Implications of Inadequate Educational Funding on Economic Development in Nigeria

Abstract

Education is widely recognized as a critical driver of national development, yet Nigeria continues to experience persistent underfunding in the sector. This study employs a content analysis research design to examine the funding patterns of education in Nigeria, integrating both federal and subnational perspectives to assess how fiscal allocations influence educational outcomes and broader development indicators. Budgetary data from federal and state governments between 2018 and 2024 were analysed to evaluate adherence to United Nations Educational, Scientific and Cultural Organisation (UNESCO)’s recommended benchmark of 15–20% of total public expenditure on education. Findings reveal that federal allocations remain below the benchmark, with the 2024 budget dedicating only 7.9% to education, while most states averaged between 4% and 10%. Significant disparities across states were observed where Ekiti, Anambra, Lagos and Edo recorded higher allocations and better educational outcomes, whereas Yobe, Zamfara, and Niger consistently underperformed. The study highlights the strong conceptual and empirical linkage between education funding and economic development, including human capital enhancement, technological innovation, and social inclusion. Inadequate and uneven funding, coupled with governance and fiscal challenges, constrains the transformative potential of education in Nigeria. Policy recommendations include increasing public investment, addressing subnational allocation inequities, improving fiscal efficiency and transparency, and aligning funding with national development priorities. The study contributes to the literature by filling a gap on inter-state disparities in education funding and their implications for sustainable development.