Just what is wrong with our Universities?

ASUU and Nigerian Universities have once again become the talking point of many discussions with the current ASUU strike and the seemingly deplorable state of Nigerian Universities. So just what is wrong with Nigerian Universities?

Let me start off by saying that there is no reason to believe that education(tertiary education) is not a normal good. Education which is really an investment in human capital or knowledge and skills is a normal good like apples and cell phones. People are more likely to invest in their education( and attend a university) if the cost of that investment is low and less likely if it is high. How about the supply of Education? No reason to believe it’s not normal. If the cost of investment is high more universities are likely to spring up. The supply is a bit inelastic in the sense that it takes quite a bit of time to get new universities up and running but normal nonetheless. Given that both the demand and supply of Education are normal it seems that a society without a government should be able to arrive at some long run equilibrium price for education. Sounds good. No problems there.

However what happens when a society decides it wants everyone to get a university education regardless of the value the different individuals attach to it? Government steps in and offers to fund everyone’s’ college education either by paying costs directly for the students or by reducing the costs of education through funding of universities (A Government rich with oil dollars like Nigeria in the 70’s for example). The cost of education to the students go down a lot and hence the demand for education increases. The real cost of funding education to the government goes up but the government can still afford it. Lots of oil dollars. No problems there.

Average costs of Education are not fixed though. It seems to rise over time.Tuition and fees increased 439 percent from 1982 to 2007 in the United States.  So what happens when the Government cannot afford to completely fund education as it did before, either as a result of the rising costs of education or maybe it has a lot less oil dollars than before? If we assume that the government is also the supplier of education, then it seems the government can choose to reduce the quality of education. It can do this by admitting more students per university, or by paying staff of the universities less than their market value or by other general cost cutting measures. Lower Quality Universities lead to lower costs of running the universities. What is the effects on the students? Lower quality education. Of course the government has the option of simply asking students to pay more for education but this would cause such a public outrage. Why do we have to pay for education in a country blessed with such resources?

So a long term policy of subsidizing universities inevitably leads to a situation where the students get cheap and poor quality education and the government is burdened with a huge and unsustainable education bill. Sound familiar?

The  annual cost of tuition per student in the United States is somewhere between $5000 to $30000. It’s on average about $6500 in the UK, $6000 in Japan,and $2000 in Taiwan. I guess its safe to assume that the average annual cost of tuition in an imaginary quality university in Nigeria would be somewhere between $2000 and $30000. So it would cost an estimated $1.12bn at $2000 per year to fund quality education to the estimated 560,000 students currently in Nigerian Universities per year. Can the government afford that? Probably not. The entire budget for education in 2006 was just above $1bn and this includes basic and secondary education. It seems the logical way forward would be to get students used to the idea of paying for education again. This can’t happen overnight though. It would probably take just as much time for the universities to get back to international standards as it did for them to fall to their deplorable states.Fortunately it shouldn’t take as much time to change the structure of the education system to promote their long term growth and I think this starts with making the universities independent. Independent in terms of their ability to admit to students, to determine tuition and other charges to students, to determine remuneration to staff, to govern themselves and most importantly freedom from cash handouts from Aso Rock. Don’t get me wrong, Governments will still need to invest heavily in universities but investment in infrastructure and equipment is what is required. Scholarships for brilliant but poor students may also be necessary to ensure that poverty is not an excuse for intelligent students who would not have the funds to attend college.

How about ASUU? What part do they have to play? Well a majority of economists believe Unions are BAD. Why? Unions are an attempt to monopolize the labour market for their own interests, whatever these interests might be. I’ll save that topic for another day.

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