1.1 BACKGROUND OF THE STUDY Education funding comes from different sources. The major one for all levels of government is public revenue from taxation and proceeds from crude oil. Education funds are reported to be distributed among primary, secondary and tertiary educational levels in the proportion of 30%, 30% and 40% respectively (Balani 2003). The public funding includes direct government expenditure ( for teachers salaries and instructional materials) as well as indirect expenditure in the form of subsidies to households such as tax deductions, scholarship, loans and grants. It also includes payment for education tax fund (ETF) mainly for capital expenditures. The main sources of fund that the Nigerian government has are federal taxes and duties on petroleum, profits from imports and exports which form the revenue of the federal account and the centrally collected value added tax (VAT) introduced in 1996. The Nigerian government was able to finance education sector considerably, as a result of huge wealth generated from the sales of oil, whose discovery brought fundamental changes to the economy of Nigeria. The government of Nigeria allocated large amount of the huge wealth made from the sale of oil into expenditures in various sectors including education. Government’s ultimate objective according to NPE situation thereafter engendered indiscriminate establishment of institution and increased student enrolments to mention a few. According to Nwankwo (1992), enrolment in higher education increased from 14, 468 in 1976 to 176,700 in 1996. This pace at which education had grown in Nigeria particularly since political independence is unparallel elsewhere among African nations (Adesina 1982). 1.2 STATEMENT OF THE PROBLEM Education in Nigeria is currently in crisis. There is less money to spend on Primary, Secondary and Tertiary education. Education sector complains of under-funding while the government accuses the sector of inefficient utilization of available resources. The donors argue that public spending on education should be reduced. At the same time there are growing changes at the education level. Moreover, there are increasing complaints about poor standard of education at a period when globalization demands much from the educational system in terms of preparation of skillful labour force. There is a rampant notion which is generally felt in the Nigeria’s education sector. The incessant strikes embarked by the ASUU and NASUU, Teachers in the secondary and primary schools etc have really affected to the education sector. Owing to this, the academic calendar have been disrupted, pupils and students have stayed more than required in their studies. To the employed staff in the academic institutions, their agitations boil down to the inability by government to meet up the new salary scheme. More so, it is attributed to the poor state of the learning institutions, which the attention of the government is drawn on. These have prompted the researcher to analyze the implication of government expenditure on the Nigeria’s economic growth.

1.3 OBJECTIVE OF THE STUDYThe main objective of this research is to determine the effect of government funding on educational growth in Nigeria. Other specific objectives are as follows; (i) To examine the trend of government expenditure in Nigeria (ii) To critically identify the limitations and barriers to educational growth in Nigeria (iii) Proffering appropriate framework based on the policy recommendations made.

1.4 RESEARCH QUESTIONS This research study, thus, should be viewed as a preliminary analytical exercise designed to address basic questions about government funding on the education sector in Nigeria. These include the following:

• What is the trend of government expenditure in Nigeria?
• What are the barriers and limitation to educational growth in Nigeria?
• What educational policies must be introduced by the government to encourage rapid growth in the educational sector of Nigeria?

1.5 HYPOTHESIS OF THE STUDY The following hypotheses will be tested in the course of this study:

1. Ho:    Government expenditure has no significant effect on

educational growth in Nigeria. H1:    Government expenditure has significant effect on educational growth in Nigeria.

1. Ho:    Government expenditure has no significant effect on

economic growth in Nigeria. H1:    Government expenditure has significant effect on economic growth in Nigeria.

1.6 SIGNIFICANCE OF THE STUDY As the federal and state governments of Nigeria now faces development challenges that are key to both welfare improvements for the general population and enhancement of the education sector in particular, this study will act as a source of information on various ways of adopting effective measures of improving the education sector. It will serve as a reference point to the policy makers to adequately plan education funding.

The findings of this study will also provide an econometric basis upon which to examine the effect of government funding on educational growth in Nigeria. Hence, policy makers will be able to formulate an articulate and comprehensive policy with respect to educational management in Nigeria.  This research will also provide an objective view to the relevance of education to Nigerian economy. The findings of this research will also serve as a good resource materials for those that in tend to carry out further research on the effect of government funding on educational growth in Nigeria. It will help students and researchers to do further work related to this research project. More so, institutions of learning that may come across this research work can see the need to enhance funding of the education sector without solely depending on the government.

1.7 SCOPE OF THE STUDY The study examines the effect of government funding on the growth of education in Nigeria from 1980 - 2013.

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