Tinubu cancels 40% deductions internally generated revenue from universities after much pressure & criticisms

In continued policy somersaults that have come to characterize his administration, President Bola Tinubu has announced the cancellation of the automatic deduction of 40 per cent from federal universities’ Internally Generated Revenue (IGR).

The Minister of Education, Tahir Mamman, conveyed the president’s decision during his speech at the 75th Founder’s Day ceremony of the University of Ibadan (UI) on Friday, November 1, 2023

In October, the Ministry of Finance notified academic institutions nationwide of its plan to automatically deduct 40 per cent from their IGR.

The Federal Government, in a letter dated October 17, 2023, titled ‘Implementation of 40% automatic deduction from internally generated revenue of partially funded federal government institutions,’ said it would begin the deduction with effect from November 2023.

The 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.

The move was widely condemned, especially by the Academic Staff Union of Universities (ASUU), and other stakeholders, who said it was ill-advised and retrogressive.

ASUU had in a statement signed by its national president, Prof. Emmanuel Osodeke, explained that universities were not revenue-generating agencies for government.

It also reminded the government that the obligatory fees paid by students were to provide the necessary tools for them to be properly educated.

Following its National Executive Meeting, ASUU, in a statement signed by Osodeke, said the decision would impoverish the already public universities.

Also, the Committee of Vice Chancellors of Nigerian Universities had written a protest letter to the Federal Government, demanding that the government rescind the plan.

The Secretary-General Committee of Vice-Chancellors of Nigerian Universities, Prof. Yakubu Ochefu, said the government could not be demanding 40 per cent of varsities IGR when it had refused to grant them autonomy.

Ochefu said should the Federal Government spurn the plea by the VCs and go ahead with the policy, parents would bear the consequences.

He explained that the Finance Act 2020 specified that 40 per cent could only be sent to the FG if there was a surplus, saying in the case of universities, there was no surplus but a lack of funding because universities only get user charges from students and not profits or revenues.

He said, “If you look at the Act, it didn’t say 40% IGR, but a surplus. So, who determines what is surplus? The Finance Act of 2020 is self-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 per cent 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.”

But in a dramatic volte-face on Friday, Tinubu conceded that the policy implementation was ill-timed.

He said: “The 40 per cent IGR automatic deduction policy stands cancelled. This is not the best time for such a policy since our universities are struggling.”