SEC to Universities: Stop Dependence on Govt Allocations, Access Capital Market Funding

Kemi Olaitan in IbadanNigerian universities have been urged to move away from dependence on government allocations and embrace capital formation, investment and ownership through the capital market.

The call came at the University of Ibadan Alumni Association Annual Public Service Lecture held over the weekend in Ibadan.
The lecture was themed: ‘First and Best But Whose Capital Built It? Rethinking How Nigeria Funds Its Own Future’.
Delivering the lecture, the Director-General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, traced the University of Ibadan foundation to an audacious capital decision.

Agama recalled that in 1948, the chiefs and people of Ibadan donated 2,500 acres of land to the institution on a 999-year lease.
He noted that despite producing a Nobel laureate, heads of state, central bank governors and builders of the capital market, the university had never approached the market to raise long-term funds.

“Not once. Not a bond. Not a fund. Not a listed vehicle.
“The premier University of Africa’s largest economy has been, financially speaking, a spectator at a market its own graduates built,” he said.

Agama argued that continued dependence on government appropriations was unsustainable given the country’s current fiscal realities.
He added that the university had about 41,700 students, while its halls of residence were built to accommodate fewer than 10,000, forcing thousands to live off campus.

The SEC director-general stressed that the problem was not a scarcity of capital in Nigeria but a failure to translate available capital into productive investments.
He noted that pension assets stood at N31.48 trillion as of July 2026, while total market capitalisation on the Nigerian Exchange (NGX) stood at N215.09 trillion.

Agama also contrasted the N4.65 trillion raised by banks over 24 months through recapitalisation with the N2.53 billion allocated to a university by the Tertiary Education Trust Fund (TETFund), representing a ratio of about 1,000 to one.
According to him, the figures demonstrated that long-term capital was available and that the university was seeking bankable, long-term investment opportunities.

Agama proposed five financing instruments that the university could explore under the Investments and Securities Act 2025.
He said the first was a properly constituted endowment fund registered with the SEC as a collective investment scheme, with an independent trustee, a licensed fund manager and a spending rule of four to five per cent.

The second, he said, was issuing bonds and sukuk through a ring-fenced vehicle backed by a defined, revenue-generating university asset.

Agama described student housing as the university’s most urgent opportunity, proposing a Real Estate Investment Trust (REIT) or concession arrangement to convert rent currently paid by students to private landlords into a revenue stream for the institution.
He also proposed a university innovation fund that would take equity stakes in spin-off companies emerging from its laboratories while enabling the institution to retain ownership of its research output.

The SEC director-general added that the university could explore a diaspora-targeted investment instrument using the non-resident Bank Verification Number (BVN) framework to channel part of the $21.8 billion in annual remittances from consumption into investment.

He cautioned, however, that accessing the capital market required financial discipline.
He listed the requirements to include the annual publication of audited accounts, credit ratings by registered agencies, ring-fenced revenue streams that could withstand leadership changes, and professional intermediation.

Agama urged alums to move from giving donations that were consumed to providing capital that could grow over time.
He proposed an Alumni Capital Fund with a low minimum investment threshold to enable young graduates and Nigerians in the diaspora to participate, supported by transparent governance and annual audited accounts.

In his remarks, the association’s Acting President, Prof. Terrumun Gajir, said Nigeria needed to deepen domestic investment and reduce excessive dependence on external capital.
According to him, this required mobilising pension funds, household savings and private capital for productive national development.

Earlier, the Chairman of the occasion, Bayo Oyero, said the University of Ibadan should begin investing directly in financial markets beyond its alum association’s activities.