The Director-General of the Securities and Exchange Commission, Dr Emomotimi Agama, has urged private tertiary institutions across Nigeria to leverage capital market mechanisms as a reliable alternative to heavy tuition dependence for financing infrastructural expansion and long-term institutional growth.
Speaking at the 16th convocation lecture of Achievers University located in Owo, Ondo State, the SEC chief highlighted that relying exclusively on students' school fees for capital-intensive projects is precarious and could restrict academic competitiveness and infrastructural scaling.
What did the SEC boss term the reliance on tuition? Agama characterized the conventional funding approach as a "tuition trap," explaining that higher education institutions cannot guarantee sustainable expansion if their primary cash flow remains tied to yearly student levies. He maintained that capital projects demand long-term funding structures instead of short-term academic revenues.
"A university financed only by tuition is not self-funding. It is hand-to- mouth. Everything required to fund this university properly already exists inside the Nigerian financial system. You raised capital when it was hard. Why are you living on fees now that it is easy?" Agama remarked during his presentation titled “From Grants to Growth: Financing Nigeria’s Universities Through the Capital Market”.
How can universities leverage the capital market? The regulatory head pointed out that despite constrained government budgets, the nation's financial system holds vast potential. Specifically, the pension fund industry, boasting assets exceeding N31.5 trillion, provides an expansive pool of long-term capital that can be directed toward academic infrastructure.
Agama recommended instruments such as university bonds, Sukuk, and Real Estate Investment Trusts (REITs) as effective vehicles for funding student hostels and revenue-generating facilities. He noted that institutions could utilize Special Purpose Vehicles (SPVs) to attract institutional investors, provided they maintain rigorous corporate governance, transparency, and regular audited financial reports.
Furthermore, the SEC director-general commended the federal government's student loan initiative, hinting at ongoing discussions to make the facility accessible to undergraduates in private universities.
Echoing similar sentiments, the Pro-Chancellor of Achievers University, Prof. Bode Ayorinde, acknowledged that financial limitations remain a primary hurdle in the institution's quest for continental excellence. Ayorinde expressed hope that capital market access would lower borrowing costs, alleviate financial pressures, and ultimately make education more affordable for students through reduced tuition rates.