Plummeting oil price, terror to hit university budgets

The plummeting price of crude oil on the international market is already affecting the operations of Nigerian universities. In addition, the fight against the Islamic sect Boko Haram and sudden postponement of general elections, with anticipated financial implications, have raised fears of severe cuts to higher education funding.

This is turning out to be a year of great uncertainty for the higher education sector.

Recently, the Committee of Vice-chancellors of Nigerian Universities met with officials of the National Universities Commission, or NUC, in Nigeria’s federal capital Abuja, mainly to discuss this year’s subvention to universities. At the meeting NUC officials informed vice-chancellors that there may be drastic funding cuts.

About 85% of the money that enters the coffers of the Nigerian federation comes from the sale of crude oil on the international market.

A high-ranking official of the NUC affirmed that since last November the value of the country’s crude oil on the international market had suffered two major setbacks that had serious implications for university financing.

First, the price of the crude oil had fallen by as much as 50%, meaning much less revenue for the government. Second, the government is shopping around for new buyers abroad because the United States – which has been a major purchaser of Nigerian oil – has stopped buying since commencing production of its own crude oil from schist.

Vice-chancellors were advised to manage the meagre subvention at their disposal. Already, the spectre of non-payment of salaries in the coming months is staring down at university administrations.

Islamist terror, upcoming elections

Two other factors may impact negatively on the subvention to universities.

First, Nigeria is at war. “The fight against Boko Haram insurgents is draining the resources of the federal government. This is no longer news. The only news on this matter is that when a country is at war, subventions to universities are not accorded major priority,” said Taiwo Akin, a higher education consultant in Lagos.

“This may be the case very soon. We may not be surprised if the Nigerian state and its regional components cannot pay the salaries of university staff. Non-payment of salaries in primary and secondary schools is becoming a reality in some states.”

The forthcoming elections are the major concern of the country’s political elite. One of the consequences of the elections is that the politicians devote more time to electioneering.

According to Dr Wale Suenu, secretary of the Academic Staff Union of Universities – ASUU – at Lagos State University: “Unfortunately our political class is less concerned with the subvention meant for universities.

“In their manifestos, there is no detailed and robust discussion with regard to how to increase funding in the face of the dwindling financial allocation to the universities. Thus we may witness drastic cuts in government subventions.”

Fears over special projects funding

There are fears in academic circles that approved funding of special projects aimed at retooling universities may not be realised in the midst of the financial crisis confronting the state.

In the early part of 2013, universities were shut for about six months. The ASUU called out members on an indefinite strike to press home the dire need for funding special projects in all universities.

The aim of the special projects, which were approved by the government, is to ensure that university infrastructure keeps up with the scientific and technological demands of the 21st century.

At the end of the industrial action, government agreed to make available specific intervention funds on a quarterly basis. According to a memorandum of understanding between the ASUU and the government, the Central Bank of Nigeria will disperse the money.

“With the current financial and security challenges confronting the central government, there are growing fears that these intervention funds running into millions of dollars could be legitimately diverted by the federal government to solve some of these problems,” warned a former vice-chancellor who did not want to be named.

* Illustration: AK Rockefeller. Wikimedia Commons.