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Institutional organisations

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Economic objectives (II) Tacticswo thoughtContinued from last week

  1. Secondary Education – Capital Cost

THE E.C.A. estimated the cost of building and equipment per pupil in secondary grammar schools at £67. This gives a total of £2,010 per class of 30 pupils.

A cost of £1,500 per classroom including cost of equipment is assumed.

 

  1. University Education – Recurrent Cost

Recurrent Unit Cost per Students in Nigerian Universities

 

UNIVERSITIES

Academic Year  lbadan  Nsukka Ife          Lagos     Zaria

1952/53                £1,054   —           —           —           —

1959/60                £1,072   —           —           —           —

1962/63                —           £854       —           £1,780   —

1963/64                £1.037   £627       £900       £1,000   £1,500

 

 

Source: Financing of Education in Nigeria – Gallaway & Musone.

 

It is observed that the unit cost is lowest at Nsukka. Gallaway suggested a number of reasons which include :-

(i) More favourable student/teacher ratio -12 students to one lecturer at Nsukka compared to 10 students to one at Ibadan;

(ii) the low incidence of maintenance costs – 8.8% at Nsukka compared with 14.8% at Ibadan.

(iii) the additional expenses in respect of expatriate staff especially

passage and travel- which is 9.2% at Nsukka and 12.5% in Ibadan.

It will be observed that what accounts for Gallaway’s second reason is the fact that Nsukka is more compact campus than Ibadan.

Under the present scheme it would not be necessary, for some time to come, to provide accommodation for most students; in which case unit cost can be maintained slightly below the Ibadan average.

Moreover, with greater student population, the student/teacher ratio will approach the maximum possible.

For these reasons, the unit cost of £1,000 per student per annum is considered a reasonable estimate.

 

  1. University Education – Capital Cost

The UNESCO recommends a unit capital cost of about £890 per student. Initial unit capital cost is likely to be high for the first few years when capital investment would be high. Thereafter the unit cost should stabilise at a lower level. A unit cost of £1,000 per student per annum is recommended initially and about £750 in later years.

 

  1. Technical Education – Recurrent Cost

Average recurrent cost per pupil in major technical and vocational institutions in Nigeria 1952-1962

 

1952       1955       1957       1959       1962

North (technical institute and trade centres)       377         186         —           366         279

North (Craft Schools)     —           —           180         155         101

East (technical institutes and trade centres)        265         —           —           230         280

West (trade centres)      —           —           300         500         290

Lagos (technical institutes and trade centres)     205         185         —           235         250

 

 

The costs range between £250 and £290 in 1962. Callaway observed that the main elements contributing to these high unit cost/pupil are:

(i) the fact that the schools are government operated and therefore the teaching staff are paid on the higher salary scales of the Civil Service;

(ii) expatriates represent a strong contingent in the teaching staff;

(iii) upkeep and maintenance costs;

(iv) under-utilisation of capacity.

It is believed that most of these factors can be controlled; and, in spite of rising costs since 1962, a unit recurrent cost of £250 per pupil can be assumed.

 

  1. Technical Education – Capital Cost

The building and equipment of the Technical College, Ibadan, which is non-residential, had cost £206,000 by 1962. This is for a maximum of about 200 students, thus giving about £1,030 per student. It is, therefore, assumed that a cost of £1,000 per student is reasonable. The number of teachers used for computing costs is based on the teacher requirements. This is estimated on the basis of the appropriate student/teacher ratio for the different levels of education.

Since graduate teachers and teachers of technical skills receive their training in universities and colleges of technology, the cost of educating them is included in university and technical college costs.

They are not separately computed as those of other types of teachers.

 

  1. Teacher Training – Recurrent Cost

(i) Unit cost per student in Government Teacher Training College, Akoka in 1967/68 was £176.8, and in Adeyemi College, Ondo, £94.9.

(ii) Callaway and Musone calculated the average grant per trainee in assisted Teacher Training Colleges as:-

North    £192       West     £ 75

East        £63         Lagos     £126

We assume a rate of £ 100 per trainee between 1971 and 1982 and £125 per trainee as from 1983. In making this assumption we have taken note of the fact that teacher training is free.”

 

  1. Teacher Training – Capital Cost

The same unit cost of £50 per student, assumed for secondary schools, is also assumed for the teacher training colleges.

 

APPENDIX II

Projections of growth rate, and revenue potentials

Table 8, with the footnotes, speaks for itself. But it is necessary to explain the raison.d’eire of the figures shown in columns 2, 3, 4, and 5 of this Table.

Columns 2 and 3: Vajo Skendzic, Vice-President of the Yugoslav Trade Union Federation, in an article, titled Trade Unions In the Self-Management System, published in Yugoslav’s Review of International Affairs, – No. 456 of 5 April, 1969, gives a classification of different levels of economic development, based on average annual per capita income, as follows:

(i) Undeveloped economy (pre-industrial society) – $50 – 200

(ii) Developing economy (society in the process of industrial development) – $200 – 600

(iii) Developed economy (industrial society) – $600 – 1,500

(iii) Highly-developed economy (advanced industrial society) – $1,500- 4,000

(v) Post-industrial economy (post-industrial society) – $4,000-20,000

Nigeria’s present per capita income is estimated to be £25 (that is $70). It is clear, therefore, that we belong to the first level of the above classification. According to Vajo Skendzic, Yugoslavia was also in the first level in 1939; but within the last twenty years, her economy has advanced to the third level. It is easy to deduce from these facts that Yugoslavia’s rate of economic growth was very high during the two decades from 1949 -1968. In the course of the same article, Skendzic comments as follows:

‘Yugoslavia, with a per capita income and productivity of labour still several times lower than those in economically highly developed countries, must continue to maintain if not a very high average annual rate of growth (8-10 per cent) at least an appreciably high rate (6-8 per cent) since a more moderate rate of growth (4-6 per cent) would not be justified on the ground that it would take an unnecessarily long time to modernise the economy and the social structure.’

All those who have given thought to the crucial problem of the economic growth rate of underdeveloped countries would share the views expressed above by Skendzic.

It will be seen, therefore, that the targets proposed in column 3 are the least we can aim at, during the 20 years from 1971/72 to 1990/91, as growth rates in our GDP, rising steadily from 5 % in 1971/72 to 10% in 1976/77, and thereafter maintained at that rate right up to 1990(91. As we noted on page 19, we had already achieved an average annual growth rate of 6.6% during the period of 1958/59 to 1966/67. We should aim at much higher than this after the recent civil war, especially as we managed, without much conscious direction, to exceed the ceiling we now set for ourselves, in 1960/61 and 1962/63 when we scored the high growth rates in our GDP (excluding oil) of 14.0% and 10.5%, respectively. Otherwise, we would remain economically earth-bound for several generations to come, and would be afflicted, in the process, with social maladies of greatly tormenting proportions.

Column 4: In his book, Theory of Economic Growth, Professor Lewis tells us on p. 397 ‘ that taxation in the United Kingdom runs currently at around 35% of the national income, compared with around 8% in India, and around 5% in Nigeria.’ He wrote these words in 1954 or thereabouts. We have since improved our performances, and taxation now accounts for about 11.8 % of our GDP. On page 401 of the same book, Professor Lewis maintains, by necessary implication, that less than 20% or 30% of GNP in taxation would make it’ impossible for the Government to play the roles it needs to play in economic development.’

In Public Finance and Fiscai-Policu edited by Scherer and Papke, Otto Eckstein tells us on p. 156 that the ratio of tax to GNP in USA in 1929 was 11 %. In 1939 it rose to 16.8%, and in 1943 to 25.5%. It was 28.2% in 1965.

Now, what we have proposed in Column 4 are as follows:-

1970/71 – Revenue from taxation =          11.8% of GNP

1971/72 –             ”              ”                              13%        ”

1972/73 –             ”              ”                              15%        ”

1973/74 –             ”              ”                              18%        ”

1974/75 –             ”              ”                              20%        ”

1979/80 –             ”              ”

1980/81 –             ”              ”                              25%        ”

1990/91 –             ”              ”

In this connection, it is opposite to refer to p. 13 of the Paper, entitled Economic and Social Survey, read at the Conference On National Reconstruction and Development in Nigeria. There, it is shown that, as a percentage of our GDP, our revenue rose from 9.8% in 1959 to 11.8% in 1966. According to Lewis, op. cii., it was 5% in 1954. If the trend for the period of 12 years from 1945 to 1966 is maintained – and I don’t see why it shouldn’t be – then by 1978 we should attain a percentage of 27.8. On the other hand, if we assume that the trend from 9.8% in 1959 to 11.8% in 1966 is maintained, then by 1973, the ratio of revenue to GDP would be 14.3%. It will be seen, therefore, that with the type of rigorous and scientific planning; that we envisaged for the people’s republic of Nigeria, 20% for 1974/75 to 1979/80 and 15% for 1972/73 are quite realistic, in view of the trend for 1954 to 1966 and for 1959 to 1966 to which we have just referred. Column 5: The figures for oil revenue for 1970/71 – 1975/76 are projections made by some oil companies. I have set out oil revenue separately for the simple reason that its rate of growth, for the present, appears unpredictable. The indications are that, for some years to come, production of oil, and hence revenue from it, may grow by leaps and bounds. It is perhaps for this reason that the oil companies themselves have warned that the figures projected by them should be treated as tentative and conservative.

To be continued

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