DECENTRALIZATION OF FINANCIAL RESOURCES FOR EDUCATION: THE NIGERIAN EXPERIENCE

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DECENTRALIZATION OF FINANCIAL RESOURCES FOR
EDUCATION THE NIGERIAN EXPERIENCE

• by
• Prof. Bridget Sokan
• DEPUTY EXECUTIVE SECRETARY (SERVICES)
• UNIVERSAL BASIC EDUCATION COMMISSION (UBEC)

Prepared and presented by the UBE Commission at
the Technical Workshop on Decentralization of
Financial Resources for Education held in
Brasilia on 5th December, 2005.
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INTRODUCTION

• BACKGROUND
• Historical Perspective
• Funding of Primary Education in Nigeria has
  suffered a lot of inconsistencies. For instance,
  between Independence and March 2002 when the
  Supreme Court ruled that states should access
  funds for primary education directly, six funding
  formulae had been tried out with states and local
  government funding basic education from March
  2002 till May 2004 when the UBE Act was passed.

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The 1993 Decree that established NPEC put in
place the following funding arrangement LGCs
FUNDING for total personnel emoluments of the
teaching and non-teaching staff of primary
schools. STATE GOVERNMENTS contributed 10 of
contribution of LGEA for personnel emolument and
running costs of the primary education board,
provision of infrastructure, furniture,
instructional materials for schools and capacity
building for teachers. FEDERAL GOVERNMENT
contributed N5 (five naira) per child per annum
as National Fund for supporting primary
education. The UBE act and the 2 Consolidated
Revenue Fund (CRF) for Basic Education is an
intervention of the Federal Government to boost
Basic Education, 98 of this fund is disbursed to
states under various criteria as Intervention for
Basic Education while the balance of 2 is for
UBEC personnel and overhead cost (The detail of
the funding will be discussed later).
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NIGERIAN EDUCATION BUDGET - NATIONAL AND STATES
Federal Input By the Nigerian constitution,
education is placed on the concurrent list of
responsibility of each tier of government. The
Federal Government has been involved most heavily
at the tertiary level allocating an average of
65 of its total education expenditure to this
level between 1996 and 2002. In the same years
the average share of the secondary level (for
Federal Unity Schools) was 14.5 and that of the
primary level was 11.5. In 2004, the total
allocation to education stood at N93.8bn with
tertiary level taking a sum of N55.4bn or 59.06
of the total Education allocation.
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State Governments Input

• Before April 2002, State Governments did not in
  practice control the funding of primary education
  but they now do. The median share in 1999, for
  example was only 18 and had been declining in
  most states. The funding pattern across states
  shows an average of 67 of State Government
  education expenditures is expended on secondary
  education, 11 on primary and 19 on tertiary
  education (ESSR, 2003). States with State
  Universities spent an average of 34 on tertiary
  education, thus effectively reducing state
  governments expenditure on basic and secondary
  education (Hinch Cliffe 2002).

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Listed in tables 1 and 2 are figures showing
education budgetary allocation to Kaduna and
Anambra states from 2000 2004 year. Table 1
Source Kaduna SMOE May, 2005 as cited in ESA
Synthesis Report, 2005.
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• Table 2

Source Anambra SMOE May, 2005 as cited in ESA
Synthesis Report, 2005 Note Recurrent
Expenditure as it applies to Government Special
Input to Girl-Child Education is part of the
State Recurrent Expenditure.
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ADMINISTRATION OF THE 2 CRF AS FEDERAL
GOVERNMENT INTERVENTION IN BASIC EDUCATION AN
EXAMPLE IN DECENTRALIZATION OF FUNDING FOR
EDUCATION
Background Education financing in Nigeria is the
responsibility of all tiers of the government
although they are all mostly dependent on a
single source of revenue from the Federal
Government. In order to meet the Education for
All (EFA) and Millennium Development Goals (MDG),
by 2015 the Federal Government set aside 2 of
its Consolidated Revenue Fund (CRF) as
Intervention in its Basic Education programme.
In the 2005 budget, a sum of N27.8 billion or
200m was to be released. The total cost
estimate for a nine years Universal Basic
Education is about US29 billion between 2005
2015 (World Bank 2005).
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• Sharing Formula of the 2 CRF
• UBE Intervention Fund
• The current sharing formula in operation as
  approved by the Federal Executive Council (FEC)
  provides that
• Matching grants to states - 75
• Educational imbalance grant - 14
• Good performance grant - 05
• Physically and mentally education grant - 02
• School feeding programme grant - 02
• State shares - 98
• UBE implementation fund - 02
• Total - 100

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• Conditions for Accessing the UBE Matching Grant
  (75 of CRF)
• The following are the conditions for accessing
  the UBE Matching Grant by States
• Enactment of the State Universal Basic
  Education Law in compliance with Section 12 (1)
  of the UBE Act, 2004.
• Establishment of State Universal Basic
  Education Board in compliance with Section 12 (1)
  of the UBE Act, 2004.
• Opening of separate Bank Account with the
  Central Bank titled UBE Matching Grant Account
  and forwarding the following particulars to UBEC
• Name and address of the Bank
• Title of the Account
• Account Number
• Names of the signatories to the Account, in
  compliance with the requirement imposed by the
  Federal Executive Council, June 2005.

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• Evidence of lodgment of States counterpart
  contribution in compliance with Section 11 (2) of
  the UBE Act, 2004.
• Development and submission of State Action Plan
  to UBEC for approval, in compliance with a
  requirement imposed by the Federal Executive
  Council, June 2005.
• Submission of Projects Technical Report and
  Financial Reports indicating that the earlier
  disbursement has been judiciously utilized.

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FUND UTILIZATION CRITERIA FOR UBE INTERVENTION
FUND The Federal Executive Council approved the
Criteria for Fund Utilization of the UBE
Intervention Fund to the States and FCT as
follows 1. Expenditure by Components of UBE
Program a) Pre-Primary Education - 5 b) Prima
ry Education - 60 c) Junior Secondary School
Level - 35 2. Expenditure by Activities in each
of the Components of the UBE Programme a) Infras
tructural Development - 70 This includes the
following Classroom construction Classroom
furniture Classroom renovation/rehabilitation Lab
oratory/workshop equipment Introductory
Technology equipment Borehole construction Constr
uction of toilets, etc.
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• b) Textbooks and Working Materials - 15
• This includes the following
• Development/procurement of textbooks in the
  pre-primary, four basic core subjects for primary
  and five basic core subjects in Junior Secondary
  Schools.
• Library Books
• Development/procurement of teachers guide in
  pre-primary, four core subjects in primary
  schools and five core subjects in Junior
  Secondary Schools.
• Teaching aids (excluding consumables), etc.
• c) Teacher Professional Development - 15
• Training and retraining of teachers at the three
  levels pre-primary, primary and junior secondary
  schools with more emphasis on primary, JSS and
  pre-primary, in that order.
• Total 100

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• 3. Memorandum of Understanding (MOU)
• Before any SUBEB embarks on any of the UBE
  Projects, both UBEC and SUBEB must agree as to
  the specific and peculiar needs of the State upon
  which projects/programmes evolve for execution by
  the grant. To that effect, Memorandum of
  Understanding (MOU) spelling-out the details
  shall be signed by both parties for execution by
  SUBEB.
• 4. Defaulting States
• A clause will be included in the MOUs to ensure
  that misused, misapplied or diverted funds are
  recovered through appropriate means including
  suspension or outright stoppage of grants to such
  defaulting states.

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• 5. Establishment of the Due Process Committees
• There shall be a Due Process Committee to be
  established at the SUBEB level with the following
  membership
• Executive Chairman - Chairman
• Board Secretary - Member
• Director, PRS - Member
• Director, Finance - Member
• UBEC Representative - Member
• Procurement Officer- Member/Secretary.

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2005 APPROVED BUDGET ALLOCATION OF
(N27,800,000,000.00) BY THE FEDERAL MINISTRY OF
FINANCE
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• 2005 UBE BUDGET PERFORMANCE
• Budget Estimate
• The Commission presented a Budget estimate of
  N29,349,000,000.00 to the National Assembly for
  its 2005 Fiscal Year. The estimate was lower by
  16 than that of 2004 Budget estimate of
  N34,976,006,277.00.
• The National Assembly appropriated the sum of
  N29,442,158,822.00 while the Federal Ministry of
  Finance harmonized figure was N27,800,000,000.00
  i.e. lower by 5.5 (N1,642,158,822.00).

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Statutory Release as at October 31, 2005 .
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• Disbursement by Components
• a) 75 Federal Government UBE Matching Grant
• Out of the N15,637,500,000 earmarked for the
  disbursement being 1st, 2nd and 3rd Quarter 2005
  only 30 states and FCT, Abuja draw their share of
  1st Quarter 2005 Matching Grant (see Appendix
  II). The slow draw down by the states was due to
  their inability to fulfill the disbursement
  guidelines.
• b) School Feeding Programme Fund
• With the recent launching of the National School
  Feeding Programme by Mr. President, Chief
  Olusegun Obasanjo on Tuesday September 25, 2005
  in Nasarawa State, and the conclusion of National
  Assessment Survey by UBEC, the School Feeding
  Programme support fund will be disburse to the
  deserving states soon.
• c) Other Components of the FG-UBE Intervention
  Fund
• Other components of the fund will be also be
  disbursed soon after the result of the National
  NEEDS Assessment Survey is available.

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EDUCATIONAL IMBALANCE GRANT 14

• Background
• The Needs Assessment Survey (2005) conducted by
  the Universal Basic Education Commission revealed
  the imbalance in the provision of education
  opportunities for basic education between the
  North and South. Available statistics revealed
  that 79.9 and 78.3 of adults in North East and
  North West respectively have no formal schooling
  experience while 27.1, 28.8 and 27.4 have no
  formal schooling in South East, South South and
  South West respectively. The literacy levels
  among the children in North East, North West are
  13.4 and 14.7 respectively, while South East,
  South South and South West recorded 56.6, 38.8
  and 54.8 respectively. In the area of numeracy,
  North East and North West are 33.3 and 27.8
  respectively while South East, South South and
  South West recorded 76.2, 63.6 and 72.2
  respectively.

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Sharing formula for 14 of 2 CRF for Bridging
Educational imbalance

• The Governing Board of UBE approved that 50 of
  the 14 of the 2 CRF meant to bridge Educational
  imbalance be shared to the twenty five
  educational weak states as captured in the second
  schedule of the UBE bill 2002 on equality basis,
  while the balance of 50 be shared to all
  federating states and FCT on equality.

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Table 3
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• Sharing Formula for 5 of 2 CRF as
• Incentive to Performing States
• Performance indicators will be used to share
  this fund. Such indicators will include
  promptness in counter-funding, committing funds
  to projects, quality of work done and timeliness
  in executing projects.
• Sharing Formula for 2 of 2
• Home Grown School Feeding Programme
• Twelve states have been selected across the
  geopolitical zones with two states per zone.
  This fund will be shared on equality.
• Sharing Formula for 2 of 2
• Special Education Fund
• Two Special Education schools per state (Public
  and Private) have been selected. This fund will
  be shared on equality.

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PUBLIC EXPENDITURE TRACKING

• The World Bank (2005) has commissioned a public
  expenditure review study. The objective of this
  is stated as the following
• establishment of a comprehensive analytical work
  linking expenditures and performance,
• provide estimates of the costs of the education
  MDGs to mobilize further resources,
• provide capacity building in expenditure analysis
  and adequate beneficiary consultations to
  determine priorities and
• provide further analytical work to provide sector
  support.

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C O N C L U S I O N

• For effective decentralization of financial
  Resources for Education, it is essential to
  conduct a Comprehensive Analytical Study of
  Public financing of Education. Previous studies
  by the World Bank on financing education (2004)
  and the Education Sector Analysis Study only
  revealed a partial picture of financing Education
  in Nigeria. It is hoped that findings from this
  study will set the template for decentralization
  of financing education in Nigeria.

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Thank You for Listening!!