Oil Wealth, Poor Students and The NELFUND Question, By Kalu Okoronkwo
There is perhaps no more jarring illustration of Nigeria's confused understanding of educational opportunity and social investment than the widely criticised suggestion by Mrs. Oluremi Tinubu, that beneficiaries of the Federal Government's Nigerian Education Loan Fund (NELFUND) scheme, having received an opportunity to acquire education, could also "start small" by selling akara and kuli kuli to support themselves.
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On the surface, the remark may have been intended to emphasise the virtues of enterprise, resilience and self-reliance. Yet it exposes an uncomfortable irony: Nigerian students, born in a country that has earned hundreds of billions of dollars from oil and possesses vast deposits of gas and solid minerals, are being encouraged to borrow money to finance their education and, where their upkeep allowance proves inadequate, supplement it through petty trading.
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The issue is not whether there is dignity in honest enterprise. There certainly is. Nor is entrepreneurship incompatible with education. The more fundamental question is whether, in an oil producing country with enormous natural resource wealth such as Nigeria, the burden of financing higher education should increasingly fall on students who are themselves expected to become the human capital upon which the country's economic transformation depends.
NELFUND was established under the Student Loans (Access to Higher Education) Act, 2024, to address Nigeria's chronic higher-education financing gap. The scheme was conceived against the backdrop of a tertiary education system that has struggled for years with inadequate public funding, deteriorating infrastructure and rising costs, while millions of Nigerian families’ grapple with declining purchasing power.
But its existence also raises a more profound policy question: should a student loan scheme be the principal answer to an affordability crisis that is, in part, the product of inadequate public investment in education? That question becomes even more compelling when Nigeria's resource wealth and educational outcomes are compared with those of other resource-rich countries.
Nigeria's crude oil story began at Oloibiri in present-day Bayelsa State in 1958, when it was discovered in commercial quantity. What initially appeared to be another source of export earnings eventually became the dominant pillar of the national economy. Agriculture, which once dominated Nigeria's exports and provided the principal source of livelihood for the majority of the population, gradually gave way to petroleum as the country's economic bloodstream. Government revenue, foreign exchange earnings and national development plans became increasingly tied to the fortunes from crude oil.
The country is endowed with extensive deposits of natural gas, coal, iron ore, tin, limestone, gold, bitumen, lead, zinc, gypsum and other minerals. Nature, in effect, gave Nigeria several cards with which to build a prosperous and diversified economy. The tragedy is that the country has struggled to convert those natural advantages into sustained human development and good living environment.
Nigeria has spent decades extracting billions of dollars' worth of crude oil from beneath its soil, yet it is now asking young Nigerians to borrow money to acquire the education and skills needed to manage the country's resources, diversify its economy and compete in the global knowledge economy.
NELFUND is undoubtedly an important intervention. Since its launch in 2024, the scheme has expanded rapidly. By August 2026, it had reportedly disbursed more than ₦303 billion to about 850,000 students, with institutional fees paid to hundreds of tertiary institutions and eligible students receiving a monthly upkeep allowance of ₦20,000.
It would be unfair to dismiss the relief that NELFUND has provided to families who might otherwise have struggled to keep their children in school. But access to financing and affordability are not synonymous. A loan can enable a student to pay a university charge that his or her family cannot afford. It does not necessarily make that charge affordable.
If tuition and other institutional charges continue to rise while the cost of accommodation, transportation, food, textbooks, internet access and other necessities also increases, a student-loan scheme may simply be financing access to an increasingly expensive system. In other words, NELFUND may be both a solution and a symptom. It solves an immediate liquidity problem while exposing a deeper failure in the financing of Nigeria's higher-education system.
The government can rightly point to the hundreds of thousands of students who have received support. Beneficiaries can equally acknowledge the assistance, but the larger policy question remains: Why should a Nigerian student need to borrow money to obtain the education that Nigeria itself desperately needs that student to acquire?
Who should finance national human capital? Nigeria needs engineers to develop its energy sector. It needs geologists to explore and manage its mineral resources. It needs doctors and nurses to strengthen its healthcare system. It needs teachers to educate future generations. It needs scientists and researchers to create knowledge. It needs software developers, data scientists and technology entrepreneurs to participate in the global digital economy. It needs economists, lawyers, architects, agricultural scientists, technicians and countless other professionals to drive development. The educated Nigerian is therefore not merely a private beneficiary of education.
The educated Nigerian is part of the country's productive infrastructure. This is where the debate needs to move beyond the simplistic question of whether students’ loans are good or bad. Students’ loans are not inherently wrong. Many advanced education systems use combinations of loans, grants, scholarships and public subsidies. The real question is: who bears the risk, how much of the cost is borne collectively, and what protection exists for the graduate after leaving university?
If the Nigerian state benefits economically from an educated population, and it unquestionably does, then it has a legitimate responsibility to invest substantially in producing that population. Students should contribute where appropriate, but the government should not abdicate its responsibility.
Like Nigeria, Norway is an oil-producing country. But its approach to resource wealth and human development could hardly be more different. Norway's state educational-support system, Lånekassen, combines loans and grants. Under its system, a substantial portion of eligible student support can be converted into a grant when students meet specified conditions, including completing their education. Full-time student loans are also interest-free while students are studying.
The Norwegian state does not simply tell students: borrow and solve your educational problem. It constructs a wider support system around them. Students receive assistance not only because education benefits them individually, but because an educated population benefits society. That is the critical distinction between a student-loan policy and a human-capital policy. But Nigeria can learn from the principle: natural-resource wealth should be converted into durable human capital.
The experience of the Gulf oil-producing states offers another instructive comparison. Saudi Arabia, for example, has built an extensive public university system alongside government scholarship programmes that support citizens studying within and outside the country. The United Arab Emirates has similarly placed higher education at the centre of its ambition to build a competitive, knowledge-based economy and provides scholarship opportunities for its citizens.
Countries that accumulated substantial resource wealth have often recognised that the most valuable investment they can make is not simply another physical project but the development of the people capable of sustaining the economy after the resource boom. Nigeria has often struggled with precisely that transition. We have accumulated oil wealth without sufficiently transforming it into human wealth.
Perhaps nowhere is the tension between policy ambition and economic reality more visible than in NELFUND's monthly upkeep allowance. The approved allowance remains ₦20,000, a figure NELFUND reaffirmed in March 2026. Does ₦20,000 monthly allowance adequately reflect the contemporary cost of being a student in a tertiary institution in Nigeria? I don’t think so.
A student has to eat, move between accommodation and campus, may need data for internet access. There are textbooks, printing, photocopying, practical materials and other academic requirements. There are personal expenses that cannot simply be wished away. For students living away from home, accommodation can consume a substantial part of the family's income. So what does ₦20,000 actually represent in today's Nigeria? If it is intended merely as supplementary assistance, then its limitations should be acknowledged.
But if it is expected to provide meaningful upkeep support, it must be periodically reviewed against inflation and the real cost of student life on campus. A nominal figure can remain unchanged while its purchasing power steadily collapses. That is the danger of policy without adequate indexation. And this is where Senator Tinubu's akara-and kuli kuli suggestion becomes particularly relevant to the larger debate.
There is nothing inherently wrong with a student learning entrepreneurship or selling food to supplement income. But when entrepreneurial activity becomes a necessity for survival rather than an opportunity for enterprise, the policy question changes. A student should not have to become a street entrepreneur simply to remain academically functional.
The objective of public education policy should be to create the conditions in which a student can concentrate on acquiring knowledge and skills, not to normalise economic struggle as part of the university experience.
NELFUND is only an intervention and cannot be a substitute for adequate funding of the institutions those students attend. This is why NELFUND must be seen as part of a broader higher-education financing architecture rather than as the architecture itself.
The urgency of the matter is reinforced by Nigeria's human capital indicators. The World Bank's 2026 human-capital assessment puts Nigeria's education-pillar score at 64, significantly below the median of 88 for lower-middle-income countries. Tertiary completion is estimated at only 11.3 percent. The World Bank further estimates that deficits in health, education and workforce skills represent a loss equivalent to 111 percent of future labour earnings.
These are not abstract numbers; they represent lost productivity. They represent young Nigerians whose talents remain underdeveloped. They represent businesses that cannot find sufficiently skilled workers. They represent industries that depend on foreign expertise in the absence of local supply. They represent innovations that never happen. They represent economic growth that Nigeria never realises.
The country therefore does not merely have an education problem; it has a human-capital crisis. And no student-loan scheme, however well administered, can solve a crisis of that magnitude on its own. Nigeria could eventually have millions more students enrolled in tertiary institutions and still fail to produce the skilled workforce required by the 21st-century economy.
A university education is valuable not simply because a student receives a certificate. Its value lies in the knowledge, skills, critical thinking, research capacity and professional competence that the institution develops. This means that Nigeria must simultaneously address access and quality.
NELFUND principally addresses access, but government must address quality and that requires sustained investment. Education is not charity; it is economic strategy and perhaps Nigeria needs to change the language with which it discusses education. Education is too often treated as expenditure. No. Education is investment.
What should NELFUND become? The answer is not to abolish NELFUND but it should become stronger within a broader national human-capital strategy. First, the upkeep allowance should be periodically reviewed against inflation and actual student living costs. Second, the loan system should incorporate stronger income-sensitive repayment mechanisms to prevent graduates with modest incomes from being overwhelmed by debt. Third, students from the poorest households should receive a stronger grant component. Fourth, students studying disciplines considered strategically important to national development should have access to enhanced scholarships or partial loan conversion. Fifth, public universities should receive predictable and adequate funding tied to measurable improvements in teaching, research and institutional performance. Sixth, research and innovation funding should be substantially increased and finally, Nigeria should explore mechanisms through which a portion of resource revenues can be systematically converted into long-term human-capital investment.
NELFUND deserves credit for recognising a problem that had become impossible to ignore. It has brought financial assistance to hundreds of thousands of students. It has created a structured mechanism for student financing. It has also forced Nigeria to confront an uncomfortable reality: too many young Nigerians cannot afford tertiary education without assistance. But that achievement should lead to the next question. Why are so many Nigerians unable to afford an education that the country itself needs them to acquire?
Nigeria needs a national higher-education financing strategy that places NELFUND within a much larger ecosystem of public investment, grants, scholarships, institutional funding, research financing and student welfare. The loan structure should protect graduates whose earnings remain low. Successful completion in nationally strategic disciplines should attract higher grants or debt relief. Public universities should receive predictable, performance-linked funding. Research and innovation should receive greater attention. And, above all, education should be placed at the centre of the country's economic transformation strategy.
NELFUND can help Nigerian students cross the financial bridge into higher education, but the bridge cannot become the destination. If Nigeria truly wants to escape the paradox of being an oil-rich country with educationally constrained citizens, it must move from a philosophy of financing students to a philosophy of financing the future.
The ultimate test of NELFUND, therefore, should not be the number of loans disbursed or the billions of naira transferred. It should be whether, 10 or 20 years from now, Nigeria can look back and say that its oil wealth was finally converted into something more enduring than revenue: a generation of educated, skilled, innovative and economically empowered citizens. Until then, the paradox remains.
Nigeria has spent decades extracting wealth from beneath the ground while failing to invest adequately in the wealth above it, the human being.
Kalu Okoronkwo is a communications strategist, a leadership and good governance advocate dedicated to impactful societal development and can be reached via kalu.okoronkwo@gmail.com
Source: Legit.ng
