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Proceedings of
The 27
th
International Business Information Management Association Conference
May 4-5, 2016
Milan, Italy
ISBN: 978-0-9860419-6-9
Innovation Management and Education Excellence Vision 2020:
From Regional Development Sustainability to Global Economic Growth
Editor
Khalid S. Soliman
International Business Information Management Association (IBIMA)
Copyright 2016
Innovation Management and Education Excellence Vision 2020: Regional Development to Global Economic Growth
xv
Migration in EU…………………………………………………………………………………………….
Hana Tomášková and Jitka Kühnová
2038
Factors Influencing Users Satisfaction Using Electronic Resources……………………………………….
Mohd Razilan Abdul Kadir, Rosnita Ab Ghani, Amzari Abu Bakar, Ap Azli Bunawan and Mohd Ridwan
Seman
2045
Knowledge Transfer in Cross-Border Merger and Acquisition……………………………………………
Yuen Yee Yen, Lew Sook Ling and Tan Bee Ting
2056
Le Management Des Universités : Gouvernance Et Compétences Requises……………………………...
Ramzi Maamer
2065
A Comprehensive Model of factors for Sustainable Leadership………………………………………….
Gratiela Dana Boca, Lindita Mukaj and Marsida Vishkurti
2074
Impact of Land Externalities and Real Estate Economic Potential………………………………………...
Janka Babelova
2085
Studies on the involvement of local government in the Danube Delta in raising the living standards…….
Adelaida Cristina Honţuş, Ioan Niculae Alecu, Raluca Florentina Creţu and Romeo Cătălin Creţu
2093
Development of a new Educational Model for Virtual Measurement Machine……………………………
Julian Jakubowski and Waldemar Woźniak
2102
Higher Education Funding in Nigeria: Issues, Trends and Opportunities………………………………….
Abd Rahman Ahmad, Kofar-Sauri Bello Garba, Ng Kim Soon and Abubakar Sadiq Bappah
2110
Country-of-Origin Brands from the Point of View of the Slovak and Czech Consumers…………………
Eva Smolková, Peter Štarchoň and Dagmar Weberová
2119
The Scientific Testing: Progress and Perspectives…………………………………………………………
Sevag Kertechian
2131
Economic, Social and Political Features of Workforce Migration. Case Study – Romania……………….
Mărcuță Alina, Purdoiu Șerban, Tindeche Cristina, Mărcuță Liviu and Purdoiu Letiția
2134
Influence of the Economic Crisis on the Evolution of Earnings and Labour Costs in Romania…………...
Mărcuță Alina, Purdoiu Șerban, Tindeche Cristina, Mărcuță Liviu and Purdoiu Letiția
2141
Managing Attitudes of Consumers towards Brands and Quality…………………………………………..
Lenka Ližbetinová and Dagmar Weberová
2147
Supply Chain Management as a Source for Competitive Advantages of Small and Medium Sized
Manufacturing Enterprises………………………………………………………………………………….
Cristian Dumitrache, Oualid Kherbach, Marian Liviu and Amine Goumrassi
2157
Social Analysis and Development Organizations: Problems and Prospects of Management………….......
Nataliya Tovma, Bayan Zh. Ermekbaeva and Leila Bimendieva
2168
Methods of Knowledge Representation in Knowledge Management Systems for Technological
Preparation of Production…………………………………………………………………………………..
Alfred Paszek, Katarzyna Marek-Kolodziej and Piotr Wittbrodt
2178
Innovation Management and Education Excellence Vision 2020: Regional Development to Global Economic Growth
2110
Higher Education Funding in Nigeria: Issues, Trends and
Opportunities
Abd Rahman Ahmad
Faculty of Technology Management and Business, Universiti Tun Hussein Onn Malaysia, 86400 Batu
Pahat, Johor, Malaysia
Tel: +607 4533952 E-mail: arahman@uthm.edu.my
Kofar-Sauri Bello Garba,
Faculty of Technology Management and Business, Universiti Tun Hussein Onn Malaysia, 86400 Batu
Pahat, Johor, Malaysia
E-mail: arahman@uthm.edu.my
Ng Kim Soon
Faculty of Technology Management and Business, Universiti Tun Hussein Onn Malaysia, 86400 Batu
Pahat, Johor, Malaysia
E-mail: ksng@uthm.edu.my
Abubakar Sadiq Bappah
School of Technology Education, Abubakar Tafawa Balewa University, P. M. B., 0248, Bauchi, Bauchi
State,Nigeria
E-mail: asbappah@gmail.com
Abstract
Higher Education is viewed in Nigeria, as in many other developing nations, as a critical contributor to
national development. This is because of the belief that economic and social developments are driven
more by the advancement and the application of knowledge. This belief has therefore made the Federal
Government in Nigeria to keep playing a prominent role in the development of education in terms of
funding and even governance. A National policy on education was therefore designed to chart the course
of educational development in the country and has been a major reference point to both the public and
private education providers. Higher Education funding has been described as the process of procuring and
disbursing financial resources to tertiary institutions, for the provision of education of a given standard.
Keyword: higher education, funding, funding formula
1. Introduction
Historically, due to its importance to national economic performance, Higher Education funding has been
the exclusive preserve of national Governments nationwide (Albrecht & Ziderman, 1992). This is also the
case in Nigeria as funding of the Federal Universities is the sole responsibility of the federal government.
All public universities are financed by grants/ subventions provided by either the federal or the state
governments with very little or insignificant contribution by the students in terms of fees. Although there
are quite a number of models for funding higher education globally, Nigeria Like many other countries
where tertiary education is being sponsored by the government, uses the incremental budgeting system to
allocate funds to the Federal Universities (Akinsolu, 1990; Olayiwola, 2012; Wangenge-Ouma, 2011).
2. The Budgeting for Higher Education
Initially, budgeting for higher education revolves around the NUC due to its advisory role to the
government (Omoregie & Hartnett, 1995). The commission is expected to collect all budget requests
Innovation Management and Education Excellence Vision 2020: Regional Development to Global Economic Growth
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from the Federal Universities and scrutinize them to ensure complete compliance with the provisions of
the funding parameters as approved by the government. The reviewed proposals are then recommended
and forwarded to the Federal Government for funding. A budget defense session, coordinated by the
National Assembly, will require all the universities to defend their budgets and allocations will be done
on that basis. Notification of allocations will be forwarded to the NUC by the Federal Ministry of
Education and each university is expected to prepare its operating budget based on the actual allocations,
using the parameters set by the NUC.
The Commission, as the supervisory agency responsible for the management of all the universities in
Nigeria, is also saddled with the responsibility of distributing the Federal Government’s block grant
allocations to the federal universities. The approved grant is further divided into recurrent and capital
allocations, and is expected to be distributed in the ratio provided by the NUC funding parameters. Based
on the provisions of the funding parameters (as presented below), the universities will prepare their
operational budgets for the approval of NUC, and subsequent fund allocation. Thus the entire budgeting
process is guided by the NUC funding parameters.
Besides this, the commission stands between the universities and the federal government, thereby
insulating them from direct political control. They also ensure that these universities are fully accountable
to the government, especially with respect to national policy implementation. As such it acts as a control
agent for the federal government and ensures that the ethics and the standards of higher education, as
defined by the government, are fully maintained.
3. Funding Parameters
To carry out its statutory role of receiving block grants from the Federal Government of Nigeria, with a
view to distributing same to the Federal Universities, the National Universities Commission devised a
formula called “National Universities Commission Resource Allocation Parameters” which it uses to
allocate funds across all the federal universities in Nigeria (Akinsolu, 1990). These parameters are as
given below:
1. Enrolment specifications
Science based disciplines (including engineering) 60%
Social Science disciplines 25%
Humanities 15%
2. Student/ Academic staff ratios
Art based disciplines 15:1
Science based disciplines 10:1
Medicine 7:1
Education 24:1
3. Academic staff structure
Professorial grades 15%
Senior lecturers 25%
Other lecturers 60%
4. Non-teaching support staff ratios to academic staff
Senior administrative support staff 1:12
Senior technical support staff 1:2 (in science)
1:4 (in other units)
Junior Staff
Junior technical staff 1:3 (in science)
1:4 (in other units)
5. Allowances for direct teaching and services. This is based on the level of intensity of student
teacher contact, facilities and other teaching equipment required.
Innovation Management and Education Excellence Vision 2020: Regional Development to Global Economic Growth
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Art and education based disciplines 15 - 20% of staff salaries in the discipline
Science based disciplines 25 – 35% of staff salaries in the discipline
6. Line items funding
Library to total operating costs 5%
Teaching and research equipment to total operating costs 5%
Research and development to total teaching costs 20%
Public service to teaching costs 10%
7. Administrative support cost for each university
- Central administration. Calculated on the salaries and goods & services required by all non-
academic staff located in academic departments and units. The number of such personnel
shall be determined from the approved number of non-academic staff whose salaries have
been established under academic departments.
- Student services. This shall include the costs of students feeding; maintenance of student’s
hostels and cost of student’s sporting facilities. Note: feeding has however been suspended
since 1988.
8. Other services.
This includes the provision of university health services and the maintenance of university
grounds and properties and facilities. While the cost of university health services is calculated
per annum per staff member and his family, the cost of physical facilities is estimated on the
needs of the particular university, as well as the size of its physical plant and land area.
9. Non-academic expenditures (personal emoluments).
This includes leave passages, housing allowances and transport allowances, the allowances are
calculated based on nationally approved rates and the total number of staff approved for each
university.
10. Retirement policy: 1% of the university’s total operating expenditure, as approved by NUC.
11. Local Income (Internally Generated Revenue)
This includes receipts from various student fees charged by each university (e.g.
accommodation, ID Cards etc.), rents on university properties, interests on bank deposits, and
external grants received by the universities. The recurrent grant for each university is the NUC
recommended expenditure, less the amount of local income. The Commission has directed all
universities to raise at least 10% of their approved recurrent expenditure as internally generated
revenue.
12. Total Salaries:
This is estimated by calculating the average salaries of the recommended mixes of staff, by rank,
in particular university functions, i.e. teaching, research, technical, administration, maintenance
etc. and the number of staff allowed in the particular functions. Non-salary emoluments are
similarly obtained from the product of the current rates approved by regulation and the
recommended number of staff in each category.
Expenditures at the Federal Universities are divided into
1. Direct teaching expenses (salaries and wages of academic staff and their supporting staff),
2. Non-academic expenses (laboratories, libraries, research etc.) and,
3. Administrative support.
Direct teaching expenses are expected to be the largest of these three, as the essence of the University
system is the provision of teaching and learning. To this effect therefore, the NUC funding parameters, as
explained above, has recommended that all the universities must at least allocate nothing less than 60
percent of their total expenditures for direct teaching and academic activities, as shown in the table below
Innovation Management and Education Excellence Vision 2020: Regional Development to Global Economic Growth
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Table 1: Parameters for line items in recurrent grants calculations
Heading Description As % of recurrent
expenditure
Teaching and
Learning
Research and
Development
Direct Teaching
Teaching support
Teaching research and equipment
Staff development and training
General academic expenditure
Research
32.6%
1.6%
5%
2.3%
1.2%
10%
Source: Adapted from; Olayiwola (2012)
But despite the existence of the above elaborate parameters the commission has been incapacitated and
has been forced into haphazard allocations due to insufficient funding by the federal government
(Albrecht & Ziderman, 1992). Thus Okoroma (2007), believes that the NUC has lost its capacity and
capability to adequately supervise all the universities in Nigeria.
4. Funding Trends
Grants for recurrent and capital expenses of the Federal Universities are obtained from the Federal
Government, as university education is supposed to be free in Nigeria. Historically, funding for the
Federal Universities have been fairly steady, with universities receiving almost the full value of what they
requested from the government. The discovery of oil and the subsequent economic boom witnessed by
the Nigerian economy in the early 1970s made the Federal Government to abolish school fees and took it
upon itself to provide full funding for the Federal Universities (Okebukola, 2010). Prior to 1975, all the 6
federal universities in the country are fully and sufficiently funded. This led to an increase in the demand
for higher education, which made the government to establish additional tertiary institutions, especially
federal universities.
Innovation Management and Education Excellence Vision 2020: Regional Development to Global Economic Growth
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Table 2: Total Fund allocations to Federal Universities for the period 1999 – 2013
Source: National Universities Commission
However all this came to a sudden halt when the oil boom era was over. Government grants to not only
the Federal Universities, but to the entire education sector came crashing. The government, after reducing
the size of its grants to the Federal Universities, also attempted to increase the amount of fees payable by
students, which was violently rejected by the students union (Okebukola, 2010). Although the funding
pattern has seen some improvements from 1999, when a civilian government was sworn in, the increase
was only nominal, as the purchasing powers of these grants has significantly dropped due to inflation,
currency devaluation, economic and political turmoil and the impact of structural adjustment program
(SAP). The number of universities was also increased from 24 in 1992 to 40 in 2013, which further
stressed the financial stability of the Federal Universities. The annual grants to the education sector by the
Federal Government from 1999 to 2013 is shown in Table 2. A comprehensive analysis of the table will
be presented in the appropriate sections in this research.
Innovation Management and Education Excellence Vision 2020: Regional Development to Global Economic Growth
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Figure 1: Graphical representation of total fund allocation to Federal Universities
in Nigeria 1999 – 2013
Source: National Universities Commission (NUC)
5. Sources of funds for Higher Education in Nigeria
HEI funding is a very serious issue for most national governments, as they form part of their major
steering mechanisms through which they control the HEIs, and are as well linked to national policy issues
(Barr, 2004; Jongbloed, 2004). Besides the level of resources allocated to the HEIs, what matter most is
the funding mechanism as well as the criteria used for its allocation. The composition of funds, to a great
extent, determines an Institution’s level of freedom, and is likely to determine its internal governance
(Lepori et al., 2007). The figure below depicts a simple representation of the main channels of funding
higher education in the developed and as well as in the developing nations like Nigeria.
Figure 2: Sources of funds for HEIs
Source: Adapted from Lepori et al. (2007); Saint et al. (2003); and Jongbloed (2004).
Government
Private Sector
Students
Subsidies
/
loans
/
scholarships
Fees
Grants/Contracts/Donations
Grants/ Contracts
General Allocations
Business Units
IGR
Buffer
Organization
Formula
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Figure 2 above is a graphic representation of higher education funding channels in the developing and in
most developed countries (Jongbloed, 2004), and is further explained thus;
Government allocations:
This is the major source of funds for the Federal Universities in Nigeria. Government grants and
allocations constitute about 85 percent of the total income received by the universities (Akinyemi, 2013).
The grants are contributed for the running of the HEIs by the Federal Government and are being
channeled through the National Universities Commission.
Grants/ contracts from Government;
These are funds specifically allocated to the universities for particular projects or activities, for defined
periods. They include research grants received from research funding agencies, grants from international
bodies like the World Bank and UNICEF etc. In Nigeria for example, such funds are coming from the
Tertiary Education Trust Fund (TETFund). The trust fund was established by the Federal Government to
raise funds for tertiary education, thereby reducing their reliance on the Government. A 2% education tax
on the profits of all corporate organizations registered in the country, was therefore charged by the
Federal Government and is being collected by the agency for the development of tertiary education. The
Fund is a major source of financing for capital projects for the tertiary education sector in Nigeria.
Between 2008 to date, the fund has allocated over Six Billion Naira for the development of tertiary
education (as is shown in Table 2.2). It should however be noted that the intervention provided by the
Fund does not fund teaching and learning.
Table 3: Volume of funds allocated by TETFund for Tertiary Education in Nigeria for the period
2008 – 2014.
Source: Tertiary Education Trust Fund (TETFund).
Grants/ contracts /donations from private organizations
These represents grants or donations received by the HEIs from private business organizations, like
corporate bodies. The funds could come in the form of charities or endowments to fund specific activities
or projects within tertiary institutions. Some of the organizations that are currently supporting the HEIs in
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Nigeria, according to Ogbogu (2011), includes John D. and Catherine T. MacArthur Foundation, The
Ford Foundation, The World Health Organization (WHO) etc. Others, like Julius Berger PLC,
CHEVRON and the Petroleum Trust Development Fund (PTDF) also contribute physical infrastructures
for the development of tertiary education in Nigeria.
Student fees
These are fees collected from students either for tuition or for other educational charges by an institution.
Tuition fees, by far, contribute the largest share of student fees received by the HEIs. These fees are
classified into undergraduate and postgraduate fees. In most nations, especially in developing nations like
Nigeria, undergraduate tuition fees are free and funding is provided by the government, and where
charged, such fees are set by the government. Postgraduate tuition fees are however left at the discretion
of the institutions to charge at their convenience, as majority of governments do not subsidize
postgraduate education.
Internally Generated Revenues
These are funds mostly generated by the HEIs from their internal business and commercial activities to
boost their income base and reduce their over reliance on government funds. They include incomes like;
interest earned on bank deposits; charges for hostel accommodation and fees from consultancies and
other related incomes. According to the NUC funding parameters, each university is expected to raise at
least 10% of its operating expenditure internally (Omoregie & Hartnett, 1995).
It should be noted however that the choice of the funding mix for the institutions depends on the
governments perception of the visions and missions of higher education in any given nation and the
perceived role of education in national development (Omoregie & Hartnett, 1995)
References
Akinsolu, A. (1990). Formula Funding: A sine qua non for sustainable funding of Nigeria higher
education.
Akinyemi, S. (2013). Funding Strategies for Qualitative University Education in Developing Economies:
The Case of Nigeria. International Journal of Higher Education, 2(1).
Albrecht, D., & Ziderman, A. (1992). Funding Mechanisms for Higher Education: Financing for
Stability, Efficiency, and Responsiveness. World Bank Discussion Papers: ERIC.
Barr, N. (2004). Higher education funding. Oxford review of economic policy, 20(2), 264-283.
Jongbloed, B. (2004). Funding higher education: options, trade-offs and dilemmas.
Lepori, B., Benninghoff, M., Jongbloed, B., Salerno, C., & Slipersaeter, S. (2007). Changing models and
patterns of higher education funding: some empirical evidence. Universities and strategic knowledge
creation. Specialization and performance in Europe, 85-111.
Ogbogu, C. (2011). Modes of funding Nigerian Universities and the implications on performance. Journal
of International Education Research (JIER), 7(4), 75-82.
Okebukola, P. (2010). Fifty years of higher education in Nigeria: Trends in quality assurance. Paper
presented at the National Conference on the Contributions of Nigerian Universities to the 50th
Independence Anniversary of Nigeria, University of Ilorin, Nigeria.
Okoroma, N. (2007). The Supervisory Role of the National Universities Commission and the
Management of Universities in the South-South Zone of Nigeria. Educational Research Quarterly, 30(4),
35.
Innovation Management and Education Excellence Vision 2020: Regional Development to Global Economic Growth
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Olayiwola, S. (2012). Alternative Perspective to Funding Public Universities in Nigeria. Sustainable
Development-Education, Business and Management-Architecture. Retrieve from http://www. intechopen.
com/books/sustainable-education-business-andmanagement/alternative-to-funding-public-universities-in-
nigria on, 12-19.
Omoregie, P., & Hartnett, T. (1995). Financing trends and expenditure patterns in Nigerian universities.
Washington, DC: The World Bank.
Saint, W., Hartnett, T. A., & Strassner, E. (2003). Higher education in Nigeria: A status report. Higher
education policy, 16(3), 259-281.
Wangenge-Ouma, G. (2011). Managing resource dependence difficulties in African higher education: the
case of multiple exchange relationships. Higher education policy, 24(2),167-184
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This paper examined the modes of funding Nigerian universities with a view to assessing their adequacy and effectiveness. The implications of the mechanisms of funding on university performance were investigated. The history of university funding in Nigeria was explored in order to determine the causes of shift in financing the system since 1948 when the first university was established. The paper revealed that the costs of financing universities including: costs of teaching, research and administration, cost of accommodating increased enrollments, expenses of student maintenance, payment of staff entitlement/salaries and maintenance of facilities are increasing in excess of the corresponding rates of available revenues. The divergence in the trajectories of total university educational cost, the total available revenue and government subvention has led to capacity constraints of universities. This is evident in poor quality of teaching and research, poor conditions of work and insufficient attention to staff development, amongst others. The study found that the changing patterns in funding of universities are responses to the social and economic depression of the country, globalization, countrys desire to be integrated into the modern knowledge economy and increased enrollment without adequate planning. Consequently, the African political economy model was used in explaining the financial state of Nigerian universities, while the theory of human capital was used to support the arguments in favour of multiple forms of cost-sharing. These include private support from parents/students and donors since education is both a government and private investment. The study concluded that part of the solutions to cost-revenue squeeze in Nigerian universities is the development of proactive mechanisms that facilitate both the identification of multiple sources of funding as well as their optimal utilization in order to maintain financial balance and enhance performance. The Resource-Based Model for sustaining financing of universities was thus recommended.
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