The Director-General of the Securities and Exchange Commission (SEC), Dr Emomotimi Agama, has called on private universities in Nigeria to explore capital market financing as a sustainable alternative to dependence on tuition fees for infrastructure development and long-term institutional growth.
Agama said the continued reliance on students’ fees to finance capital-intensive projects was unsustainable, warning that such a funding model could undermine the capacity of private universities to expand their facilities, improve academic standards and compete globally.
He made the call while delivering the 16th convocation lecture of Achievers University, Owo, Ondo State, titled ‘From Grants to Growth: Financing Nigeria’s Universities Through the Capital Market’.
The SEC boss described the situation as a ‘tuition trap’, arguing that universities could not achieve sustainable development if their major source of income remained annual student payments.
According to him, long-term investments in university infrastructure require equally long-term financing arrangements rather than dependence on short-term revenue from tuition fees.
‘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?’ he queried.
Agama observed that although government resources were limited and competed for by several sectors, Nigeria’s capital market offered enormous opportunities that private universities could harness to address their funding challenges.
He said the country’s pension fund industry, with assets valued at over N31.5 trillion, represented a huge pool of long-term investment resources that could be channelled into university development through appropriate financial instruments.
He identified university bonds, Sukuk and Real Estate Investment Trusts (REITs) as viable financing options, particularly for infrastructure projects, student accommodation and other income-generating assets.
The SEC director-general advised Achievers University to explore the commercial potential of its student accommodation facilities by developing them into structured investment assets capable of attracting institutional investors.
He explained that pension fund managers were interested in long-term investment opportunities, adding that universities could attract such funds through ring-fenced Special Purpose Vehicles (SPVs) designed to finance specific projects.
Agama, however, stressed that accessing the capital market would require universities to embrace transparency, maintain timely audited financial statements and establish a clear separation between institutional assets and those of their promoters.
He also described the introduction of the student loan scheme as a commendable government initiative, disclosing that there were considerations towards extending the facility to students in private universities.
Drawing from the history of Achievers University, Agama recalled that the institution was established through a private placement involving shareholders, noting that its foundation was itself an example of how the capital market could support university development.
He said the university could build on that foundation by returning to the capital market to mobilise funds for its next phase of growth.
Earlier, the Pro-Chancellor of Achievers University, Prof. Bode Ayorinde, said the institution aspired to become the best university in Africa but identified funding constraints as one of the major challenges confronting the realisation of that ambition.
Ayorinde expressed optimism that accessing the capital market would provide the institution with funds at a lower cost, ease its financial burden and ultimately reduce the pressure on students through lower tuition fees.
He added that increased student enrolment would also help reduce the cost per student, thereby improving the institution’s financial sustainability and affordability.