By Kelvin Gilbert
It goes without saying that the Central Bank of Nigeria (CBN) under the leadership of Mr. Godwin Emefiele as governor, has impacted Nigeria’s developmental strides more than any other in recent history of the bank. The apex bank’s intervention programmes in various sectors of the economy including the creation of a N100 billion targeted credit facility; N100 billion health sector intervention facility, Creative Industry Financing Initiative (CIFI), N1 trillion for the manufacturing sector and of course its legendary exploits in the agricultural sector through the Anchor Borrowers Programme, have all gone to show the commitment of the bank to the development of the country beyond monetary policy regulation. It is therefore not surprising that the bank has also stepped in to salvage the nation’s languishing education sector knowing that education is central to any development efforts.
According to the World Bank, human capital development is integral to any country’s sustainable development and poverty reduction goals. Critically, education and knowledge capacity building are critical drivers of human capital development. Thus, investment in education is one of the bedrocks of society and helps determine the level of development recorded in an economy. The value of education in an economy cannot be overemphasized, as it helps shape both individuals and the broader society, and forms a huge source of economic value. Over the years, Nigeria’s education sector has suffered neglect of the worst order. In fact a review of the Central Bank of Nigeria’s (CBN) data suggests Nigeria’s educational sector has suffered massive capital flight in the last 10 years.
Specifically, using the CBN’s balance of payment statistics, Nigerians have spent a hefty sum of $28.65 billion on foreign education between 2010 and 2020. Needless to say that the high demand for dollars to pay these foreign educational institutions has affected the country’s foreign reserve (which currently stands at $33.39 billion), and contributed immensely to piling pressure on the exchange rate. According to data from Webometrics, the highest ranked Nigerian university is the University of Ibadan with a rank of 1,196 followed by Covenant University with a rank of 1,314. In other words, no Nigerian university is ranked within the top 10 per cent of universities globally. This may not be entirely surprising given that the funding of education at all levels is below the recommended benchmark by the United Nations Educational Scientific and Cultural Organization (UNESCO).
Specifically, UNESCO’s benchmark for funding education is 26 per cent of the national budget and 6 per cent of the gross domestic product (GDP). Nigeria’s budget for the education sector has averaged around 5.3 per cent of the budget which is in sharp contrast to the recommended target and continues to drop. From a GDP perspective, the figure paints an even more dismal picture, as the education sector accounted for 1.94 per cent of the real GDP in Q1 2021 and 1.86 per cent in 2020. According to data from UNESCO, about 76,338 Nigerians were studying abroad as of 2018, which is the highest recorded by an African country. From all indications, Nigeria’s persistent level of underinvestment compared to global standards does not bode well for any effort towards improving the nation’s human capital index, nor will it address the seemingly insatiable demands for foreign education.
The Nigerian education sector requires adequate funding as well as the willingness to build competitive value amongst its peers. It was perhaps in a bid to replicate the magic wand which has worked so well in transforming the Nigerian agricultural sector in the area of education, that the CBN under Emefiele delved into the education sector with different initiatives which if well implemented will place the nation’s tertiary institutions among the top 100 tertiary institutions in the world.
Among these initiatives are the N63 billion Central Bank of Nigeria (CBN) Centres of Excellence in nine Federal Government owned universities across the country to enhance post-graduate studies in financial related courses and the Tertiary Institutions Entrepreneurship Scheme (TIES) to train and finance entrepreneurship ideas of Nigerian university graduates. Inaugurating one of the centres of excellence at Ahmadu Bello University (ABU), Zaria recently, the CBN Governor, Emefiele said that the project was part of the apex bank’s intervention in education. He explained that the centres would be delivered in phases and the first phase, which comprised the University of Nigeria, Nsukka, University of Ibadan and Ahmadu Bello University, Zaria had been completed and ready for use by the institutions. He said that the others, nearly completed, are those in University of Lagos, University of Port Harcourt, University of Jos, Bayero University, Kano and University of Maiduguri.
Emefiele stressed that education and health were the bedrock of any nation’s development and there was the need to invest in them. He said that the centres, with 500-capacity auditorium, ICT facilities and e-Library, could compete with any business school globally. Emefiele said that when the centres become operational, programmes such as Forensic Accounting, Global Financial Market, Risk and Compliance Management would be offered at the centres. He assured the nation that the bank would get involved in the management of the facilities to forestall decay.
The governor also disclosed that the bank would engage accounting specialists and practitioners working in central banks across the world to bring their wealth of experience to bear at the centres. On the entrepreneurship scheme, the CBN Governor said the partnership with universities would also provide a platform for building digital skills relevant to Nigeria’s developmental goals. According to the CBN Governor who was addressing the 35th Conference of the Association of Vice Chancellors of Nigerian Universities (AVCNU), the partnership was to create a paradigm shift among students of the institutions from the orientation of pursuit of white collar jobs to start up business as employers of labour across micro, small and medium scale enterprises (MSME) sectors.
“The focus is to instill a culture of entrepreneurial development among the youth prior to graduation, by supporting them with start-up capital for their enterprises,” Emefiele said. “This re-orientation is also critical to the recovery efforts to address job losses, low productivity and weak growth impacts of post-COVID-19 pandemic on the productive sectors of the economy and the fallouts from the dwindling oil revenues accruable to the country.
“Micro, Small and Medium Enterprises (MSMEs) portend great opportunities for addressing these gaps and accelerating the economic growth, leveraging on our vibrant youth populations. “To this end, the CBN is developing a Tertiary Institutions Entrepreneurship Scheme (TIES) to re-orientate, train and finance entrepreneurship ideas among our graduates. “The scheme is designed to support the development entrepreneurial mindsets and culture through the introduction of a platform that provides seamless access to affordable finance to graduates through innovative channels for participation.”
There is no doubt that this bold step of the CBN in the education sector is not only well directed, but will indeed create a paradigm shift in the orientation of an average Nigerian graduate.
Gilbert is an economist based in Garki Abuja