Official Development Assistance and the Third World’s Debt Crisis: Implication for Nigeria Educational Development, 1980–2015

Abstract

There had been calls over the years for Official Development Assistance to developing countries of the world, particularly to countries in sub-Saharan Africa. These calls hinge on the belief that the fund will resuscitate the ailing economy of the recipient countries. After channelling resources to the developing countries after almost half a century, it would appear that little development has taken place. This study, however, examined the impact of Official Development Assistance on Nigeria’s educational development during the period under review. Primary and secondary sources were put to use while thematic historical analytical approach was adopted in the interpretation and analysis of data. The study found a negative relationship between Official Development Assistance and educational development in Nigeria. In view of this, the paper recommends the reviewing or repudiation of those economic-suffocating conditionalities attached to Official Development Assistance that tend to aggravate the socio-economic conditions of recipient countries as well as the implementation of policy measures that would ensure effective and maximum utilization of Official Development Assistance.

Keywords:

• Official Development Assistance
• third world
• debt
• Educational Development
• Nigeria

PUBLIC INTEREST STATEMENT

Over the years, there have been calls for official development assistance (ODA) to developing countries in the world. This is hinged upon the belief that these funds will aid the development of the recipient’s economy. Consequently, multi-national international organizations and the developed countries of the world have given ODA to countries in sub-Saharan Africa. Decades of channeling these funds to countries in sub-Saharan Africa have not produced the desired result. This paper examined the impact of official development assistance on Nigeria’s educational development between 1980 and 2015. After analyzing available data, the study revealed that ODA has contributed to the under-development of the educational sector in Nigeria. The authors note that the development-suffocating conditions imposed on Nigeria by the ODA Agencies, as discussed in the body of this work, contribute in no small measure to making aid ineffective in Nigeria, particularly in the development of her education sector. We, therefore, recommend the expunging of these conditionalities that are inimical to the development of the economies of the recipient countries.

1. Introduction

There has been surge, in recent times, in the clamour for and the inflow of Official Development Assistance (ODA) to poor countries of the world with a view of addressing poverty, human development and infrastructural deficits among others. Official Development Assistance, popularly referred to as foreign aid, development aid or aid, consists of resource transfer, in the form of grants and loan at concessional term by official agencies of the members of the Development Assistance Committee (DAC), multilateral institutions, and Non-Development Assistance Committee countries (Ugwuede, Okafor & Akarogbe, 2016, . 156).

It is imperative to note that almost half a century of disbursing billions of dollars as Official Development Assistance to the third world countries, particularly in sub-Saharan Africa by both bilateral agencies and multilateral institutions, it would appear that its impact has not been felt much. The effectiveness of Official Development Assistance in addressing the economic problems of recipient countries, particularly, the third world countries has been a subject of debate and controversy among scholars. Consequently, result of studies on Official Development Assistance and its impacts vary; the liberal scholars have argued that ODA have had significant positive impact on the economic development of the recipient countries. They maintain that Official Development Assistance has helped in bridging the gap in savings; providing capital (fund) for government to implement developmental policies; providing foreign exchange, investment, technical input, among others, to recipient countries (Burside & Dollar, 2000; Dalgaard et al., 2004; Dowling & Hiemenz, 1982; Hansen & Tarp, 2000; Papanek, 1972). The radicals have argued otherwise; they contend that Official Development Assistance has been inimical to the economy of the recipient countries as it has created a debt crisis for the recipient countries, increased corruption and poverty, distorted domestic political economy and create dependency on the donors, amongst others (Boone, 1996; Brautigam & Knack, 2004; Knack, 2000; Mosley, 1980; Mosley et al., 1987).

The impact of Official Development Assistance to Nigeria’s economic development is not immune to this debate and controversy. Numerous studies have suggested that ODA impacts the economy of Nigeria positively, others have argued otherwise. Of relevance to this paper is the work of Mukaddas, T.M. titled: “Effect of Foreign Aid on Educational Development in Nigeria”. The author maintained that Official Development Assistance has been beneficial to Nigeria’s educational development. He noted that ODA has enabled government to improve educational infrastructure; assist the government in achieving SDG and UBE goals (Mukaddas, 2019, pp. 202–209). Similarly, Asiedu and Nandwa (2007, pp. 1–27) contend that foreign aid has enhanced primary education in Nigeria. They noted that ODA had little or no significant effect on secondary education in Nigeria. If Official Development Assistance has impacted the education and economy of Nigeria significantly, why is Nigeria characterized by high level of abject poverty, low income, high level of unemployment, dearth of infrastructure, low industrial capacity, and poor human development index, among others? Having been a major recipient of ODA, one would expect a great turn around in the economic fortune of the country. Unfortunately, this is not the case as Nigeria is still enmeshed and neck deep in socio-economic and political milieu. In the light of the above, this paper intends to study the impact of Official Development Assistance on Nigeria’s educational development between 1980–2015.

2. Official Development Assistance in Nigeria: An overview

After almost hundred years of British rule, Nigeria became independent on 1 October 1960. With independence, there was high expectation by Nigerians and her well wishers that the country’s independence will usher in an era of economic prosperity for the country and her citizens. The exportation of crude oil, cash crops and mineral resources bolstered this expectation. Unfortunately, this was not to be as the country was bedeviled with one political crisis after the other. These political crises eventually led the country into a civil war that lasted from 1967 to 1970.

Undoubtedly, the civil war had serious consequences on the socio-economic and political development of the country; it was indeed a great setback for the country. However, by the 1970s, the country’s economy began to experience a boom owing to the rise of the price of crude oil in the international market. The increasing inflow of foreign exchange into the country prompted the federal government to embark on the post civil war policy of rehabilitation, reconstruction and rejuvenation of the country. L. Nwachukwu (2004, p. 42) noted that the government ruled out development aid in reconstruction, rehabilitation and rejuvenation of the country. Instead of borrowing or seeking Official Development Aid, Nigeria was said to have loaned the World Bank the sum of $324 million (three hundred and twenty four million dollars) in 1971 (Nwachukwu, 2004, p. 42). Loaning the World Bank may not be unconnected with the fact that the country had so much fund that the leaders knew not what to do with it. No wonder, the then head of state, Gen Yakubu Gowon was quoted to have said that the problem of the Nigeria was not money but how to spend it (Nwachukwu, 2004, p. 4).

This narrative however, began to change by 1983. This was due to the crash in the price of crude oil in the international market. Since crude oil account for more than 90% of government foreign earning, the country began to experience difficulty in meeting her financial needs. This prompted the government to seek Official Development Aid (ODA) from bilateral actors and multilateral financial institutions in order to finance her developmental programmes. It is imperative to state that the administration of both President Shehu Shagari and Gen. Mohammadu Buhari refused to accept Official Development Aid from the Bretton Wood financial institutions because of the strict and unfavourable conditionalities attached to it (Dibua, 2004, p. 220). Both administrations rather embarked on economic reform; this reform however, negatively impacted the economy. L. Nwachukwu (2004, p. 194), for example, noted that as part of the reform, Gen. Buhari massively retrenched civil servants barely twelve months of his administration. Eight hundred and forty out of the two thousand civil servants sacked were university workers. The inability of the government to pay salaries coupled with the massive retrenchment of both academic and non academic staff dampened morale and fuelled instability in the education sector, particularly in the universities.

In 1985, General Buhari was overthrown in a coup d’état, General Ibrahim Badamasi Babangida was enthroned as the Head of State and Government. The government of General Babangida, amidst outcry by the Nigerian populace, accepted Official Development Aid from IMF, World Bank and other aid agencies with the strict conditionalities attached to it. Aja Kpuru Aja (2001, pp. 91–97) identified certain conditions to be met before accessing IMF and World Bank development aid. These conditions include but not limited to: evidence of economic reforms, preparedness and/or open to involve IMF/World Bank technical crew in proposing, designing and executing capital projects, devaluation of currency, wage freeze, retrenchment of workers as a cost saving measure, trade liberalization, deregulation of the economy, privatization and commercialization of public enterprises, reduction of government expenditure on social and welfare matters, removal of subsidies on certain social services and goods, among others. These conditionalities were encapsulated into Structural Adjustment Programme (SAP); the corner stone of the Babangida administration. The Structural Adjustment Programme of the General Babangida’s administration, a brainchild of the IMF and World Bank, undoubtedly negatively impacted Nigerian economy. SAP led to endemic inflation, sharp increase in unemployment rate, foreign exchange shortage, rising fiscal deficit, deterioration of the health and education sectors, among others (Anyanwu et al., 1997, p. 631).

One major consequence of government quest for and acceptance of ODA was increase in the spate of debt owned by the country. Adesola (2009, pp. 1–4) observed that Nigeria’s external debt rose from $2.2 billion in 1978 to $13.1 billion in 1982. By 2004, the country’s debt has risen to $31 billion. Of this amount, it should be noted that borrowing from the Paris Club accounted for about 73.2% of this debt while multilateral financial institutions such as IMF, World Bank, African Development Bank, IFAD and ECOWAS contributed $2.8 billion to the $31 billion (Adesola, 2009, pp. 1–4). The huge debt arising from Official Development Aid granted to Nigeria, no doubt, negatively impacted the Nigerian economy in general and the educational sector in particular. How this affected the educational sector shall be analyze below.

3. Official Development Assistance and Nigeria’s Educational Development

The period before 1980 could be described as the golden age of the Nigerian educational sector. This is attributed to the adequate funding of the sector. Eyarefe and Sanusi (2015, p. 3) noted that budgetary allocation to the education sector in the Second National Development Plan (1970–1974) was over #277.786 million. This allocation was increased to over #2.463 billion in the Third National Development Plan (1975–1980). This amounts to over 700% increment when compared to the budgetary allocation to education in the Second National Development Plan. The increase in the funding of the education sector is attributed to the increased flow of revenue from crude oil in the international market.

This narrative however, began to change by 1983 following the crashing of crude oil price in the international market. Since crude oil accounts for more than 90% of Nigeria foreign earning, the crash of oil price in the international market impacted the country’s economy severely. Uzoigwe and Effah- Attoe (2004, p. 160) noted that this also affected government funding of the educational sector, placed constraint on government investment in the educational sector as well as her ability to pay salaries of teachers. Consequently, closure of schools due to strike actions by teachers became the norm, dedication and commitment of teachers to duty and their students also plummeted. The General Buhari government did not help matters as the government resorted to massive retrenchment of civil servants, university teachers and non-academics staff inclusive. This further demoralized staff and fuelled instability in the educational sector particularly in the universities (Nwachukwu, 2004, p. 194). The perilous and unfriendly working environment in the education sector, particularly, in the universities prompted mass exodus of academics to universities all over the world, particularly to Europe and USA (Nwachukwu, 2004, p. 195). This exodus constitutes a serious drain on the manpower that was rarely adequate for the country’s education sector.

The enthronement of the General Ibrahim Babangida regime via coup d’état in 1985, and the government acceptance of the stringent and economic-suffocating conditionalities attached to the World Bank and IMF Official Development Assistance further aggravated the situation in the country’s education sector. This is because the government further removed subsidies in the sector as well as drastically reducing funding of social services such as health and education. Consequently, the education and health sectors virtually collapsed. Dibua (2004, p. 222) noted that this collapse manifested in the poor condition of service for staff, lack of facilities, infrastructural decay, among others. The conditionalities imposed by ODA agencies which were supposed to revitalize all sectors of the economy left them, particularly, the education sector in a state of comatose and decay.

While the government drastically reduced funding to the education sector in response to the conditionalities imposed by Official Development Assistance agencies, particularly, the IMF and World Bank, statistics suggest that there was geometric growth in the number of students’ enrolment in primary, post primary and universities. This position is supported by the data below:

Table

Classroom and Enrolment in Nigeria’s Primary Schools
YEAR	CLASSROOM	ENROLMENT
1989–1990	375, 726	12, 721, 087
1991–1992	377, 439	13, 776, 853
1993–1994	447, 859	15, 870, 280
Classroom and Enrolment in Nigeria’s Secondary Schools
YEAR	CLASSROOM	ENROLMENT
1989–1990	768, 192	749, 528
1991–1992	829, 303	123, 277
1993–1994	194, 693	4, 032, 083

Source: C.C. Ngwagwu (1997). The Environment of Crisis in Nigeria Educational Sector, Comparative Education, Vol. 33, No. 1 as cited in T. Moja (2000, pp. 8–18). Nigeria Education Analysis: An Analytical Synthesis of Performance and Main Issue, World Bank.

4. Number of public schools in Nigeria and enrolment 1995–2000

Table

PRIMARY SCHOOL
YEAR	NUMBER OF SCHOOLS	ENROLMENT (in Millions)
1995	36, 677	17. 99
1996	41, 660	19. 79
1997	43, 951	21. 16
1998	45, 621	22. 47
1999	47, 902	23. 71
2000	48, 860	24. 89
SECONDARY SCHOOLS
1995	6, 452	5. 08
1996	6, 646	5. 39
1997	7, 311	5. 58
1998	7, 801	5. 79
1999	8, 113	6.06
2000	8, 275	6. 36
TERTIARY INSTITUTIONS
1995	138	391, 035
1996	138	689, 619
1997	138	862, 023
1998	138	941, 329
1999	144	983, 689
2000	144	1, 032, 873

Sources: 1. Central Bank of Nigeria (1999) Annual Report & Statement of Account, p.2

2. Central Bank of Nigeria (2000) Annual Report & Statement of Account, p.130

The data above indicates that every tier of the education sector has experienced growth in students’ enrolment; enrolment in tertiary institutions rose from 391,035 in 1995 to 862,023 and 1,032,873 in 1997 and 2000. There was also significant growth in students’ enrolment in primary and secondary schools during the period under review. It is sad to note that while the country experienced significant increase in the number of students enrolment at all tiers, instead of the government to increase funding of the education sector, she unfortunately, decided to drastically reduce funding. The table below shows the dwindling government budgetary allocation to the education sector during the period under review.

5. Federal government budgetary allocation to the education sector, 1980–2013 (Allocation as % of Total Budget)

Table

YEAR	ALLOCATION %
1980	4.95
1981	6.45
1982	8.09
1983	4.04
1984	4.49
1985	3.19
1986	2.69
1987	1.93
1988	2.40
1989	3.55
1990	2.83
1991	1.09
1992	3.86
1993	5.62
1994	7.13
1995	7.20
1996	12.32
1997	17.59
1998	10.27
1999	11.12
2000	8.36
2001	7.00
2002	5.9
2003	1.83
2004	10.5
2005	9.3
2006	11.00
2007	8.09
2008	13.0
2009	6.54
2010	6.40
2011	1.69
2012	10.00
2013	8.70

Source: Central Bank of Nigeria (2013) Statistical Bulletin & Information cited in P.J. Kpolovie & I.E. Obilor, Education Funding in Nigeria: Adequacy or Inadequacy? Journal of Education in Developing Area (JEDA), Vol.21, No. 1, March 2013, p.281

Against the UNESCO recommendation of 26% of government budgetary allocation to the education sector, the highest budgetary allocation to the education sector in Nigeria from 1980–2013 was 17.59%. On the average, the federal government allocates 6.56% of its annual budget to the education sector between 1980–2013. This is a far cry from the 26% recommended by UNESCO. The Nigerian situation becomes laughable when compared to many countries in Africa. Kupoluyi (2012, p. 115) observed that Botswana allocates about 19% of her total budget to education, Lesotho 17%, South Africa 25.8%, Cote d’ Ivoire 30%, Burkinafaso 16.8 %, Ghana 31%, Kenya 23%, Uganda 27%, Tunisia 17%, Morocco 17.7%. Many of these countries are adjudged to be poorer than Nigeria. They as well have lower student enrolment than Nigeria, yet, they allocate more to education than Nigeria.

It should be noted that the factors responsible for the dwindling budgetary allocation in Nigeria are numerous; the principal factor however, is the World Bank, IMF and other ODA agencies conditionalities attached to Official Development Assistance which engendered a drastic cut in government fiscal spending on education. Other factors include dwindling oil revenue, widespread corruption by management of the educational institutions, long rule of military junta which neglected the education sector in favour of the defence sector, debt servicing occasioned by the huge debt overhang of the 1980s and 1990s which drains the available resources in the country, among others (Molokwu, 2014, p. 43).

The huge funding gap in the education sector in the face of explosive students enrolment as indicated in table above has had severe consequences on the educational development in Nigeria; it has resulted in huge shortage of teaching material, inadequate classrooms, poor learning environment, shortage of human resources, brain drain, collapse of infrastructure, inadequate infrastructure leading to over stretching of educational facilities, among others. The table below shows inadequacy of educational infrastructure, particularly in the university.

6. Demand and supply of university education in Nigeria, 2000–2007

Table

YEAR	NO OF UNIVERSITY	APPLICATION	ADMISSION	% ADMITTED	TOTAL UNPLACED
1998/1999	39	537, 226	64, 176	11%	473, 050
2002/2003	53	994, 381	51, 843	5.2 %	942, 335
2003/2004	54	1, 046, 950	105, 157	10 %	941, 793
2004/2005	56	841, 878	122, 492	14.5 %	719, 386
2005/2006	75	916, 371	N.A	N.A	N.A
2006/2007	76	806, 089	123, 626	15.3%	679, 846

Source: Okeke (2009) Access in Nigeria Education, Lead paper presented at the 23^rd Annual Conference of the Nigerian Academy of Education, held at the University of Nigeria, Nsukka.

The table above indicates that over 85% of Nigerian students seeking admission into universities are denied admission since 1998 to 2007. The situation is even worse now the proliferation of private universities notwithstanding. Those who eventually secure admission are faced with the problem of obsolete and inadequate facilities, an abnormality that characterized the Nigerian education sector. According to Okebukola (2008) educational infrastructures, such as classrooms, laboratories, and the general environment of most, if not all, of Nigerian universities are not good for optimal teaching, learning and research. It is imperative to re-echo that the increasing inability of Nigerians to access quality education in Nigeria has been attributed to inadequate funding. Ajayi and Adeniji (2009) aptly observed that virtually all problems in the Nigerian educational system, particularly, in Nigerian Universities, are linked to inadequate funding; this is so because funding has been in response to the conditionalities imposed by international financial institutions who serve as Official Development Assistance agents.

One major effect of inflow of Official Development Assistance into Nigeria is that over the years, it has made the country to accumulate huge foreign/ external debt. From a paltry sum of $2 billion debt the country owed in 1978, the country’s foreign/external debt has grown to $13.1 billion in 1982. And as at 2004, the country’s external debt stood at about $31 billion (Adesola, 2009, p. 4). The table below shows how geometric Nigeria’s debt has grown over the years.

7. Nigeria external debt indicator (1970–2001)

Table

	1970	1980	1985	1990	1995	2000	2001
Total Debt Stock $ billion	0.58	8.92	18.5	33.4	34.1	28.27	28.35
Total Debt Stock as % of Export	N.A	32.1	151.0	226.4	257.4	178.5	149.7
Total Debt Stock as % of GNP	N.A	14.6	24.0	130.7	131.7	74.0	83

Sources: Adeyemi (2011, p. 299) Financing of Education in Nigeria: An Analytical Review American Journal of Social and Management Sciences, Vol. 2(3)

The table above suggests that Nigeria’s external debt has been on the increase since 1970. From $0.58 billion in 1970 to $18.5 billion and $28. 27 billion in 1985 and 2000 respectively. By 2004, Nigeria’s external debt stood at $34 billion. Consequently, Nigeria dedicates substantial amount of resources to debt servicing yearly. Adesola (2009, p. 2) noted that debt servicing constitute a great drain on the resources of the country which would have been channelled to the resuscitation of the country’s comatose economy and education sector. It is sad to note that in spite of the increasing dwindling of government budgetary allocation to the education sector as shown in the table above, the government has continued to allocate huge resources in servicing her external debt. In the year 1999, for example, Adesola (2009, p. 2) noted that $1.9 billion was used for external debt servicing. This amount translates to four times, Federal Government budgetary allocation to education sector and twelve times budgetary allocation to the health sector. Similarly, over $2.13 billion was expended in external debt servicing in the year 2000; the amount translated to six times Federal Government allocation to education sector and seventeen times budgetary allocation to the health sector. There is no doubt that the amount expended in external debt servicing, indeed, constitutes a great drain on the scarce resources of the nation.

It is important at this point to state that the inflow of Official Development Assistance in Nigeria has somewhat benefited the education sector. Several bilateral and multilateral Official Development Assistance agencies have intervened in providing educational infrastructures and facilities such as classroom blocks, teaching materials, computers, text books, training and retraining of teachers, among others, across the country. Funds provided by ODA agencies, be it bilateral or multilateral agencies, have assisted the government at all levels in Nigeria in meeting the funding needs of the education sector.

The above notwithstanding, it will appear that the inflow of Official Development Assistance has done more harm to the development of the education sector in Nigeria than good during the period under review. The harsh conditionalities attached to Official Development Assistance such as, retrenchment of workers, wage freeze, devaluation of the country’s currency, commercialization of public enterprise, removal of subsidies on certain services such as education and health sectors, reduction of government funding of social and welfare sector, among others, has denied the education sector of adequate funding. This has resulted in the inability of educational managers in maintaining educational infrastructures, expand existing ones, pay teachers’ salaries as at when due, thus, leading to closure of schools due to strike actions by the teachers and non teaching staff in the education sector. All of these have resulted in the poor quality of school graduates in Nigeria. Okebukola (2008) rightly observed that inadequate funding has been the bane of Nigeria’s education.

8. Conclusion

This paper has examined the impact of Official Development Assistance on the educational development of Nigeria during the period under review. The paper concludes that Official Development Assistance has had severe consequences on Nigeria’s educational development during the period under review. The authors noted that the economic-unfriendly and development-suffocating conditions imposed on Nigeria by Official Development Assistance Agencies as discussed in the body of this work contribute in no small measure in making aid ineffective in Nigeria, particularly, in the development of her education sector. We therefore, recommend that Official Development Assistance agencies should expunge conditions attached to ODA which are inimical to the development of the economy of the recipient countries. This will make the aid more beneficial to the economic development of the recipients’ countries.

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No potential conflict of interest was reported by the author(s).

Additional information

Funding

The authors received no direct funding for this research.

Notes on contributors

Molokwu Ubaka Cosmas

Ubaka Cosmas Molokwu is a research scholar at the University of Nigeria, Nsukka. His research interests revolve around peace and conflict studies, gender studies in Africa, African economic and social history, globalization, and development studies. He has published widely. Some of his publications include Restructuring Nomadic Pastoralism for Food and National Security (2019), Traditional Religion, Christianity, and Gender-Based Violence among Igbo Women of Southeastern Nigeria (2020), Nigeria-Cameroon Economic Relations,1982–2014: An Appraisal (2020), International Court of Justice judgment and the Nigeria-Cameroon Economic Relations (2021), Nigeria-Cameroon Economic Relations and the Lake Chad Basin Commission (2021). The latest article submitted to your reputable journal for consideration, titled “Official Development Assistance and the Third World’s Debt Crisis: Implications for Nigeria’s Educational Development, 1980–2015,” is in line with our research interest in interrogating the dynamics of economic development in the sub-Saharan region and Nigeria in particular.