The Managing Director and Chief Executive Officer of Financial Derivatives Company Limited, Bismarck J. Rewane has asked the Federal Government led by President Bola Ahmed Tinubu to use the resources saved from eliminating fuel subsidy to fund scholarships for Nigerian students.
Rewane spoke on Thursday at a virtual roundtable discussion organised by the National Association of Proprietors of Private Schools (NAPPS) themed ‘Government Policies and Resultant Effects on Private School Administration: A Case Study of Fuel Subsidy Removal’.
President Tinubu had announced the end of the subsidy payment era in his inaugural speech upon taking office last month, noting that the 2023 budget did not allow for fuel subsidy, making continued payment unjustifiable.
The elimination of fuel subsidy, according to NAPPS, has had undeniable effects on the management of private schools; noting that fuel is an essential commodity that affects transportation costs, energy expenses, procurement of goods and services, and overall operational costs.
In his presentation, Rewane expressed that allocating funds saved from subsidy removal to scholarship programs for kids will free up cash flow for schools to operate profitably as well as money for parents to spend on health care and other items that can stimulate the economy.
The economist emphasized the importance of structuring the education sector to be more profitable rather than relying on government palliatives to lessen the impact of the subsidy removal.
“The word palliative gives sour taste in the mouth of most economists because it has been totally abused. Government should use the resources saved to provide scholarships to children and ensure that the money is paid directly. So, if the schools have the cash flow and the children have the scholarships, then, education will automatically get revolutionized.
“For instance, if I have 200 students and the government pays me ahead at the start of the year, I will have enough money to run my school, and the parents of the students will have money to do other things like pay for health and other expenses, and the economy will be better. Therefore, you should return whatever funds you have collected from the public as a result of subsidy revocation in a better way,” Rewane said.
He offered leasing as a solution to schools that run shuttle buses in response to comments made about the growing cost of transportation as a result of the subsidy elimination. “It's a new day, and we must face reality because the government won't reverse its decision to remove subsidies,” he noted.
Earlier in his opening remark, the national president of NAPPS, Chief Yomi Otubela acknowledged that the fuel subsidy removal has far-reaching implications on schools and the education sector as a whole.
He asserts that government actions have a significant impact on many facets of human life, including education, and that private schools are essential to delivering high-quality instruction and supporting the work of the state.
“As private schools heavily rely on transportation for student commutes and energy for day-to-day operations, any alteration in fuel prices inevitably affects their financial sustainability and, consequently, their ability to deliver quality education. Transportation costs have soared, cost of goods and services have increased, forcing schools to reassess their budget allocations. These, in turn, have led to potential increase in tuition fees, placing an additional burden on parents already grappling with economic challenges.
“Also, the increased cost of fuel and other resources may lead to cutbacks in infrastructure development, teacher training programs, and extracurricular activities, which are vital components of a holistic educational experience. While we acknowledge the need for the government to make difficult decisions and address economic challenges, it is imperative that we carefully consider the unintended consequences of such policies as the education sector requires special attention and support,” he said.
Otubela therefore called on government and leaders to proactively engage with education stakeholders to address the challenges they face, considering the critical role private schools play in the education ecosystem.
To cushion the effects of the subsidy removal, NAPPS appealed to government to provide school buses on lease agreement models; sponsor state and private teachers training on a termly basis; give education grants to school teachers and administrators; approve tax holiday for teachers and schools as well as open education banks to grant loans to teachers, school owners and parents at single digits.
“We must invest in sustainable solutions that mitigate the effects of rising fuel costs and support the growth and development of private schools,” he stressed, urging the schools’ administrators to adopt prudent financial management practices, explore alternative energy sources, and collaborate with each other to pool resources and expertise.
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