Shane O’Neill, the university’s interim principal, attributed part of the financial crisis to a sharp decline in international student enrollment and chronic underfunding in the higher education sector. However, other factors, including alleged overspending by senior staff and financial mismanagement, have also been cited as contributing to the strain.
O’Neill acknowledged that the deficit had been “lurking for quite some time” and was only recently fully understood. The University of Dundee, which contributes nearly half a billion pounds annually to the local economy and three times that amount to the UK economy, relies heavily on tuition fees, with about a third of its income coming from international students.
To address the crisis, the university has brought in external auditors to investigate its financial mismanagement and announced plans to cut over 600 jobs.
Scottish Universities Face Similar Struggles
The University of Dundee is not alone in its financial woes. Seven other Scottish universities are grappling with similar challenges. At the University of Edinburgh, staff have been warned that “nothing is off the table” as the institution seeks to close a £140 million budget gap.
The UK’s education sector, a cornerstone of its economy, began experiencing turbulence in February last year. Enroly, an online platform used to recruit international students, reported a 37% drop in applications compared to the previous year. Universities have pointed to stricter government visa rules aimed at reducing migration and the Nigerian currency crisis as key factors behind the decline.
Nigeria, which had previously supplied more students to UK universities than all EU countries combined, saw a dramatic 71% drop in student numbers. This decline has had a profound impact on universities that heavily relied on Nigerian students for revenue.
Naira Devaluation and Its Global Impact
The naira’s devaluation, initiated by Nigerian President Bola Tinubu in June 2023, was intended to attract foreign investment and stabilize the economy. However, the move backfired, causing the naira to plummet from an average of N388 to the US dollar in January 2023 to over N1600 by August 2024. Similarly, the pound sterling surged from N519 to over N2000 during the same period.
This currency crisis has made it increasingly difficult for Nigerian students to afford tuition fees abroad. Months before the financial strain became evident, some Nigerian students at Teesside University were forced to leave the UK after struggling to pay their fees. Others turned to charity organizations for support.
Education experts had warned that UK universities dependent on Nigerian students would face financial pressures due to the foreign exchange crisis. These predictions have now materialized, leaving institutions scrambling to adapt to the new reality.