Universities decry proposed 40% IGR deduction by FG

Business a.m

The Committee of Vice Chancellors of Nigerian Universities, a group of the heads of all federal universities in Nigeria, has sent a letter of protest to the federal government, urging it to reverse its plan to deduct 40 per cent of the internally generated revenues (IGR) of the universities.

The government’s intention to begin deducting 40 per cent of the IGR starting in November as stated in a letter dated October 17, 2023 has raised serious concerns among the universities. Many have expressed concern that the deduction will severely affect their ability to provide quality education and maintain their facilities.

The committee argued that the deduction would have a significant impact on the universities’ ability to function, as the IGR is a major source of funding for various operations and activities.

According to Yakubu Ochefu, secretary general of the committee, the government’s demand for 40 per cent of university IGR is unjustified, given that universities are not autonomous and therefore cannot fully control their finances.

Ochefu pointed out that universities operate on a tight budget, relying heavily on student fees to fund their operations. He emphasised that any deduction of the IGR would ultimately be passed on to parents in the form of higher fees, which would put a further strain on families already struggling to afford education.

In his words,“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 already complaining. We told the Ministry of Education to write the Ministry of Finance to halt the development. The letter was written on Thursday.

“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 percent 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 40 percent.”

Emmanuel Osodeke, national president of the Academic Staff Union of Universities (ASUU), also expressed his opposition to the deduction, stating that the union is currently meeting to discuss the issue.

Osodeke argued that universities are not revenue-generating institutions, and any attempt to collect 40 per cent of their IGR would place undue financial burden on students and their families. He pointed out that parents are already struggling to pay the current fees, and that an additional deduction would make education even less affordable.

Osodeke questioned the government’s priorities, suggesting that its focus should be on improving funding for universities rather than collecting additional revenue. He added that the government should be investing in infrastructure and capacity building for universities, rather than placing additional financial burdens on them.