The Nigerian Education Loan Fund (NELFUND) is seeking robust support and collaboration from the National Assembly to ensure the effective implementation and management of a new education levy. This levy, which is a component of the recently approved National Taxation Act (NTA) 2025, is designed to provide a more sustainable funding stream for the student loan scheme.
Here are the key details about this development:
The New Levy
- Nature of the Levy: The new law imposes a 4% Development Levy on the assessable profits of taxable companies in Nigeria. This levy is a consolidation of several previous taxes and levies, including the Tertiary Education Tax, IT levy, Police Trust Fund levy, and NASENI levy, streamlining the tax collection process.
- Target of the Levy: The levy is to be paid by taxable companies, with the exception of small firms, non-resident companies, and those with profits already subject to hydrocarbon tax. This measure is intended to create a steady and reliable source of income for national development projects.
- NELFUND’s Share: Under this new framework, NELFUND is specifically allocated 25% of the proceeds from this new Development Levy. This is a significant move that is expected to provide the Fund with a strong financial base to expand its mandate of providing affordable and interest-free loans to millions of Nigerian students.
Why NELFUND is Seeking Support
While the new legislation provides a dedicated funding source, NELFUND’s Managing Director, Mr. Akintunde Sawyerr, has emphasized that the success of this new funding stream depends on several key factors, which require the support of the National Assembly and other government agencies:
- Timely Appropriation: NELFUND needs the National Assembly’s support to ensure the swift and timely appropriation of its 25% allocation from the levy. Without this, the funds may not be available when needed to disburse loans to students.
- Efficient Fund Releases: Sawyerr also called for efficient releases of the funds by the Ministry of Finance and the Office of the Accountant-General of the Federation, stressing that a seamless flow of funds is critical for the scheme’s smooth operation.
- Nationwide Sensitization: NELFUND plans to launch extensive nationwide awareness campaigns to educate students, families, and institutions on how to access the loans under the new framework. The National Assembly’s support is crucial in reaching a wide audience and ensuring that the public is well-informed about the new opportunities.
Strategic Priorities for the Funds
With the new funding, NELFUND has outlined several strategic priorities:
- Expansion of Digital Platforms: The Fund plans to invest in digital infrastructure to ensure a transparent, efficient, and user-friendly application and disbursement process.
- Strengthening Partnerships: NELFUND will strengthen its partnerships with tertiary institutions to streamline the administration of the loans and the repayment process.
- Deepening Inclusivity: The fund aims to extend its outreach to underserved regions and vulnerable groups to ensure that no eligible student is left behind due to a lack of awareness or financial barriers.
This new funding structure marks a significant turning point in education financing in Nigeria, shifting away from a reliance on government budgets and creating a more stable and sustainable model for the student loan scheme.
