Complex sentence: Government revenue was based mainly on customs dues, so grant money would grow or shrink depending on the state of the economy resulting in schools which were smaller than needed that lacked sufficient equipment and teachers who were both under-educated and underpaid.
Split into simpler sentences: Government revenue was based mainly on customs dues, so grant money would grow or shrink depending on the state of the economy. This resulted in schools which were smaller than needed and lacked sufficient equipment, and teachers who were both under-educated and underpaid.