharing (if there is government organ

investment)Formation of Special Purpose Vehicle (to develop,

build, maintain and operate for the contracted period)

Models of PPPEgboka (2013) identifies the following as common models of PPP some of which has been successfully adopted by Nigerian universities :

Design-Build (DB) or Turnkey ContractManagement ContractLease and Operate ContractDesign-Build-Finance-Operate (DBFO)Build-Operate-Transfer (BOT)Buy-Build-Operate (BBO)Build-Own-Operate (BOO)Build-Own-Operate and Transfer (BOOT)Donor-Financed/funded-Transfer

Origin of PPP in Education PPP has a long history of practice with

Netherlands, Belgium and Denmark as pioneer adopters (IE,2009)

However, the present notion of PPP could be traced to early 1990s

It has a variation in nomenclatures in different countries of the world

UK (Private Finance Initiative) Canada(Alternative Financing Procurement) Mexico (Service Provision Project) Nigeria has adopted the concept of PPP since

the beginning of her 4th Republic in 1999. The ICRC Act was signed in 2005.

The Nigerian Education Funding Scenarioo Nigeria has 40 Federal; 38 State and 51

Private Universities o Nigeria has not been able to meet the

UNESCO standard for funding of education (i.e. 26% budgetary allocation)

o Lemo (2013) says the highest allocation so far between 2006 and 2013 has been 8%.

o Lemo (2013) also insists that 60% of funding for Nigerian universities goes into recurrent expenditure

o To complement government funding, agencies such as the Education Trust Fund and Central Bank of Nigeria intervene on infrastructural development in Nigerian universities.

o Yet, funding has not been sustainably adequate for universities in Nigeria.

The Nigerian Education Funding Scenario (Contd.)Records show that 1.5 million candidates have

consistently been applying for admission in the last 5 years in Nigeria due to inadequate funding and facilities (Lemo, 2013:23)

250,000 of these candidates are admitted (Lemo 2013:23)

From the scenario painted here, Nigerian tertiary education faces two key issues

i. Inadequate funding ii. Limited accessThe question now is how do Nigerian universities cope with these two key issues?

PPP : The Nigerian Experience

Universities in Nigeria are exploring the PPP option

They are redefining terms, models and concepts in PPP(as will be shown shortly)

In Nigeria, the Infrastructure Concession Regulatory Commission (ICRC) oversees PPP contractual agreement.

The ICRC has developed the National Policy on Public Private Partnership

In addition to this, he Commission regulates PPP agreement, monitors and supervises PPP projects in the country.

Steps to PPP in Nigeria

Egboka (2013) lists the following as necessary steps to be considered before a PPP agreement is signed : Clear vision, missions and goals for the

partnersThorough cost benefit analysis of projectsSecured contract detailing with clear shared

responsibilities Jointly agreed dispute resolution mechanism

Profile Established in 1980 by the old Anambra State. Handed over to the Federal Government in 1992. Philosophy is to disseminate knowledge to

individuals without let or hindrance Has two campuses in Awka and Nnewi, South

Eastern NigeriaIn the face of inadequate funding, the university has adopted PPP in developing the following projects :

PPP in Action In Nigeria: Nnamdi Azikiwe University, Awka

Fig. 1. Chike Okoli Centre for Entrepreneurial Studies (Donor-Design-Funded-Build and Transfer Project by Chike Okoli Foundation)

Fig. 2. JUHEL Building housing the Faculty of Pharmaceutical Sciences, UNIZIK.

This is also a Donor-Design-Build and Transfer Project.

Fig. 3. ELMADA International Hostels : A PPP Project of Build-Operate-Transfer model

Fig. 4 CHISCO Institute of Transportation Studies (A Donor-Build and Transfer Project by CHISCO Transport Ltd)

Fig. 5 Gauze Pharmaceuticals Ltd Pharmacy :A PPP Project of Build-Own and Operate (BOO) Model

PPP in Action In Nigeria: Fountain University, Osogbo, Nigeria.Profile

Established in 2007 by NASFAT ( a religious body)

Located in Osogbo, South Western Nigeria It is privately run by a faith-based organisation It is a pace-setting institution in terms of

learning, character-building and service to humanity

As a private institution, it faces a daunting task in raising funds to meet its vision

It has explored the concept of PPP for the following projects:

IBB Students’ Centre : A Donor-Build and Transfer Project

Hall Accommodation Project : Build-Operate and Transfer Project (BOT) facilitated by EasyPlace Properties

A Model of CONAS Complex: Donor-Financed/Funded Project (in partnership with Al-Jaiz Bank,Nigeria).

Hajia Amina Namadi Sambo Multi-purpose Hall: Donor-Build-Transfer Project

Adegunwa Hall of Residence: Donor-Build-Transfer Project

Conclusion This paper has taken us through the practice of PPP in

Nigeria. It focuses on two selected universities in Nigeria It has revealed that Nigerian universities are becoming

creative as far as funding issues are concerned They are coming up with different models of PPP Fountain University, being a private institution, is

exploring both public-private as well as private-private partnerships

PPP practice in Nigeria is far from being perfect In fact, it has tilted more towards infrastructural

development However, it is still a right direction towards ensuring

sustainable funding for universities Even though we have to do more, quality tertiary

education could only be achieved when sustainable funds flow in from individuals, private sector and other sources.

Thank you very much for your time !