COST ANALYSIS OF NURSING EDUCATION IN ENUGU STATE

CHAPTER ONE

INTRODUCTION

Background to the study

Cost is the value of resources (man, money, labour, tangible and intangible) used to produce goods or services. Cost analysis is an economic evaluation technique that involves systematic collection, categorization and analysis of a programme (Aduol, 2001).  It achieves cost minimization for programme under consideration with the goal of identifying the least cost method to obtain certain level of output (Bhushan, 2004). In our elementary economics, we learnt the concept of cost as the opportunity given up. Cost in education is not only the price we pay as school fees but also what was given up to earn it. It has often been said that those who consider education expensive should try ignorance, implying that ignorance is more expensive than the price we pay to earn education. Cost analysis in education provides information on the actual cost involved in producing a graduate at any level of education and gives an insight into the pattern of educational expenditure.

Ashdown &Ross (2002) revealed the important role of education in national development as education brings about economic and non economic benefits to both individual and society. Education is an economic activity involving expenditure of resources, so it is not free. It has what accountants will describe as cost of production, no matter where it is delivered. Every level of education, from kindergarten to tertiary education and seminars, has defined cost of production and where it is commercially produced, the cost of production could include a profit element for the service providers. Without going into the ideological dialectics, human beings generally desire value for money (Akpotu, 2008). Incidentally, there is a direct correlation between the cost of production of the service and the quality, all things being equal. This is often more so when the money is coming out directly from the individual’s pocket. Oladejo (2001) posited that the knowledge of concept of cost in education is an essential tool for educational manager.

In May 2002, the Federal Government issued an order forbidding the charging of tuition fees at all 24 federal universities as these universities were contemplating charging tuition fees as a cost recovery strategy. The Government believes that it has a duty to provide qualified Nigerians with free university education. Before this presidential decree, federal universities started to charge tuition fee ranging from US$ 200-400 per semester (The Higher Education Chronicle, Tuesday May 28, 2002). The Government through the National University Commission made it mandatory for all federal universities to generate 10 percent of their total yearly funds internally through various revenue diversification means (Odebiyi & Aina , 2002). This led to introduction of tuition and other fees and they continue to increase over the years.

        In schools, it is assumed that the two largest income and expenditure units are tuition and staff salaries respectively (Akangbuo, 2008). The costs associated with operating the university are continually on the rise over the years (Gibbs, 2001). This increases the cost of education but the question is ,does it increase the standard too?. Most private educational institutions in Nigeria rely solely on tuition as their main income source and they have tuition regimes that are above those of the public/government schools (Ogunlade,2009 ). Government owned schools though they are supported by government also depend on tuition to assist financially to some extent in running of schools. Government support schools financially due to the social benefit of education.

 Studies have shown that expenditure on education in developing countries is a very profitable investment and that rate of return to education are higher than for physical capital investment (Psacharopoulos & Woodhall, 2005). Akpotu (2008) opined that education should enrich an individual’s knowledge and develop his potentials (that is broaden an individual horizon). He went further to say that education helps to develop the individual’s physical, intellectual, affective and social abilities to enable him undertake specific task that will improve the welfare of the society. This was in line with Tsang (2008) who postulated that important role of education in national development is widely recognized which includes economic and non economic benefits to both individual and society.

For educational institution to meet up with the cost of running programmes, they are left with few options which affect the total cost of education: that is either escalate the number of students admitted to increase revenue to reduce the cost or keep expenditure to a minimum, which for the most part relates to two areas – staff costs, and infrastructure. Akpotu (2008) carried out a study to determine the social cost analysis of secondary education in south west Nigeria. It was discovered that teacher- student ratio has an inverse relationship with the unit cost per student, that schools with high teacher- student ratio recorded low unit cost while those with high unit cost invariably had low teacher- student ratio. It was suggested that increment of  students enrolment will enable attainment of minimum unit cost. To increase income essentially means increasing the number of students , increasing tuition fees and reducing the number and quality of staff (academic and non academic) which invariably reduces the overall educational cost – an approach that has only one possible outcome, reduced quality (Ostwald & Willams, 2007).

              The cost of nursing education ranges from fairly inexpensive to moderately expensive programme depending on the type of school (Chan & Wong 1999). What is considered as cost in education includes institutional cost (which includes fixed cost and variable cost) and individual or private cost (which are fee and non-fee cost). For institutions to meet up with the standard of nursing education in Nigeria and prevent them from loosing accreditation, maintenance of educational standard requires a specific cost attached to it. Hence, this led to this study of cost analysis of nursing education in nursing institutions in Enugu state.   

Statement of Problem

Interest in cost analyses has accompanied concerns about rising costs of education in Nigeria (Babalola 1998). This interest is reflected in considerable measures to reduce costs while maintaining quality which most educational administrators encounter. The rising cost of education in Nigeria has been a great concern to institutions, students, parents, guardians and sponsors. Cost analysis has become an important educational decision-making tool in recent years as educators  are being asked to do more with less funding and provide tangible evidence of effectiveness of educational programme (Longe, 2009). Most schools are understaffed such that they find it difficult to manage their students due to poor planning on the number of staff needed to manage a large number of students they admit (Olweny,2010). Admission of large number of students means more revenue for schools not minding the implication on structure and personnel they may require (high teacher- student ratio). This has a negative effect on the quality of students they produce as employers are already complaining unemployable graduates.

Some students drop out of school due to financial difficulties because they are not aware of the financial implication of the educational programme. While some students prolong their programme because they continue to source for money for school fees and their upkeep thereby missing classes and not concentrating in their studies. The result of these includes incurring of more cost as they end up staying more years than the required educational period and graduating with poor grades.

Nursing and Midwifery Council of Nigeria (2012) reported that 2012 general accreditation in basic School of Nursing, Post Basic Schools and department of Nursing Sciences of universities, it was observed that in Enugu state that three (3) out of the four basic nursing training institutions met their criteria and were given full accreditation to admit students School of Nursing Enugu State University Teaching Hospital had their accreditation withdrawn due to poor state of their institution. Amongst the reasons of withdrawal of the accreditation include :-