Business
40% IGR: Matters arising as Tinubu bows to varsity VCs
Adebayo Obajemu
Following widespread condemnation of the policy of automatic deduction of 40 per cent from the internally generated revenues of federal universities, President Bola Tinubu last Friday announced the cancellation of the policy. According to him, the policy implementation is ill-timed.
President Tinubu spoke on Friday at an ongoing 75th Founder’s Day ceremony of the University of Ibadan (UI). He was represented by the Minister of Education, Prof. Tahir Mamman.
In his speech as the Visitor to the university, Mr Tinubu pledged his commitment to the reform of the nation’s education sector as the bedrock for national development.
“The 40 per cent IGR automatic deduction policy stands cancelled. This is not the best time for such policy since our universities are struggling.”
Sources at the event, including the Lagos Zonal Coordinator of the Academic Staff Union of Universities (ASUU), Adelaja Odukoya, a Professor of Political Science and Dean of the Faculty of Social Sciences at the University of Lagos, hailed the action.
The Sultan of Sokoto, Sir Abubakar Sa’ad, who is Chancellor of the university, had at the event condemned policy in his welcome address.
Recall that a leaked memo two weeks ago, from the office of the Accountant General of the Federation, addressed to the heads of the universities recently stated that beginning from November, universities will have 40 per cent of revenues generated internally and deposited in their accounts deducted automatically by the government via the Treasury Single Accounts (TSA).
The proposed deduction was contained in a memo sent by the Revenue and Investment Department of the Office of the Accountant General of the Federation in the Federal Ministry of Finance, notified the institutions of automatic deduction of 40 per cent of its IGR by the government.
In a letter dated October 17, 2023, titled ‘Implementation of 40% automatic deduction from internally generated revenue of partially funded federal government institutions,’ the government said it would begin the deduction with effect from November 2023.
The controversial letter signed by the Accountant-General of the Federation, Mrs Oluwatoyin Madein, Director of Revenue and Investment, Office of the Accountant-General of the Federation, Felix Ore-ofe Ogundairo, said the auto-deduction policy of gross IGR was in line with the Finance Circular with reference number FMFBNP/OTHERS/IGR/CRF/12/2021 dated December 20, 2021.
When the issue became public, it drew the ire of many Nigerians, academics , commentators and the stakeholders themselves, including vice chancellors of universities and ASUU among others.
Last week, the Committee of Vice Chancellors wrote to the government rejecting the deductions. In the said protest letter, they demanded that the government rescind the plan to deduct 40 percent of the Internally Generated Revenues of federal universities.
The Secretary-General of Committee of Vice-Chancellors of Nigerian Universities, Prof. Yakubu Ochefu, who disclosed this, stated that government could not be demanding 40 per cent of varsities IGR when it had refused to grant them autonomy.
Ochefu, last week told that should the Federal Government refuse to listen to the plea by the VCs and goes ahead with the policy, parents would bear the consequences.
He noted that the Finance Act 2020 specified that 40 percent could only be sent to the FG only in the event of a surplus, adding that in the case of universities, their internally generated revenue was not even enough not to talk of surplus but a lack of funding because universities only get user charges from students and not profits or revenues.
He averred that, “If you look at the Act, it didn’t say 40% IGR, but surplus. So, who determines what is surplus? The Finance Act of 2020 is explanatory and it is the institution that is supposed to decide and send you the surplus if there is any. But FG says it now wants to deduct it from the source.
“We have protested, and written to the Ministry of Education. If they insist, it means they want to ground the universities to a halt. Or we will be forced to add the 40 percent to what we are charging the end users and these end users are complaining already. We told the Ministry of Education to write the Ministry of Finance to halt the development. The letter was written on Thursday.”
He further stated that, “Ultimately, any decision taken, it is the parents that will bear it. Schools are not commercial activities; they are social entities. Parents will bear it if FG insists on a 40 per cent deduction. For the government to sit down somewhere and equate universities, colleges, and polytechnics as revenue centres, that isn’t possible. They are not funding universities well enough. If you grant autonomy and we are charging the normal rate then we will give you the 40 percent.”
Reacting to the strange development, the National President, Academic Staff Union of Universities, Prof. Emmanuel Osodeke, said, “As a union, we are in a meeting to take a decision. They are not supposed to deduct anything from anyone. The university is not generating revenue, this means you want to give students loans and you want to go back to the universities to collect it as 40% IGR.
“These are universities that are not properly funded. Parents are complaining that they can’t pay the current fees, yet you want to collect 40 percent of the little universities earn.”
Many Nigerians are worried that developments recently in the life of the current administration portends danger to tertiary education. They say the astronomical hike in tuition and other fees show that the Tinubu administration may be itching for the kill, saying there are enough crises in the universities, which they attribute to the current administration’s harsh policies that are hostile to the common man.
It would be recalled that some universities have had their tuition fees hiked leading to a spiral of protests across many high institutions.
ASUU has ever since the memo became public repeatedly scowled at the development.
Osodeke further said his union could not understand what the government meant by IGR in the universities. He said universities globally are not revenue-generating institutions, but that what they generate are only costs of services rendered and items provided for students.
Osodeke, a professor, who described the new policy, as the government’s attempt to “strangle the poor”, said there is no revenue generated by any university.
“What is IGR? As far as I’m concerned, we don’t have IGR. So, it’s zero. What the students are paying is the cost of items like ID cards, medical health insurance, books, lab coats, among others. So there’s no IGR in universities. So, it’s zero. You see, this is what we have been talking about. Is the university an agency established to generate funds for the government?
“So, as far as I’m concerned, we will look at it. Let them define what is the idea of IGR. As far as ASUU is concerned, the funds are meant for items and that’s why we call them charges.”
According to him, many universities receive less than 120 million annually from the federal government as funding support but that they spend more than N1 billion annually on electricity alone.
“If you talk to the management of the University of Ibadan, or OAU, or any other one, they will tell you they only get roughly N15 million a month from the government to run. Will that be able to pay for electricity bills? So, it’s so sad what we’re hearing today. This is an attack on the university system and I then pray that something will happen and change this narrative. “How can you say you’re going to collect these charges that the universities collect to take care of their students? Things like this never even happened during the military. If their children are in these public universities, would they ask for such a thing?”
Toeing ASUU’s line, the National President of SSANU, Mohammed Ibrahim, who had spent about 30 years within the university system, said he never knew anything called IGR in the universities.
He bluntly stated that the stand of his union is to fight it to standstill, adding that an attack on education from any quarters is an attack on the nation’s development.
Mr Ibrahim said his union “opposed such decisions yesterday, still opposing it today and will oppose it tomorrow or any day.”
According to him, “education is a social service for goodness sake! Universities are institutions of learning, where teaching, research and community development activities are carried out. Outside all these, anything a university does is outside its mandate. Therefore, there is nothing called IGR in the university in the first place.”
On his own, the National President of the newly registered Congress of Nigerian Universities’ Academics (CONUA), Niyi Sunmonu, said the universities already have so much to contend with and suggested that the policy should be rejected.
“Our position is that universities in this country are already having a lot to deal with, with respect to funding issues. Effecting this policy this time that the universities are yet to achieve financial stability will cripple them,” Mr Sunmonu, a senior lecturer at Obafemi Awolowo University (OAU), Ile-Ife, said.
A social commentator and university don based in Atlanta, Georgia in U.S, Prof. Farooq Kperogi wrote last week in his reaction to the memo:
“President Bola Ahmed Tinubu is really having a ball—at the expense of the rest of Nigeria. He has become so comfortable in his presidential self-indulgence that he now wants to wring water from stones and deposit it into an ocean. Our stone-broke universities are the stones. The presidency is the ocean to which Tinubu wants to pour the water he wants to extract from stones.
“It wasn’t enough that he signed a N2.176 trillion Supplementary Appropriation Act on Wednesday in Abuja mostly to fund decadent presidential pleasures, such as $38 million for the presidential air fleet, $6.1 million for a presidential yacht, and even more millions of dollars for presidential “repairs,” presidential feeding, foreign SUVs for the First Lady’s office and for legislators, etc.
“Now, he wants struggling, cash-strapped federal universities that are barely surviving to turn over 40 percent of all their internally generated revenue to the federal coffers to fund more presidential sybaritism and elite indulgence. I didn’t believe it when someone first called my attention to it.
Professor Adeagbo Moritiwon, a political scientist, told Business Hallmark that “the memo is not only strange if you put it in context of what this administration has had as policy for education, especially tertiary education, you will agree with me that there’s an agenda to close the university system and turn the students into social miscreants. That’s the only explanation that explains this surreal development.”
On his own, Professor Usman Yusuf, a historian said “It’s quiet difficult to imagine that a government can just wake up one morning and demands 40 percent IGR when it has not been properly funding universities and it’s the same inadequate IGR that the universities use to maintain semblance of academic activities, meet students’ needs and other things. It’s shocking. This must not be allowed to stand .
Also John Ibekwe, a lawyer said “This administration is making it difficult to go to school. If this is allowed to fly the burden will be on parents, who are already grappling with increase in tuition and other fees. It’s sheer insensitivity.”
