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Archives of Business Research – Vol. 11, No. 2
Publication Date: February 25, 2023
DOI:10.14738/abr.112.13976.
Adeagbo, J. O. (2023). Public-Private Partnership: Pathway to Educational Development in Nigeria. Archives of Business Research,
11(2). 112-129.
Services for Science and Education – United Kingdom
Public-Private Partnership: Pathway to Educational Development
in Nigeria
Joseph O. Adeagbo
Department of Economics, Emmanuel Alayande College of Education, Oyo
ABSTRACT
This paper has provided evidence on the impact of public and private partnership
on educational development in Nigeria, using OLS methodology in analysing the
time series data from 1980-2020 best linear unbiased estimator (BLUE). The study
found that government allocation to education in Nigeria fall below18% for past
decades. However, this can be augmented by private sector contribution to
education which is derived as the proportionate of total expenditure on education
and this form the basis for modelling the impact of public and private partnership
on educational development. It was found that the estimated value of R2 (goodness
of fit) of 0.98 or 98% shows that 98% systematic variation in Educational
Productivity is caused by variation in total labour force, unemployment rate,
inflation rate, public expenditure on education, private expenditure on education
and gross fixed capital formation. The study concludes that public participation in
financing education is not enough for effective funding of education but private
sector can also argument the expenses in order to produce skilful and economic
active labour force. Recommendation was made that there is need to increase
budgetary allocation to the educational sector and also create an enabling
environment for development of private sector which will improve educational
productivity either by funding it or by employment.
Keywords: Education, Development, Nigeria, Partnership, Public-Private
INTRODUCTION
There is a new awakening now in the global community too give quality education to the youth.
It requires the combined effort of the government and community especially in the
management of schools. It is also being increasing realized that bureaucracy due to over- centralization can be shifting to the development of schools and therefore there is a need to free
them in some aspects of management so that they can use their initiatives to deal with their
peculiar challenges. Though the idea of community participation in establishing and managing
school is not alien to the world in general and Nigeria in particular as western education
originated as a private venture (from the Christian mission) the recent development is taking
it to a partnership level in various forms, hence the charter or other countries. However, this is
not confirmed to the education sector but extended to virtually all sectors of the economy
including transport roads, electricity, communication etc. going by south African’s experience.
The idea is to make available more infrastructures for the populace through private
participation since government cannot do it all alone (cited by Colton K, 2007).
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Adeagbo, J. O. (2023). Public-Private Partnership: Pathway to Educational Development in Nigeria. Archives of Business Research, 11(2). 112-129.
URL: http://dx.doi.org/10.14738/abr.112.13976
Investment in education leads to the accumulation of human capital which is the key to
economic growth and increased incomes. It produces knowledge, skills, values and attitudes. It
is essential for civic order and citizenship and for the reduction of poverty (World Bank, 1995).
Education therefore is both a private and social investment that is shared by individuals,
students, their families, employers, government and other groups including international
agencies. In order words, the higher the level of education, the higher the productivity. This
implies that investment in education increases the production capability of individual citizens
and subsequently increase the Gross Domestic Product (GDP). Nigeria is not an exemption in
terms of the problems and imbalances that were rooted in the economic and thus the
educational system. The observed waste in public enterprise might have therefore called for
policy reforms since the late 1980s in Nigeria. In the 1980s the hydra-headed structural
Adjustment Programme (SAP) was offered to Nigeria and indeed other African countries as a
programme of economic recovery. The necessary adjustment or reforms which involves
“downsizing” liberalization of trade, “Marketisation” (commercialization), privatization and
reduction of social spending and the usual ingredients of neo-liberalization capitalism (Adedipe
N.O, 2010).
In recent times more private participation in virtually all sectors of the Nigerian economy is
being embraced. This is in line with the global trend of public-private partnership (PPP) in
financing public enterprises. The underlying assumption was that the public sector has been
efficient and there was the need to give the private sector to power the economy private
participation in the provision of educational service is also an offshoot of decentralized (or
deregulation) of education. There is no doubt that there is increasing incidence of poverty at
the household level in Nigeria. About 70% Nigerians is children/wards to schools. This is
because only 30% of families can afford to live with US$1 or daily (Abiola, 2010). The world
Bank uses references lives set at US$1 per day as Benchmark to measure extreme poverty line.
Private universities in Nigeria are only able to enroll less than 150 students, instead of their
quota of 500, per annum. In addition, the number of students per university is 6000. This is,
however, over whelming skewed in favor of the federal and to a lesser degree states
universities, where student’s enrolment per university is over 20,000. Many research works
have been emphasized on the public-private partnership towards educational development in
Nigeria at different angles without looking at the impact of public private partnership and
educational development. Therefore, this study is centered on the impact of public-private
partnership and educational development in Nigeria. The main significance of the study of the
topic “The Public-Private Partnership and Educational development in Nigeria” is to help in
maximizing the potential for expanding equitable access to schooling and for improving
education outcomes, especially for marginalized groups. This research work covers the entire
usage of some macro-economic data such as educational productivity, public sector
contribution to education, private sector contribution to education in the country. All macro- economic data are sourced from CBN statistical Bulletin, publication of National Bureau of
statistics for various years taken from 1981-2020.
LITERATURE REVIEW
Conceptual Framework
Fafunwa (1974) believes that education is the sum total of all the process by which a child or
young adult develops the abilities, attitudes and other forms of behavior which are of positive
value to the society in which he lives. It is pertinent to realize that variation in definitions of
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Services for Science and Education – United Kingdom
what education is or ought to be is not a recent phenomenon, over two thousand years ago,
Aristotle remarked “Mankind are by no means agreed about the things to be taught, whether
we look to virtue or the bests of life. Neither is it clear whether education is more concerned
with intellectual or moral virtue”. In the opinion of Ezewu (1993) two major factors are
responsible for the definitions of the concept of education. Education is often married to other
concepts such as schooling, training and so on and some philosophers defines it in terms of
these other related concepts.
Apart from being a discipline of study, education is also a transmission of the cultural heritage
of the given societies. So as the culture varies or change from one society to the other so does
the concepts change. Furthermore, according to George Hegel (1986) defined education as a
progressive perfection of humanity from a simple, uncultivated, positive state of mind toil to
the consciousness and exercise of its freedom. Akinpelu (1991) quoted by Amaele (2003)
argued that for a process to be qualified as education it must involve the following; (i) A
conscious effort to bring about a desirable change (ii) A change that is intentional deli defined
education as a progressive perfection of humanity from a simple, uncultivated, positive state of
mind toil to the consciousness and exercise of its freedom. Akinpelu (1991) quoted by Amaele
(2003) argued that for a process to be qualified as education it must involve the following; (i)
A conscious effort to bring about a desirable change (ii) A change that is intentional deliberate
and purposeful (iii) Knowledge and understanding; and (iv) A method of transmission that is
morally acceptable. Hence, however education is the process of the teaching and learning of the
child. It is about imparting skills and the acquisition of knowledge for a particular trade or
profession in which appropriate methods are applied (Kellerman, 1980). According to
Enamiror, (2007) education is a systematic Procedure for the transfer and transformation of
culture, through formal or informal training of people in a society.
Concept of Public-Private Partnership:
The term public-private Partnership (PPP) covering a wide range of process and structures; it
is often hard to define. According to (Bray 1985, Naidoo, 2005) defined public-private
partnership as a result of devotion of the centralized control of power and decision-making
from government into private initiatives at state/provincial, local government and school
levels. Public-private partnership (PPP) also involves making minimum requirements for
private participation in the provision of education (Babalola and Adedeji, 2007). More so,
Investopedia (2013) defined public-private partnership as a business relationship between a
private sector company and a government agency for the purpose of competing a project that
will serve the public. Public-private partnership means agreement between the
government/statutory entity/government owned entity on one side and a private sector entity
on the other, or the provision of public assets and/or public services, through investments
being made and/or management being undertaken by the private sector entity for a specified
period of time, where there is well defined allocation of risk between the private sector and the
public entity and the private entity receives performance standard payments that conform (or
are benchmarked) to specified and pre-determined performance standards, measureable by
the public entity or its representative (CMA Ramesh Krishman, 2013).
Furthermore, the Canadian Council (2009) for public-private partnerships has also adopted the
following definition to help clarify what is meant by this concept. A public-private partnership
is defined as “a co-operative ventures between the public and private sectors, built on the
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Adeagbo, J. O. (2023). Public-Private Partnership: Pathway to Educational Development in Nigeria. Archives of Business Research, 11(2). 112-129.
URL: http://dx.doi.org/10.14738/abr.112.13976
expertise of each partner, that best meets clearly defined public needs through the appropriate
allocation of resources, risks and reward”. Hence, however public private partnership is the
collaboration between the governments and the private sector in delivering of high quality,
effective and efficient higher education services to the people (NISER 2004). The public-private
partnership (PPP) initiative in tertiary education has been encouraging of recent. Apart from
the Education Trust Fund (ETF) into which two percent of total profit of companies are paid,
some individuals and corporate organizations have been contributing to education
development through endowment and research grants, scholarship award to students in
various disciplines and contribution towards building lecture halls, lecture theatre, hostels,
water supply and even road construction and supply of vehicles to schools.
Moreover, thus public-private partnership is seen as a significant method of promoting
developments (Agere 2000, P.68) and a tool for development (Paoletto 2000). ADBI studied
several public-private partnerships in Asia and the Pacific and defines public-partnership as
collaboration activities among invested groups and actors, based on a mutual recognition of
respective strengths and weakness, working towards common agreed objectives developed
through effective and timely communication (ADBI 2000, p.42). the world Bank definition of
public-private partnership (PPP) is closely aligned to that of the ADBI. The World Bank (1999,
p.4) defines public-private partnership in conjunction with the private, for profit and not for
profit sectors, also referred to as the government, business and civic organization.
Forms of Public-Private Partnership in Education
Seven firms of public-private partnership (PPP) in education are now highlighted. Each of these
types exhibit different characteristics in their design, different aims for the partnership as well
as roles that are played by the respective public and private partners.
Adopt-a-School Programs:
The main feature of adopt-a-school programs is that the private sector partners provide cash
and in-kind resources to complements government funding of public schools. The main aim of
the programs is that quality, access, infrastructure and community participation are improved
with the government schools. Two common features of such programs include the role of a
facilitator between the school and the adopting body and a focus on adoption of the poorest
government school. There are large examples of these programs in the Philippines and in the
Sindh Province of Pakistan.
Private Sector Philanthropy:
The main feature of private sector philanthropic initiative is to increase the amount and
effectiveness of corporate philanthropy to improve chances for poor children to gain access to
a quality education. These initiatives range from the purely philanthropic to those that have a
profit element although overching all of them is the aim to create sustainable models for
education reform in the developing world through PPPS.
Capacity-Building Programs:
The main features of these capacity-building initiatives are that the private sector partners
provide support to public schools across a range of areas such as curriculum and stative
training, textbook provision, teacher training and quality assurance.
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Outsourcing of School Management:
School management initiatives involve the public sector authorities establishing contracts
directly with private providers to operate public school or manage certain aspects of public- school operations. Although these schools are privately managed, they remain publicly owned
and funded. A common feature of these details such aspects as the performance targets,
accountabilities, timeline and arbitration procedures.
Government Purchasing Programs:
Government purchase initiatives involve contracts both in this case the government contracts
with private schools to deliver education at public expense, often in the form of a subsidy per
student enrolled in an accredited or eligible private school.
Voucher Programs:
Voucher and voucher-like initiatives also involve government funding students to attend
private schools but in this case the transaction involves a voucher that is essential a certificate
or entitlement for the parent to use to pay for the education of their children. This voucher can
be used to purchase education in either public or private school.
School Infrastructure Partnership:
School infrastructure initiatives involves the design, financing, constructing and even operating
of public-school infrastructure under long-term contracts by private sector parties in
partnership with the government. Essentially, under these infrastructure PPPs, the government
is learning a facility that has been financed, built and operated by the private operator while
the government continues to retain its responsibility for the delivery of the core educational
service provision.
Factors for Success in Public-Private Partnership (PPPs) in Education
Ultimately success for PPPs in education must be measured by the degree that the PPPS have
improved teaching and learning, provided improved facilities and introduced improved means
of management and enabled the wider community to participate in the process of education
and training. Michael Latharn (2009) further reviewed some basic factors for success in PPPs
in education, which are:
Needs:
it is important to ensure that a needs assessment is carried out that includes not just the
partnership ‘s providers but also the partnership end users. Context of further, it is necessary
for this assessment to place any PPPs within the concept of the overall National education
sector plans and for all the partners to be clear about the transaction costs that will be incurred
in maintaining their partnership.
Ownership:
Following on from the needs, it is essential to ensure that the end users are involved in the
conception, planning and implementation stages of the endeavour. In addition, there needs to
be an appropriate balance that can allow for the PPP to be directly accountable for its terms of
accountability.
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Adeagbo, J. O. (2023). Public-Private Partnership: Pathway to Educational Development in Nigeria. Archives of Business Research, 11(2). 112-129.
URL: http://dx.doi.org/10.14738/abr.112.13976
Impact:
Although it is difficult to ascribe effects of change in the education sector, it is important to
establish impact assessments on the partnerships and again to use the end users in this process
of gathering the requisite evidence of impact.
Accountability:
Unfortunately, regulation and accountability concerning partnership is still spares and weak.
But this regulatory vacuum makes it even more imperative that measures are in place to ensure
transparency regarding the management, financial structures, processes and results. A focus on
outcomes is paramount and it is important from the outset to have and results regarding these
outcomes among the stakeholders.
Adoptable Model of Public-Private Partnership (PPP)
BOT (Build-Operate-Transfer):
This model is normally suitable for PPP in new projects to develop non-moving basic
infrastructure networks such as toll roads, electric power transmission and distribution lines,
railroads, main airports and seaports etc. private investor/FDI, with or without equity
partnership in a joint venture with state owned company may develop the infrastructure. The
operation however is to be jointly performed with the licensed state company. After a number
of years as specified in the BOT- contract ownership of assists is transferred to the state
company. The joint venture company may then continue developing new projects so in effect it
operates like a developer country.
BOT (Build-Transfer-Operate):
This model is suitable for upgrading or modernization of existing now moving basic
infrastructure. The investors/FDI, with or without equity partnership in a joint-venture with
state owned company, develop the project but after completing the construction ownership of
new assets is transferred to the licensed state company and the system may be jointly operated
for a specified/unspecified period of time.
BOO (Build-own-Operate):
This model is suitable for the development and operation of the rolling stocks utilizing the non- moving basic infrastructure such as trains (railway trains), Ocean shipping lines, IPPs
(Independent Power Plants), etc. investments/FDI with or without equity partnership with
state owned company, may develop, their own and operate the system with no obligation to
transfer the assets to the state. With BOO model competition is stimulated and service quality
improved.
MDBC (Modified Design-Build Contract):
In traditional design-build (DB) contract, private contractor is engaged for a fixed-free payment
on competitions. The primary benefits of DB contracts include time and cost saving, efficient
risk sharing and improved equality. Government may consider-Turkey DB approach with the
payments linked to achievement of tangible intermediate construction milestones (instead of
lump-sum payment on completion) and short period maintenance/repair responsibilities.
Penalties/incentives for delays/early completion and performance guarantee (warranty) from
private partner may be incorporated. Subsequently, as the market sentiment turns around
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Adeagbo, J. O. (2023). Public-Private Partnership: Pathway to Educational Development in Nigeria. Archives of Business Research, 11(2). 112-129.
URL: http://dx.doi.org/10.14738/abr.112.13976
investment on education which has been impeded by high Unemployment rate, inflationary
rate and enhanced by gross fixed capital formation, the level of skilled labour force in the
country, Inflation rate is the anti-purchasing power that reduces the quality and quantity of
investment made on education in Nigeria and also rendered the impact of government and
private sector allocation insignificant.
Thus, the output equation to be estimated econometrically using time series data is presented
below:
EP = F (GFCF, PEXPEDU, PRIEXPEDU, TLBF, UE and INFRATE) (1)
Model Specification
When the equation (1) above is linearize, we have the model specified as follow:
In EP = a1 +a2lnPEXPEDU + a3lnPRIEXPEDU+ a4lnGFCF + a5lnTLBF + a6lnUE+ a7lnINFRATE +
Ut (2)
Where EP stands for Educational Productivity Proxy for educational development. The
independent variables include: GFCF is the accumulated wealth proxy by Gross Fixed Capital
formation in the economy in millions of naira per year; TLBF stands for Total labour force in
numbers of working labour force in the Nigeria, PEXPEDU is the public expenditure on
education which stands for government’s total contribution to education, PRIEXPEDU is the
private sector contribution to human capital development which stands for private expenditure
on education , UE represent the unemployment rate in the country and INFRATE which stands
for the inflation rate. Finally, Ut is the stochastic error term. ln refers to natural log of the
respective variables.
Estimation Procedure
The method of Ordinary Least Squares (OLS) is used in the model parameter estimation. The
parameter estimate obtained by OLS have some optimal properties like best, linear and
unbiasedness (BLUE) and the method has been used in a wide range of economic relationships
with fairly satisfactory results. In addition, OLS is an essential component of most other
econometric techniques. A software package known as E-view-7.2 is used in running the
regression. The ‘a prior’ expectation concerns the magnitude and signs of the parameter
estimates, whether they are positively or negatively related to gross domestic products. This
evaluation is guided by economic theory. The expected signs are: β1> 0, β2> 0, β3>0, and β4>0.
This study makes use of different procedure to ensure that the results of the regression results
are reliable. Durbin Watson d test and Breusch-Godfray tests are used to detect fitness of model.
Durbin-Watson d test is simply the ratio of sum of the squared difference in successive residuals
to the RSS. This test is used to find problem of autocorrelation in the model. To avoid some of
the drawbacks of the Durbin Watson d test of the autocorrelation, Breusch and Godfray have
constructed a test of autocorrelation that allows for: non stochastic regressors, such as the
lagged values of the regressends; and higher order auto regressive schemes such as AR1, AR2.
(Gujrati, 2004). Jarque-Bera test for the normality in residuals and White’s test are used for
heteroscedasticity.