…as ASUU, Committee of VCs fault Policy
The Federal government has begun implementation of a 40 percent automatic deduction from internally generated revenues of federal universities and other partially-funded institutions.
The policy of 40 percent auto-deduction of gross IGR is in line with the Finance Circular with reference number FMFBNP/OTHERS/IGR/CRF/12/2021 dated December 20, 2021.
The circular limits the annual budgetary expenditure from IGR of the partially funded federal government.
The information was contained in a letter that was issued by the accountant-general of the federation, Mrs Oluwatoyin Madein, to the universities titled ‘Implementation of 40% automatic deduction from internally generated revenue of partially funded federal government institutions.’
The letter on implementation of the policy dated October 17, 2023 and addressed to vice-chancellors of universities was approved by the minister of Finance and coordinating minister of the economy, Wale Edun.
It was signed by the director of Revenue & Investment in the office of the Accountant-general of the Federation, Felix Ore-ofe Ogundairo.
Ogundairo said, “I am directed to inform you that the Honourable Minister of Finance and Coordinating Minister of the Economy (HMF&CME) has approved the implementation of a 40% auto deduction from the Gross Internally Generated Revenue (IGR) of all Partially Funded Federal Government Institutions in line with the Provision of Section 62 of Finance Act, 2020 with effect from November, 2023.
“Agencies/parastatals to not more than 50% of their gross IGR and the remittance of 100% (hundred percent) of the remaining 50% (fifty percent) to the Sub-recurrent Account. While all statutory revenue lines like Tender Fees, Contractor’s Registration Fees, Disposal of Fixed Assets, Rent on Quarters, etc shall be remitted 100% (hundred percent) to the Sub-recurrent Account.
“Consequently, all partially funded Agencies/Parastatals must align their budget requirements and ensure total compliance with the provision of Section 62 of Finance Act, 2020 and Finance Circular, 2021.”
The federal government had hinted that it was granting universities full autonomy to explore sources of financing their activities.
The minister of Education, Tahir Mamman disclosed this in Abuja. The aim is to grant full autonomy to the universities as part of the government’s effort to create new means of funding tertiary education.
Already, controversy is trailing the policy as the Academic Staff Union of Universities , ASUU, and the Committee of Vice Chancellors of Nigerian Universities have described the plan by the Federal Government to automatically deduct 40 per cent from the Internally Generated Revenue of universities in the country as an attack on the university system.
The National President, ASUU, Prof. Emmanuel Osodeke, insisted that FG’s decision was disheartening, saying universities were not generating any revenue from the user chargers/service fees they gave students.
He argued that it was surprising that the government still wanted to collect from the subsidised charges on ID cards, hostel accommodation, lab coats, etc, of students.
“This is what we saw when we were fighting that the government should fund universities and Nigerians think ASUU is the problem.
“Universities are not revenue-generating agencies, so the 40 per cent of the subsidised money students pay for a hostel, medicals, ID cards, lab coat, chemicals in the laboratory should still be shared with the government?
“This is an extreme, that such is happening in Nigeria.. Will the Presidency ask the NASS, NNPC, to give a return of 40 per cent?”
Osodeke called on parents, students and Nigerians as a whole to rise against what he described as an attack against the universities, adding that ASUU would also meet with the Federal Government agencies in charge of the policy to take the next line of action.
He said, “Parents, students, Nigerians need to rise up to this. This is an attack on universities. Universities are already paying taxes. They pay withholding taxes and it goes to government. There is nothing like IGR in universities. What we have are charges.
“We need to know the 40 per cent of what they want to collect from universities. They are even saying lecturers should pay them accommodation fees too.
“They want 100 per cent of what they pay as accommodation. It is sad. Give us some time to interact with the government,” Osodeke said.
On his part, the Secretary-General, Committee of Vice-Chancellors of Nigerian Universities, Prof. Yakubu Ochefu, revealed that the amount deducted by the FG from universities was 25 per cent but was increased to 40 per cent recently.
He called on the AGF to specify what it meant by IGR, saying universities only get user charges from students and not profits or revenues.
He added that universities were being run in deficit already, arguing that a deduction of 40 per cent would completely run the universities down.
Ochefu said, “The Federal Government, through the Accountant General of the Federation, is citing the Finance Act of 2021 as the basis for the decision.
“We also have to look at the provision of the law. It says that it is when you have surplus in terms of your Internally Generated Revenue, that is when you can make the return to the government. But many universities don’t have IGR, because most universities charge students’ fees as user charges. Paying N2,000 for an ID card, which has already been subsidised by the university; they pay health insurance, sports, ICT, accommodation, these are all the charges that come together and universities must provide all these for their students.
“If a user charge is considered as IGR, then we have a problem with the nomenclature. The accountant general should clearly specify what he was referring to as IGR.
“If it is all these subsidised charges that the government wants to collect 40 per cent, then the universities will lead towards financial catastrophe.
“We will open our books to the world to let them know that this is how much we get in terms of user charges. Universities are being run in deficit and FG still wants to collect 40 per cent; that means you want the universities to run down.”
Meanwhile, he insisted that if Federal Government wished to collect 40 per cent of what universities generate, they should fund the universities fully.
“If this happens, the financial challenges of the universities will get worse because the university is not a profit-making institution, it is not a revenue-generating entity. It is a service-providing entity.”
He also said the committee of VCs would consult with the Ministry of Education, accountant general and others.
