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CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Public funds are meant to meet those basic needs that the government owes as an obligation to its citizenry (Corbally, 1962, Osuntokun, 2003). It is the duty of the government to take care of all the public financial expenditures, in other to aid the development of the country; of which education is one of such public expenditures. Funding of the education sector, including the human resources involved are part of public finance which the government is saddled with the responsibility of ensuring its effectiveness, as it beholds on the government to ensure the proper utilization of resources allocated to the education sector (Adesua, 1981, Charles, 2002). Therefore, funding of the education sector is an important branch of Economics of Education (Akangbou, 1986, Adeyemi, 1998). The education sector in Nigeria through the budget and planning department of the country classifies education expenditure under the social and community services sector; thereby not giving much importance to the education sector (Orubu, 1989).
Education itself is a part of both an individual and country’s life that its importance cannot be over emphasized. Education helps to shape and mould both an individual and a country at large. It is very imperative to know that for other sectors of the country to function well, education is required. Of cause, it is well known that without education there will be no competent hands to control the affairs of the other sectors of the country. In summary of the preceding sentences, education improves all other sectors of the economy (Anyanwu et al., 1999). Ola (1998: 15) once said, “If the economy of a nation moves at a very slow pace, their budget on education should be checked closely”. This is why some highly developed countries allocate about 30-35% of their annual budget to education (Aboribo, 1999:61). Some developing countries have the objective of ensuring that education is made open to all, not minding some financial constraints; most especially basic education. However, it is glaring how the education sector of Nigeria is mishandled by the government, making it a shadow of it old self; with poor or very unstable remuneration for teachers coupled with dilapidated structures and infrastructure for teaching (FRN, 2000: 52). Nigeria education system is decorated with dilapidated structures, too many students occupying a classroom, the environment is unkempt and the teachers do not attend to their duties as and when due.
Due to these, some of the schools are closed and in some cases teachers embark on strikes, thereby slowing down the pace of education development in the country.
The relevance of adequate funding of the education sector cannot be quantified. Ozigi (1977:45) argued that one of the resources an organization requires in fully achieving its aims and objectives is financial resources, as the remuneration of the staff; maintenance of the basic infrastructure of the organization requires the use of money. Several talks have been held in subsequent times to curb the problem attached to education and its funding. Why because education is a powerful tool for correcting most, if not all the vices greeting the country. Adenuga (2002), in his research revealed that little has always been allocated to meet the needs of the education sector and even the little allocated are not properly utilized. It is crystal clear that budgets on education and what is being shared from the Gross Domestic Product (GDP) has been decreasing. Between 1970 and 1998, the budgets on education were less than 25% of GDP, which did not meet UNESCOs’ minimum standard of 26% (CBN 2002). It is equally embarrassing to note that some neighboring countries like Ivory Coast and Senegal which we presume smaller than Nigeria have actually met UNESCOs’ standard. The inefficient funding of the education sector of Nigeria has affected the growth of the sector, the country’s GDP and the growth of other sectors of the economy. A closer assessment at the funding of the education sector from 1990-2015 proves that the sector is the least funded in the country’s budget. Therefore, this study is meant to examine the efficiency of education expenditure in Nigeria from 1990-2015 and make recommendations were necessary.
1.2 STATEMENT OF THE PROBLEM
The decline in the education sector of Nigeria is tied to many factors ranging from: Poor funding Misappropriation of funds Incessant strikes by teachers Non-availability of teaching materials The after-effects of the aforementioned points are not just on the teachers, both the government and the students suffer from it. When the education sector is not well funded, the teachers are not motivated to discharge their duties effectively, and this will tell from the performance of the students; as they will not be well equipped to compete with their counterparts in other countries. This draws to mind why Nigeria still produces half-baked graduates annually. However, the government is not left out as the growth of the country is threatened if the education sector is not well funded. It will affect GDP, and even discourage foreign investors. Also, the government will lose in that, a country without sound education system stands the chance of being ride by other countries with vibrant educational system.
1.3 OBJECTIVES OF THE STUDY
The major objective of this study is to examine the efficiency of education expenditure in Nigeria from 1990-2015. Other specific objectives include:
1. To determine the relationship between education expenditure and economic growth.
2. To examine the relationship between education expenditure and Nigeria’s level of illiteracy.
3. To determine the factors militating against the growth of Nigeria’s education sector.
4. To determine the advantages of proper funding of the education sector of Nigeria. 5. To identify reasons why the education sector is allocated little in the country’s budget.
1.4 RESEARCH QUESTIONS
The following research questions are generated to guide this study:
a) What is the relationship between education expenditure and economic growth?
b) Is there a relationship between education expenditure and Nigeria’s level of illiteracy?
c) What are the factors militating against the growth of Nigeria’s education sector
d) What are the advantages of proper funding of the education sector of Nigeria?
e) What are the reasons why the education sector is allocated little in the country’s budget?
1.5 RESEARCH OF HYPOTHESIS
H0 : There is no significant relationship between education expenditure and economic growth.
H1 : There is a significant relationship between education expenditure and economic growth.
1.6 SIGNIFICANCE OF THE STUDY
The importance of this study cannot be over emphasized as it concerns both the public and the government in particular. It is meant to remind the government that much have not been done to improve Nigeria’s education system, as the sector deteriorates on a daily basis. This study is therefore coming as a reminder that the government needs to pay rapt attention to the amount allocated to the education sector, ensure the sector receives it and that the fund is properly utilized. In addition, individuals on their part could assist the government in ensuring the education sector is placed on the right pedestal. This study will be of immense benefit to other researchers who intend to know more on this topic and can also be used by non-researchers to build more on their work. This study contributes to knowledge and could serve as a guide for other work or study. 
1.7 SCOPE OF THE STUDY
This study centered on the efficiency of education expenditure in Nigeria from 1990-2015.
1.8  LIMITATIONS OF THE STUDY
1. Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
2. Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.9 DEFINITION OF TERMS
EFFICIENCY: Is the (often measurable) ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, and without waste

EXPENDITURE: The action of spending funds or an amount of money spent on something.
EDUCATION EXPENDITURE: This refers to the current operating expenditures in education, including wages and salaries and excluding capital investments in buildings and equipment.
UNESCO (United Nations Educational, Scientific and Cultural Organization): It is a specialized agency of the United Nations (UN) based in Paris. Its declared purpose is to contribute to peace and security by promoting international collaboration through educational, scientific, and cultural reforms in order to increase universal respect for justice, the rule of law, and human rights along with fundamental freedom proclaimed in the United Nations Charter
GDP (GROSS DOMESTIC PRODUCT): This is the broadest quantitative measure of a nation's total economic activity. More specifically, GDP represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time.

REFERENCES
Corbally, J. E Jr. (1962) School finance, Boston: Allyn & Bacon, Inc. Osuntokun, J. (2003) “Financing higher education” Lagos: The Comet 4 (1266) Thursday, January 2, p 14
Adesua, A (1981) “Education finance in Nigeria” in Introduction to educational planning S. Adesina (ed) IleIfe, University of Ife Press, 115. 122. Charles, H. (2002) “MPs should work on better education funding” Lagos: Vanguard Education & Manpower, Thursday December 
Akangbou, S. D (1986) “A review of research in the economics of Nigerian education” Aspects of Nigerian educational research literature (ed) P. Obanya, T. Ehiametalor & S. Olaitan. Benin: Nigerian Educational Research Association University of Benin, 78-90.
Adeyemi, T. O (1998) “School and teacher variables associated with the performance of students in the senior secondary certificate examinations in Ondo State Nigeria” Unpublished PhD Thesis, University of Hull, United
Kingdom 30-38.
Orubu, C.O. 1989. “A Quantitative Analysis of Factors Influencing Federal Government Expenditure on Education”.
Abraka Journal of Education, 1: 150-162. Anyawu, J.C., A. Oyefusi, H. Oaikhenam and F.A.Dimowo 1997. Structure of the Nigeria Economy.Onitsha: Joanee Education Publishers Ola, Vincent 1998. “Education in National Development”.
Vanguard Newspaper August 2 Aboribo, R.1999. “University Funding and Development in Nigeria”, (pp.57-67) in P.C.
Egbon, and C. O.
Orubu (eds.) Critical Issues in Nigeria’s Development.
Abraka: Faculty of the Social Sciences, Delta State University. Federal Republic of Nigeria 2000.
Obansanjo’s Economic Direction 1999-2003. Abuja: Federal Government Press Ozigi, A O and Canham, P (1979) An Introduction to the foundations of education Lagos: Macmillan Nigeria Publishers Limited, 70-73.
Adenuga, A. O (2002) “Educational Experience Expenditure and Performance in Nigeria (1970-2000)”, in Human Resources Development in Africa, Proceedings of the Nigerian Economic Society Annual Conference, Ibadan, 199-222. Central Bank of Nigeria (CBN) (2002) Statistical Bulletin, Abuja CBN.

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