Student Loan: There’s Difference Between Policy On Paper And Implementation Strategies, Says Okey Ikechukwu

In an interview with ARISE NEWS on Saturday, writer, scholar, and media professional, Professor Okey Ikechukwu commended the recent amendments made to Nigeria’s student loan bill, expressed optimism regarding the scheme and addressed critical concerns surrounding the efficacy and implications of the revisions.

Regarding the potential benefits of the bill’s amendment for Nigerian students, Ikechukwu viewed the amendments as a positive step towards enhancing accessibility to the loan scheme.

“I think it was a good thing the bill was amended. If you look at the details of the sections amended, the conclusion you immediately walk away with is that these measures are designed to make the bill more accessible to the average person. When you take away family income, you take away the need for guarantors, you find that more people not only have the chance but are likely to step forward confidently for the loan.

“The amendment is well advised, it was also a quick and commendable response to the outcry when it was initially made, and by also setting up a governance template, chances are that Nigerian youth, particularly students may have something to smile about in this regard.”

While praising the government’s intent and the improved nature of the bill compared to its predecessor, he addressed concerns about the implementation and workability of the amended bill, emphasizing the distinction between policy formulation and its execution.

He underscored the importance of effective management and execution, highlighting the need for proper governance structures and mechanisms to prevent misuse of funds and ensure transparency in beneficiary selection.

“There’s a difference between policy on paper and the processes of the administration of policy, then the implementation strategies and finally the expected outcomes. Those reservations are understandable, some of them may be justified but my sentence is that Nigerian youths and particularly students, might have something to smile about.

“We move from the intention of government to the execution of that intention. But let’s first acknowledge that the intention is good. Let’s also acknowledge that the newly signed bill is an improvement on the previous one, but let’s take it further to raise the issue you’re bringing to public attention which is the question of will this be effectively managed? Now that’s to be seen, but let’s look at experience and bring that experience forward so that the government will be better advised on the kind of gatekeeping measures it might need to keep in place.

“Since the government has in this instance put a governance template, it has a board and then a management headed by an M.D and two or three directors, it is expected and hoped that those who are now asked to warehouse these funds for Nigerian students will not be the ones who will drop a list of beneficiaries based on those they know. But the way I see it, the new paradigms are very liberal.

“The other concern I have, one of the provisions is that if you have some challenge, you can bring an affidavit asking for deferment of payment. I hope it won’t get to that point where you have an epidemic of affidavits. There must be a means of verification to accompany that provision that if you have a challenge you should indicate via an affidavit from a court of competent jurisdiction. The other point is that you don’t begin to pay back until after two years of youth service. But if after those two years you haven’t got something doing and you have indication and you bring that affidavit, it works. I think it’s a more thought through enactment than the previous one. The previous one adopted the perspective of an auditor. Whereas this one adopted the perspective of a development economist.”

Ikechukwu also gave recommendations on how to ensure that the funds for the scheme trickle down and reach the beneficiaries.

“I also think that the management of the newly established fund should begin to work how modalities will drill down. It cannot be a federal and Abuja affair. Let them try to find some kind of liaison, partnership with members of the house of assembly and national assembly too. At the end of the day Nigerians are residents in their areas, not in Abuja. That kind of drill down will be reassuring, otherwise we’ll be getting regular briefings at the federal level and it will not be a full trickle down.

“Some kind of mechanism for a full drill down would help and I think some stakeholder engagements and providing some partnership arrangements with other structures of state and even some non-state actors at three levels. At the level of spreading public awareness so that the intended beneficiaries get the actual correct information of what they need to do. At the level of institutional synergy so that various institutions of state at every opportunity, draw attention to young Nigerians to the possibilities of self development. Yes we are told it’s for tertiary education, but if you look at the details, it includes vocational skills, etcetera. That means it has a much wider spectrum than the official headlines we are seeing. All of these, I think, make it look good, but over and above all of that, I’ll repeat this distinction. The distinction between the intention of government and the outcome of that intention based on those administering it.

“We give credit for the law and the intention. We urge discretion and caution and call for strong gatekeeping measures so that the intention does not suffer shipwreck down the road.”

Ikechukwu however acknowledged the possibility that the government might find it difficult to recover the loans due to the likelihood of non-compliance and therefore suggested that the government should anticipate a certain percentage of loans falling under bad debt and implement strategies such as write-offs and incentivisation to mitigate repayment challenges.

“Yes, there’s the great likelihood of non-compliance from the angle of repayment but not total non-compliance. Which means that when you’re giving out student loans, you are bound to make a provision of a certain percentage of that loan that’s likely to fall under bad debt. Here, our own might be slightly higher. It’s for government to know how to do these things. There actually might be a time when you do some write offs, where you give conditions, some incentivisation.”

Melissa Enoch

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