Private Universities in Nigeria: A National Asset, A Neglected Partner - Ola Olateju

                                                                                                                                   Issue No 6

                                  "Education is the most powerful weapon which you can use to change the world."                                  — Nelson Mandela

Education is the foundation of civilization, the bedrock of progress. Plato, in The Republic, posited that “the direction in which education starts a man will determine his future life.” Yet, in Nigeria, while private universities provide an essential service in shaping the nation's future, they are stifled by government policies that neither acknowledge their contributions nor support their sustainability.

The government benefits from private universities—it licenses them, relies on them to absorb excess students, and praises them for maintaining academic discipline. Yet, it subjects them to financial suffocation through excessive taxation, exclusion from funding programs like TETFund, and harsh regulatory constraints.

In a country where public universities are plagued by strikes, inadequate funding, and infrastructural decay, private universities have emerged as a stabilizing force in Nigeria’s higher education system. They provide quality education, expand access for students, and contribute significantly to national development. Yet, despite these immense contributions, private universities are shackled by government policies that neither support nor recognize their indispensable role.

This paradox mirrors the words of Aristotle: “The worst form of inequality is to try to make unequal things equal.” While public universities receive full government funding and enjoy multiple privileges, private universities are expected to provide the same—if not superior—services without any form of support.

This Tuesday edition of Political Panorama with Ola Olateju,  is in continuation of our analysis of rights deprivation of the private universities by the Nigerian government and its agencies, critically examines the benefits private universities bring to Nigeria, the challenges that threaten their survival, and the unjust policies of government. It also proposes bold reforms, including tax holidays, concessional loan rates, and integration into TETFund benefits. Most importantly, it calls for a National Summit on the “Prospects and Problems of Private Universities in Nigeria”, where stakeholders can develop actionable steps to demand justice and reposition private universities as key drivers of national development.

"The direction in which education starts a man will determine his future life." — Plato

The Unquestionable Benefits of Private Universities

As the Nigerian population grows, so does the demand for quality tertiary education. Public universities are overcrowded, underfunded, and plagued by incessant strikes. Private universities, on the other hand, have stepped in to fill the gap. They have provided stability, discipline, and quality in an otherwise chaotic educational landscape. They are of immense benefits to the nation. The benefits include:

                                    

Hon Dr. Bode Ayorinde
Pro-Chancellor, Achievers University, Owo

1. Expanding Access to Higher Education

Nigeria's higher education system faces a significant capacity issue, as the country's universities can only accommodate 700,000 students out of the two million applicants seeking admission annually (Nairametrics)

This disparity leaves approximately 1.3 million qualified candidates without access to university education each year. Private universities play a crucial role in bridging this gap, providing opportunities for students who would otherwise be denied access to higher education.

2. Job Creation and Economic Growth

Private universities employ thousands of lecturers, administrators, and non-teaching staff. They stimulate economic activities in host communities, boosting real estate, transportation, and local businesses.

3. Reducing Capital Flight and Foreign Exchange Drain

Many Nigerians seek tertiary education abroad due to the limited capacity of domestic universities. Private universities offer a viable alternative, reducing capital flight and conserving scarce foreign exchange. For instance, the University of Dundee in Scotland faced a financial crisis partly due to a significant drop in Nigerian students following the devaluation of the naira, highlighting the impact of Nigerian students on foreign institutions (The Times)

4. Enhancing Academic Standards and Ethical Reorientation

In contrast to the frequent disruptions in public institutions, private universities maintain uninterrupted academic calendars, enforce discipline, and uphold global best practices in education.

5. Advancing Research and Technological Innovation

Despite limited funding, private universities contribute to research and innovation. However, with greater government support, they could serve as critical engines for national transformation.

The Pains of Private University Proprietors: A Heavy Burden to Bear

"Man is born free, but everywhere he is in chains." — Jean-Jacques Rousseau

Private university proprietors in Nigeria are caught in a paradox. They have invested billions in educational infrastructure, yet they are over-regulated, over-taxed, and under-supported. Their pains include

1.      Crippling Financial Burdens: The Heavy Cost of Running Private Universities in Nigeria

Operating a private university in Nigeria is an extremely capital-intensive endeavor, necessitating substantial investments in infrastructure, faculty recruitment, research facilities, and accreditation processes. Unlike public universities, which benefit from annual government subventions, intervention funds, and special allocations for accreditation, private institutions must operate without financial support from the government. This reliance on tuition fees places a significant financial burden on both university proprietors and students, rendering quality education less accessible. Establishing and maintaining a private university in Nigeria involves enormous capital and operational expenditures, including:

Infrastructure Development: Constructing classrooms, libraries, laboratories, hostels, and administrative buildings requires significant capital investment. The National Universities Commission (NUC) mandates that private universities meet specific infrastructure standards, often necessitating substantial financial outlays.

Faculty Recruitment and Salaries: Delivering high-quality education demands the hiring and retention of experienced lecturers, who command competitive salaries. Reports indicate that private universities allocate a significant portion of their annual revenue to staff remuneration, reflecting the high cost of attracting and maintaining qualified personnel.

Accreditation and Compliance Costs: Unlike public universities, which receive government-backed accreditation funding, private universities must self-finance accreditation fees, laboratory upgrades, and curriculum development. The NUC requires accreditation renewals every five years, incurring considerable expenses for private institutions.

Research and Innovation: To remain competitive, universities must invest in research and innovation. However, private universities in Nigeria lack access to Tertiary Education Trust Fund (TETFund) research grants, limiting their ability to finance advanced projects. According to TETFund’s reports, public universities receive substantial intervention funds annually, while private universities receive no funding.

Consequences of Financial Burdens on Private Universities

High Tuition Fees and Limited Accessibility

Without government funding, private universities charge tuition fees ranging from ₦500,000 to over ₦3 million per year, depending on the institution and course of study. In contrast, students in public universities pay less than ₦100,000 per year, largely due to government subsidies. This disparity means many academically qualified but financially disadvantaged students cannot access private university education, despite its superior learning conditions.

Slow Infrastructure Development

Lacking government subventions, private universities struggle to expand their facilities, resulting in slow growth and infrastructural deficiencies. Public universities, however, benefit from TETFund-sponsored projects, including lecture halls, laboratories, and research centers.

 Overburdened Students and Parents

Since tuition fees are the primary revenue source, private universities often increase fees to cover rising operational costs. This imposes significant financial strain on parents, many of whom resort to loans or asset liquidation to fund their children's education.

2.      Disparities in Funding: Public vs. Private Universities

The Nigerian government provides extensive financial support to public universities, including:

Annual Budgetary Allocations: Public universities receive federal and state government subventions that cover salaries, infrastructure, and operational costs. In the 2025 national budget, education, healthcare, and skills development collectively received ₦5.70 trillion, marking an unprecedented investment in human capital development.

TETFund Interventions: TETFund offers research grants, library funds, faculty development programs, and infrastructure projects—all of which private universities are excluded from.

Government-Funded Accreditation: The federal government finances the accreditation process for public universities, whereas private universities must bear these costs independently.

This disparity in funding creates an uneven playing field, compelling private universities to rely almost entirely on tuition fees for survival. Consequently, the high operational costs translate into elevated tuition fees for students, making private university education unaffordable for many Nigerian families.

3.      Unjust Taxation and Multiple Levies

Despite their role in alleviating the burden on public education, private universities in Nigeria face significant financial challenges due to taxation policies. Historically, educational institutions engaged in activities of a public character were exempt from income tax under Section 23(1)(c) of the Companies Income Tax Act (CITA). However, the Finance Act 2021 amended this provision, removing the blanket tax exemption for educational institutions. This change implies that private universities, depending on their legal structure and profit distribution practices, may now be subject to corporate income tax Mondaq

The Federal Inland Revenue Service (FIRS) has clarified that educational institutions registered as companies limited by shares, which can distribute profits to shareholders, are liable to income tax. Conversely, institutions established as companies limited by guarantee or incorporated trustees, operating on a not-for-profit basis, may still qualify for tax exemption https://old.firs.gov.ng

Beyond income tax, private universities are subject to various other levies, including land charges, local government fees, and state-imposed taxes. For instance, in the Federal Capital Territory (FCT), a 5% annual tax has been imposed on private schools, a move that stakeholders argue could financially strain these institutions Vanguard News

This taxation landscape contrasts sharply with the treatment of public universities, which receive substantial government funding and are typically exempt from such taxes. This disparity places additional financial burdens on private universities, potentially leading to increased tuition fees and reduced accessibility for students.

The current taxation policies impose significant financial challenges on private universities in Nigeria. Addressing these issues requires a comprehensive review of tax regulations to ensure that private educational institutions are not unduly burdened, thereby preserving their role in providing quality education.

4.      Lack of Access to Concessional Loans: A Major Barrier to Private University Growth

A critical challenge facing private universities in Nigeria is their exclusion from concessional loans for infrastructure development. Unlike their public counterparts, which benefit from government funding and intervention programs, private universities must source financing from commercial banks at exorbitant interest rates, increasing their operational costs and limiting their capacity for expansion.

5.      Heavy Import Duties on Educational Materials: A Burden on Private Universities

Beyond the issue of student loan exclusion, private universities face another major financial challenge: heavy import duties on educational materials. Books, laboratory equipment, Information and Communication Technology (ICT) infrastructure, and other essential learning tools attract high tariffs, taxes, and customs duties, significantly increasing the cost of education.

Nigeria currently imposes import duties ranging from 5% to 35% on various categories of educational materials (Nigeria Customs Service, 2023). For instance:

Textbooks and Academic Journals: Attract 5%-10% import duty despite being essential for learning and research.

Laboratory Equipment: Attract up to 20% import duty, making it expensive for universities to set up standard science and medical laboratories.

ICT Infrastructure (Computers, Servers, E-learning Equipment): Attracts a 35% tariff, hindering digital learning and innovation in Nigerian universities.

The consequence of these high import duties is a higher cost of education, as private universities are forced to transfer these expenses to students through tuition and other fees. This increases the financial burden on students and their families. Additionally, these policies slow down the pace of technological advancement and innovation, as universities struggle to afford cutting-edge learning tools.

Comparatively, countries like Ghana, Kenya, and South Africa have significantly lower or zero import duties on educational materials to encourage investment in education (African Education Policy Report, 2022). For example:

Ghana has removed import duties on books and laboratory equipment to boost research and learning.

Kenya provides tax waivers on ICT infrastructure meant for educational institutions to promote digital learning.

South Africa has special incentives for universities to import educational materials at lower costs.

Nigeria’s continued imposition of heavy import duties on educational materials contradicts its commitment to improving education. If the government is serious about enhancing research, digital learning, and overall educational quality, it must revisit its import tariff policies and grant exemptions for essential educational tools.

6.      Exclusion from TETFund and Research Grants

The Tertiary Education Trust Fund (TETFund), which pools funds from private sector taxation, is exclusively available to public universities. This is an injustice, given that private universities contribute to nation-building just as much as public institutions do. (See Issue No 5 of Political Panorama)

7.      The Unfair Exclusion of the Private University Students from the Federal Government Students’ Loan Scheme

One of the most disheartening policies affecting private university owners in Nigeria is the exclusion of their students from the federal government’s student loan scheme. This exclusion not only undermines the principle of equal access to education but also reflects a deep-seated bias against private institutions, which have been crucial in bridging Nigeria’s higher education gap.

Private universities were established as a response to the overwhelming demand for university education, offering quality learning environments and reducing the strain on public universities. Yet, the exclusion of their students from government financial support implies that education in these institutions is a luxury rather than a necessity. This assumption is flawed, as many students in private universities come from middle-class or struggling families making sacrifices for better education.

For private university owners, this policy is a major setback. It discourages student enrollment, creates financial instability for their institutions, and further deepens the misconception that private universities are solely for the rich. Data from the Statista indicates that Nigeria as at 2024, has over 270 universities, out of which 149 were private institutions, accounting for over 50% of the country's higher education institutions, while state and federal universities added up to 63 1nd 62 respectively.  (Statista, 2025). Yet, these institutions receive no financial aid or intervention from the government, despite their role in expanding access to tertiary education.

Furthermore, the exclusion of private university students contradicts the government's objective of increasing access to quality higher education, as it essentially denies thousands of students the opportunity to receive financial aid based on the institution they attend rather than their economic need. Research shows that over 60% of students in private universities rely on parental sacrifices and informal financial assistance to fund their education (Education Policy Review, 2023). By excluding these students, the government is failing in its duty to promote equitable access to education.

A more inclusive approach, where students from both public and private universities can access loans based on merit and financial need, would foster a fairer and more effective education system. The federal government must recognize that private universities are not competitors but partners in national development and should be treated as such in policy formulation.

The Infrastructure Challenge in Nigerian Universities

University education in Nigeria suffers from severe infrastructural deficits, affecting both public and private institutions. According to the National Universities Commission (NUC, 2023), Nigerian universities require an estimated N3 trillion to bridge existing infrastructure gaps in classrooms, hostels, laboratories, ICT facilities, and research centers. While public universities can access government support, private universities must rely solely on self-generated funds and commercial loans to build and maintain their infrastructure.

American University of Nigeria, Yola

The impact of this exclusion is profound in the following ways

High-Interest Loan Burden: Private universities borrow at interest rates ranging from 20% to 30% from commercial banks (Central Bank of Nigeria, 2023), making loan repayment difficult and limiting investments in quality education infrastructure.

Slow Infrastructure Development: Due to the high cost of borrowing, many private universities struggle to expand their facilities, leading to overcrowded classrooms and limited research facilities.

Increased Tuition Fees: Since private universities lack government support, they often pass the financial burden onto students through increased tuition fees, making education less affordable.

Limited Research and Innovation: Without access to affordable credit, private universities cannot invest adequately in research infrastructure, putting them at a disadvantage in global academic competitiveness.

Comparing Global Best Practices

Many countries recognize the role of private universities in national development and provide low-interest concessional loans to support their infrastructure growth. Examples include:

India: The Higher Education Financing Agency (HEFA) provides long-term, low-interest loans to private universities to develop infrastructure and research facilities (Government of India, 2022).

United States: Private universities have access to federal loan programs and tax-exempt bonds to finance capital projects at significantly lower interest rates (U.S. Department of Education, 2023).

South Africa: The government provides subsidized loans to private institutions to enhance research, teaching, and learning infrastructure (South African Higher Education Policy, 2022).

The Unfairness of Government Policies

"Justice will not be served until those who are unaffected are as outraged as those who are." — Benjamin Franklin

The Nigerian government’s policies on private universities contradict the spirit of fairness and national development. If education is indeed a public good, why is government assistance limited to public universities alone? Instead of fostering a robust higher education sector, the government’s policies are suffocating private universities, reducing their ability to expand access and maintain global standards.

Policy Recommendations: A Call for Immediate Reform

"An investment in knowledge pays the best interest." — Benjamin Franklin

To correct the existing financial injustices and ensure that private universities contribute effectively to national development, the Nigerian government must implement the following critical reforms:

1. Declare Private University Territories as Free Trade Zones for 15 Years

Private universities should be designated as special economic zones, exempting them from excessive taxation and regulatory constraints. This measure will encourage investment in higher education and ensure affordability.

2. Provide Concessionary Loan Rates

Government and development finance institutions should facilitate access to single-digit interest loans for private universities. By doing so, these institutions can expand infrastructure, improve faculty resources, and reduce financial burdens on students.

3. Grant Duty-Free Importation of Educational Materials

Books, laboratory equipment, and ICT tools for learning should be duty-free. The high import costs of educational materials significantly inflate tuition fees and limit access to quality education.

4. Integrate Private Universities into TETFund Benefits

Private universities should be included in the Tertiary Education Trust Fund (TETFund) to access research grants, infrastructure development funds, and library enhancement programs. This would ensure a level playing field with public institutions.

5. Reduce Tax Burden on Private Universities

A tax holiday or significant tax reduction should be implemented to encourage private-sector investment in higher education. Recognizing the non-profit nature of these institutions is essential in shaping a fairer financial ecosystem.

6. Concessional Loan Schemes for Private Universities

To ensure that private universities can compete globally and contribute meaningfully to national development, the Nigerian government must extend concessional loan programs to private institutions. This could be done through:

 Creation of an Education Development Bank

A specialized financial institution dedicated to providing single-digit interest loans (below 10%) to both public and private universities for infrastructure development.

Inclusion in Government Loan Schemes

The Central Bank of Nigeria (CBN) and the Bank of Industry (BOI) should create special funding windows for private universities, similar to those provided to the agricultural and small-business sectors.

A National Summit to Reclaim the Future of Private Universities in Nigeria

"The function of education is to teach one to think intensively and to think critically." — Martin Luther King Jr.

It is time for private university proprietors to unite and demand change. The proposed National Summit on the Prospects and Problems of Private Universities in Nigeria should:

• Analyze challenges and propose practical solutions.
• Develop a policy blueprint advocating for fair government support.
• Engage policymakers in a structured dialogue.
• Explore alternative financing models, including development bank partnerships.
• Establish a strong lobbying platform to negotiate better terms with the government.

Conclusion: A Call for Justice and Fairness

The exclusion of private universities from government funding, concessional loans, and educational grants places them at a significant disadvantage. Operating a private university requires substantial financial investment, yet government policies continue to favor public universities. If Nigeria aims to achieve a globally competitive higher education sector, policymakers must recognize private universities as essential partners in national development and provide financial support mechanisms that alleviate the burden on both institutions and students.

Additionally, the exclusion of private universities from student loans, concessional credit facilities, and tax waivers on educational materials reflects a policy bias against private education in Nigeria. Given that private universities constitute over 50% of the tertiary education sector, the government must recognize them as critical partners in national development. Providing concessional loans for infrastructure development will reduce financial burdens, enhance educational quality, and promote economic growth. If Nigeria is serious about achieving a world-class education system, it must adopt global best practices and ensure equal access to financial support for all higher education institutions.

The challenges of student loan exclusion and heavy import duties on educational materials are part of the broader difficulties faced by private university owners in Nigeria. While private universities are playing a crucial role in expanding access to higher education, government policies continue to undermine their efforts. A more inclusive student loan policy and a reduction in import duties on educational materials would go a long way in making education more accessible, reducing costs for students, and fostering technological advancement. The federal government must treat private universities as key stakeholders in the nation's educational development rather than neglect them through unfair policies.

Nigeria’s private universities are not competitors to public institutions; they are partners in national development. Their contributions to education, employment, and research cannot be ignored. Yet, without government support, many will struggle to survive.

It is time for private university proprietors, education stakeholders, and policymakers to rally together and demand the fairness they rightfully deserve. The future of higher education in Nigeria depends on it.

As John F. Kennedy aptly put it, “Let us think of education as the means of developing our greatest abilities, because in each of us there is a private hope and dream which, when fulfilled, can be translated into benefit for everyone.”

Nigeria must not allow these dreams to be extinguished.