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The timing may not be ideal for advocates of new federal institutions, as the Federal Government announced a seven-year moratorium on creating new federal universities, polytechnics, and colleges of education yesterday.
This action aims to address the issue of under-utilized institutions while reallocating resources to enhance existing ones.
The Federal Government is likely facing renewed pressure to reform public finances to curtail waste, prevent leakages, and improve cash flow.
President Bola Tinubu expressed concerns about the high costs associated with revenue collection during the Federal Executive Council (FEC) meeting held in Abuja, urging Finance Minister Wale Edun to promptly audit revenue collection and retention practices.
Edun further instructed ministries, departments, and agencies (MDAs) to obtain expenditure authorization before issuing contract letters, indicating that agency heads can no longer depend solely on appropriations to initiate projects.
This new directive is designed to alleviate the government’s liquidity issues and reduce the ongoing problem of contractors awaiting payment after fulfilling their contracts.
At the FEC meeting, Tinubu ordered a comprehensive review of deductions and revenue retention methods employed by Nigeria's major revenue-generating agencies, with the goal of boosting public savings, enhancing spending efficiency, and unlocking growth resources.
This includes the Federal Inland Revenue Service (FIRS), Nigeria Customs Service, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigerian Maritime Administration and Safety Agency (NIMASA), and Nigerian National Petroleum Company Limited (NNPCL). Specifically, he requested a reassessment of NNPCL’s management fees and exploration deductions under the Petroleum Industry Act (PIA), with suggestions for potentially repealing the landmark legislation.
Calls have been made to reevaluate revenue collection costs, as some experts argue that agency heads exploit inflated deductions to support their lavish lifestyles.
The tax reform aims to cut the collection cost to two percent through the establishment of the new Nigerian Revenue Service (NRS).
This reform proposes a shift from the current setup where the Nigeria Customs Service receives seven percent of customs duties while the FIRS takes four percent of non-oil taxes. The NUPRC also deducts four percent from oil and gas revenues.
As a result of inefficient fiscal practices, Nigeria reportedly loses trillions of naira annually. Last year, from January to November, the NCS, FIRS, and NUPRC together received N924.7 billion for revenue collection costs, according to figures from the Federation Account Allocation Committee (FAAC).
Despite significant improvements arising from tax reform, the President, under pressure to enhance revenue generation for a N55 trillion budget this year, expressed dissatisfaction and urged Edun to review the public revenue retention framework.
Currently, Nigeria has 72 federal universities, 42 federal polytechnics, and 28 federal colleges of education, with many experiencing poor enrolment rates. Specialized institutions, including colleges focused on agriculture, health sciences, and nursing, are similarly affected by low public interest.
This decision followed a memorandum from Education Minister Dr. Olatunji Alausa. Since assuming office in May 2023, President Tinubu’s administration has established 12 new tertiary institutions.
According to Alausa, the issue is not access to tertiary education but rather the unchecked duplication of federal institutions, which leads to inefficiencies, inadequate infrastructure, insufficient staffing, and declining enrolment.
He noted that many federal universities operate well below capacity, citing a case where a northern university employs 1,200 staff for fewer than 800 students.
Alausa revealed that there are currently 199 universities with fewer than 100 applicants through the Joint Admissions and Matriculation Board (JAMB), and 34 institutions had no applications at all last year.
The same issue is evident among polytechnics and colleges of education, as many of the 295 polytechnics received fewer than 99 applicants, and 64 colleges registered no applicants.
He warned that continuing this trend could lead to poorly trained graduates, diminishing the international standing of Nigeria's degrees, and increasing unemployment due to graduates being unqualified for the job market.
The moratorium is intended to allow the government to gather resources for upgrading facilities, hiring qualified staff, and increasing the capacity of existing institutions.
According to Alausa, the seven-year freeze will act as a reset for Nigeria's tertiary education system, shifting the focus from growth in numbers to quality. He argued against establishing new federal institutions without first enhancing existing infrastructures.
Despite the moratorium, FEC approved nine new universities. Alausa clarified that these approvals were for long-pending private applications that had been rigorously evaluated by the National Universities Commission (NUC).
He explained that his team streamlined the application process, deactivating over 350 inactive applications and establishing strict guidelines with clear timelines. Out of 79 pending applications, nine met the necessary criteria and were approved.
This situation reflects private investments where substantial funds have already been allocated for infrastructure.
Similarly, moratoriums are already enforced for new private polytechnics and colleges of education to prevent an excess of poorly subscribed institutions.
The issue of proliferation has raised concerns among stakeholders who argue that the government should focus on the development of existing institutions and their funding.
Nigeria has repeatedly failed to meet the United Nations Educational, Scientific and Cultural Organisation’s (UNESCO) recommendation of allocating 26 percent of the budget to education, with the highest recorded allocation being eight percent, of which 60 percent is consumed by recurrent expenditures.
To address funding shortfalls, the Federal Government has interventions from agencies like the Tertiary Education Trust Fund (TETFund) and the Central Bank of Nigeria (CBN), aimed at improving infrastructure
Nonetheless, funding remains inadequate, with groups like the Academic Staff Union of Universities (ASUU) advocating for empowered universities capable of addressing Nigeria's challenges, rather than "mushroom-glorified high schools."
The Congress of University Academics (CONUA) praised the decision, advocating for capacity expansion in existing institutions to enhance educational quality.
A University of Jos research assistant emphasized the need for infrastructure in existing institutions rather than building new ones. A member of the House of Representatives, Akin Alabi, welcomed the decision, suggesting it would allow legislators to focus more on quality legislation since many bills pertained to establishing new institutions.
He added that the government should also consider halting the creation of any new agencies, instead amending existing laws to meet new requirements.
Conversely, some stakeholders criticized the government’s decision as unjust and unacceptable. Michael Adaramoye of the Education Rights Campaign labeled the moratorium an inappropriate response to the educational crisis, emphasizing that existing institutions are already overcrowded and in poor condition.
He called for a reversal of the policy and an investment in the sector.
Omole Ibukun, from the Creative Change Centre, denounced the decision as an abdication of responsibility, arguing it ignores the massive demand for tertiary education among Nigeria's rapidly growing youth population.
Public affairs analyst Ifeanyi Nwoko supported the moratorium but cautioned against a blanket ban, advocating for a regulatory framework that enables reputable institutions to flourish.
In light of Nigeria's youth demographic pressures, he underscored the importance of balancing institutional expansion with the need for academic rigor.
Tinubu has given his administration positive feedback for restoring macroeconomic stability while setting an ambitious target for a seven percent growth rate by 2027, as part of the Renewed Hope Agenda's path towards a $1 trillion economy by 2030. This target aims to nearly double last year's growth rate and exceed the International Monetary Fund's growth predictions for the upcoming years.
The President's administration has undertaken significant economic reforms since taking office, including currency floating and fuel subsidy removal, which initially disrupted the economy but eventually restored stability and bolstered investor confidence.
He reiterated the government's commitment to encourage public savings to finance sustainable growth, reminding the Council of the need to enhance spending efficiency.
Tinubu addressed the necessity of comprehensively reviewing revenue retention practices, particularly scrutinizing deductions by revenue agencies. He emphasized that achieving this growth is a moral imperative necessary to tackle poverty in Nigeria.
Additionally, he highlighted the Renewed Hope Ward Development Programme, designed to empower grassroots economic actors and foster collaboration with state and local governments.
He urged governors to prioritize productive investments, strengthen food security, and ensure resources effectively reach local governance levels.
