Higher education remains the pivot of national development in Nigeria. This is because the stock of highly-educated individuals produced by higher education institutions plays an important role in the innovation and the sustainable development of any society. However, over time, these institutions have experienced increase in enrolments and yet the number of candidates seeking admission into these institutions outpaces the available spaces in the institutions. Inadequate fiscal resources have also eroded the desired qualitative higher education and the needed national development. In this paper, challenges facing planning and funding of qualitative higher education in Nigeria are examined. The paper therefore infers the need for proper planning of higher education system to ensure qualitative higher education so as to reduce educational wastages and enhance effective utilization of the available educational scarce resources.