The Academic Staff Union of Universities and the Committee of Vice Chancellors of Nigerian Universities have strongly criticized the Federal Government’s plan to automatically deduct 40% from the Internally Generated Revenue of universities in the country, considering it an assault on the university system.
According to The PUNCH, in a letter dated October 17, 2023, titled ‘Implementation of 40% Automatic Deduction from Internally Generated Revenue of Partially-Funded Federal Government Institutions,’ the Federal Government outlined its intention to initiate this deduction starting from November 2023.
The letter was signed by the Accountant-General of the Federation, Mrs. Oluwatoyin Madein, and the Director of Revenue and Investment at the Office of the Accountant-General of the Federation, Felix Ore-ofe Ogundairo.
The policy of auto-deduction from gross IGR was stated to align with the Finance Circular bearing reference number FMFBNP/OTHERS/IGR/CRF/12/2021, issued on December 20, 2021.
Despite the government’s rationale, the National President of ASUU, Prof. Emmanuel Osodeke, expressed disappointment in the decision, contending that universities do not generate substantial revenue from the user charges and service fees imposed on students.
He found it perplexing that the government sought to collect a portion of the subsidized charges related to ID cards, hostel accommodation, lab coats, and other student expenses.
Osodeke said,“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 urged parents, students, and all Nigerians to unite against what he characterized as an assault on the universities. He also stated that ASUU would engage with the relevant Federal Government agencies responsible for the policy to determine the subsequent course 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.
The Secretary-General of the Committee of Vice-Chancellors of Nigerian Universities, Prof. Yakubu Ochefu, pointed out that the Federal Government had initially deducted 25% from universities, but this figure was recently raised to 40%.
He urged the Accountant-General of the Federation to provide a clear definition of what constituted Internally Generated Revenue, emphasizing that universities primarily receive user charges from students, rather than generating profits or substantial revenues.
Furthermore, he stressed that universities were already operating at a financial deficit, and a 40% deduction would seriously jeopardize their financial stability.
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.”
He firmly maintained that if the Federal Government intends to claim 40% of the funds generated by universities, they should ensure full and comprehensive funding for these institutions.
“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.”
