Under the “3T2030 Plan for Greater Nigeria”, a plan to turn Nigeria’s sub-$500b GDP into $3 trillion by 2030, we will institutionalize excellence, uniting all citizens to a shared vision that is open, dynamic, prosperous and hopeful. From the lagoons of Lagos to the mangrove of Calabar, from the savanna of Yola through the plateau of Jos, to the beautiful forests of Owerri, men, women, boys and girls, will experience an unbounded optimistic future because we will serve.
We will usher in a new dawn of nationalism to enable us to achieve great success through societal energy. It will be based on substance, and fueled by visible economic roadmaps for all. Nationalism will bring our diasporas to return with money, investment ideas, global standards, networks and passion to build our nation.
At primary and secondary, education has to be FREE. But at the university level, we will provide ways to help citizens who cannot afford it. But it cannot be a “pure loan”. If you borrowed N1,000 in 1995 to attend UNN and you have to pay for it now, I am not sure you are fair to the lender. The N1,000 of 2022 is not the same as N1,000 of 1995.
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Education lending will be reformed, to track inflation plus prime set by the Central Bank of Nigeria, at least from the 4th year of the loan. Diamond Bank paid for my doctoral degree in banking & finance, and my specialty was currency. We will bring that experience into play here.
By the time we reform the student loan industry, lenders will see opportunities. Today, lending N50,000 to be paid over years makes no business sense due to inflation and currency deterioration.
Good People, you will see actionable leadership from those who understand markets. And the National Assembly will bless the plans through legislation where necessary. #believe
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Comment 1: Excellent strategy – primary and secondary school should be free of charge to attend. Post secondary should be subsidized by the state so fees for students will be lower and more manageable. Loans should be at prime (plus maybe 0.5%) with no interest accrual or repayments required while still being a student. Additionally, interest should only commence immediately upon graduation or withdrawal from school and repayments should only be required to commence after 12 months post graduation or withdrawal from school. The entire loan should be amortized over 10 years to allow for low monthly repayments but with no maximum repayment amount so the loan could be repaid as quickly as the borrower wishes…..this is the Canadian way.
My Response: I will not necessarily posit for the Canadian plan since I have to consider the cost of capital. In my plan, I assume that the bulk of the funding will not come from the federal (Nigeria does not have the funds unlike Canada). So, looking at the base cost of capital, we will create a new model.
A key component of my plan is that profits from education lending including dividends will be taxed at 25% of base. That means, government absorbs 75% tax hit to give incentives for private companies to inject funds into. There are many operational things there to make it appealing for lenders even as we ensure borrowers are protected but it has to be unique from what most countries do because Nigeria is unique.
Comment: This is interesting! However, repayment of the loans will be contingent on securing a part-time job while studying to service interest payments, and a job after graduation to repay both outstanding principal and interest. How will this repayment risk be mitigated?
Lenders may be willing to consider this risk if the current unemployment rate is first reduced to acceptable level through quantum job creation otherwise they will be creating potential toxic assets.
My Response: In America today, the biggest problem is that most companies cannot find people to hire. Nigeria produces about 600k graduates (universities, colleges of education and polytechnics) yearly, US turns out more than 4 million. If we get the Nigerian economy going, we may not even have enough graduates to hire. If you see my model, we need at least 2 million graduates in my New Rural Economy Plan within 2 years.
As Your Federal Minister, I Will Fix Nigeria’s Educational System
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