Times are changing fast in Nigeria and with the unpredictable future in our economy, the federal and state governments are faced with competing priorities as they relate to share of funding and resources.
For far too long, the government remains the main source of university funding for Nigeria’s higher institutions, the public universities in particular. Now that the nation is experiencing severe economic downturn, our universities must begin to look inward and outward for alternative sources of funding to meet the cost of running a quality university.
Nationwide, the universities are suffering from teaching and learning infrastructural shortage, and unable to fully drive innovations.
In our new digital world, Nigerian universities cannot count themselves as frontiers of technology, library resources, scientific institutes and high level human assets.
The cost of university has been rising, even as parental incomes remain stagnant and many states continue to experience declining finances.
Our population is growing with speed, so also is our student population. Some universities have no choice but to increase tuition just to meet some of their basic needs like electricity, water, housing and salaries.
The rise of new global competitors in university education is resulting in the best and brightest students and academics leaving Nigeria on a daily basis, to other African and Euro-American universities where quality university practices are surging.
The decades-old partnership between universities and the federal/state government is at risk financially due to hard times.
As Nigerians, we love education; as such we must do everything to make university education affordable for our students through quality university environments.
It is important to state that no amount of industrial actions by faculty and staff, will force the government to cough up money it does not have, and no matter how unprecedented the strike lingers, such an action will only continue to put our universities at great financial risk and in a state of embarrassment.
We need to aggressively seek out new and non-traditional sources of revenue such as endowment for improved money and long-term financial strength. It is time that universities drastically sought out and became significantly dependent on endowment funds.
The world is now in a state of global interconnectedness, and to reduce our financial pressure across all universities, endowment which is a critical strategic asset for university growth and longevity is worth creating and pursuing aggressively.
In a simple way but with complex features, an endowment means money or other financial assets donated to universities or other higher institutions. The main intention of the endowment is to invest it, so that the total asset value will result to an inflation-adjusted principal amount, along with additional income which will be used for further investments and additional expenditures.
Generally, endowment funds follow a suitably strict policy allocation, which is a set of long-term rules that dictates the asset allocation that will yield the targeted returns requirement without taking on too much risk. Most endowments have guidelines that state how much of each year’s investment income can be used up which usually has a percentage.
Donors of endowment can sometimes restrict universities on how they can spend this money. For example, donors can decide to use a portion of an endowment’s scheduled income to provide funding for endowed professorships, which are used to attract world-class lecturers. For example, investment earnings on a gift now or in the future can be mainly for water supply which cannot be spent to renovate offices in the university.
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