Education
BREAKING: FG suspends implementation of 40% IGR policy due to pressure
Finally giving in to pressure, the Federal Government has stopped automatically deducting 40% of tertiary institutions’ Internally Generated Revenue (IGR).
President Bola Ahmed Tinubu issued the reversal order on Friday.
At the University of Ibadan’s (UI) 75th Founder’s Day event, Tinubu gave a speech.
As the Visitor to the University, he was represented by Tahir Mamman, the Minister of Education, who called the policy ill-timed.
“The automatic deduction policy of 40% of IGR is terminated. Given the state of our universities, now is not the ideal time for such a strategy, he said.
Information about the government’s intention to start deducting 40% automatically from domestically generated profits of federal universities and other partially supported organisations surfaced last week.
Amidst a collapsing economy and inadequate support for the country’s higher education institutions, the development is taking place, and those involved are worried about the policy’s detrimental effects.
The federal government began automatically deducting 40% of the institutions’ income generated from investments (IGR) in November, as per a leaked letter from the Revenue and Investment Department of the Office of the Accountant General of the Federation at the Federal Ministry of Finance.
Felix Ogundairo, the Director of Revenue and Investment Department, signed a letter dated October 17th, 2020, referencing R&I/2045/T/252. The letter stated that the decision, which impacts all partially funded government agencies and parastatals, including universities, is compliant with Section 62 of the Finance Act 2020.
The Finance Circular Reference Number FMFBNP/OTHERS/IGR/CRF/12/2021/, dated December 20, 2021, limits budgetary agencies and parastatals to a maximum of 50% of their gross IGR, with 100% of the remaining 50% to be remitted to the sub-recurrent account. It is crucial to emphasise that this policy of 40% auto deduction of gross IGR is in line with this circular. The message stated in part, “All statutory revenue lines, including rent on quarters, contractors’ registration fees, disposal of fixed assets, and tender fees, shall be remitted 100 percent to sub-recurrent accounts.”
Prior to the recent event, President Bola Tinubu had signed a bill creating the Students Loan Fund (SLF) into law in June, enabling Nigerians pursuing higher education to receive interest-free loans.
Subsequently, the National Assembly increased the N5.5 billion recommended by the Nigerian federal government for the education loan fund to N10 billion in the 2023 supplemental budget. The President has signed and passed the appropriations bill.
There is a relationship between the two, though, as some Nigerians believe the student loan was planned as a pretext for raising tertiary school rates.
In response to the development, the Academic Staff Union of Universities (ASUU) and its equivalent, the Colleges of Education Academic Staff Union (COEASU), have released formal statements requesting that their respective organisations be taken off the list of organisations that are required to submit forty percent of their Internally Generated Revenue to the Federal Government.
In a protest letter to the federal government, the Committee of Vice Chancellors of Nigerian Universities also demanded that the government abandon its proposal to take 40% of federal universities’ internally generated revenue.
Professor Yakubu Ochefu, the Secretary-General of the Committee of Vice-Chancellors of Nigerian Universities, stated that the government was not allowed to seek 40% of the IGR from universities in exchange for refusing to provide them autonomy.
Ochefu pointed out that any mandated deduction will eventually have an impact on parents because universities are profit-driven organisations that mostly rely on student fees.
“If you look at the Act, it stated a surplus rather than 40% IGR. Who then decides what is in excess? The Finance Act of 2020 provides clarification, and the organisation is responsible for determining whether to provide you any surplus. However, FG claims that it now wishes to take it out of the source. We have written to the Ministry of Education and voiced our objections.
“If they are adamant, it indicates that they wish to shut down the colleges. Alternatively, we will have to tack on an additional 40% to the prices we charge our end users—who are already grumbling. We instructed the Ministry of Education to stop the development by writing the Ministry of Finance. On Thursday, the letter was written.
“In the end, the parents will have to live with whatever decision is made. Schools are social institutions, not business enterprises. In the event that FG insists on a 40% deduction, parents would pay the price. It is not feasible for the government to sit down somewhere and compare colleges, universities, and polytechnics to profit centres. Insufficient funding is being provided to universities. We will offer you forty percent if you grant autonomy and we charge the standard rate,” he stated.
The Academic Staff Union of Universities, or ASUU, was shocked by the development and denounced the directive, saying it would further degrade and weaken the Nigeria University System. The ASUU had called on its members nationwide to get ready for a “indefinite strike” in response to the Nigerian government’s refusal to abide by the agreement it had made with the union.
Remember that ASUU and the federal government had been at odds over university funding last year, which prompted the union to initiate an eight-month strike.
Universities are not organisations that generate revenue, according to a statement released by ASUU National President Emmanuel Osodeke on Tuesday.
Because it affects the cost and accessibility of education in the nation, ASUU urged the government’s pertinent institutions to remove universities from the list of government Ministries, Departments, and Agencies (MDAs) that are considered to be revenue-generating centres.
“NEC examined the effects of the recent order to Federal Universities to transfer 40% of their Internally Generated Funds (IGF) to the government’s coffers. Because the instruction would further degrade and weaken the Nigeria University System, NEC rejects it in its totality.
To be clear, universities don’t make money because the mandatory tuition students pay pays for the resources that are needed to receive a proper education.
ASUU stated that “because of the implications for the affordability and accessibility of education in the country, NEC calls on the relevant institutions of the state to remove universities from this category of government Ministries, Departments and Agencies (MDAs) regarded as revenue-generating centres.”
Employees under the auspices of the Colleges of Education Academic Staff Union, or COEASU, pushed the federal government to remove the Colleges of Education from the policy requiring postsecondary educational institutions to send forty percent of their income generated from tuition to the federal government.
COEASU labelled the programme as another blow to teacher education and threatened to impose the consequences on parents should the government decide to go ahead with it.
The union bemoaned the fact that major players in the education sector were demanding more money for teacher preparation programmes as well as bursaries and scholarships for education students, and that the government was launching a policy to turn colleges of education into profit-making entities.
The union claimed in a statement released on Monday by Dr Smart Olugbeko, its national president, that the government’s latest demand would leave the Provosts with no choice but to raise student tuition in order to continue providing basic services.
The union claims that the money collected by the colleges is not IGR but rather a levy for particular services that the government was not offering. Instead, it demanded that the federal government increase its support for education colleges, seeing this as a social responsibility mandated by the constitution.
As ineffective teaching and learning will result in student unrest, COEASU stated that it expected the government to understand the implications of colleges not being able to provide security, pipe-borne water, electricity, laboratory equipment, and other pertinent recurrent maintenance costs.
A portion of the statement said, “The Federal Government’s mandate that Federal Colleges of Education submit 40% of their Internally Generated Revenues (IGR) to the Federal Treasury is noted with great misgivings by our union. The Colleges of Education receive minimal fees intended for the provision of particular services, hence there is no justification for applying this regulation to them. Put differently, IGR is not produced by Federal Colleges of Education. Service fees are what they charge for things like consumables, lab equipment, teaching methods, hostel maintenance, student identity cards, and health clinic services.
“This ruling is yet another blow to the field of teacher education. The government is implementing a plan to turn colleges of education into profit-making entities at a time when key players in the education sector are demanding more money for teacher preparation programmes and the availability of scholarships and bursaries for education students.
Parents will be responsible for the repercussions if the government follows through on this programme, and many will pull their kids out of school. We implore the federal government to exclude colleges of education from paying 40% of their IGR to the federal treasury because the money the colleges collect are not really taxes but rather fees for certain services that the government does not offer. Additionally, we demand that the federal government increase its support for education colleges because doing so is a civic responsibility mandated by the constitution.
Prior to this, ASUU President Emmanuel Osodeke had maintained that the nation’s universities are constitutionally required to receive funds from the federal government.
Osodeke responded to a statement attributed to Professor Tahir Mamman, the Minister of Education, saying that the FG would give universities complete authority to find new sources of finance for their operations.
He was speaking as a guest on Channels Television.
Because it is required by law, the Federal Government of Nigeria could not possibly claim that it will stop funding public universities. It is stated in Section 18 of the Constitution, which states that “university, primary, and secondary are free.”
I stated, “I don’t think this government, from what we have seen, is going to say we are going to hands-off from university.” The only issue is that it is not judicable. That is the only issue.
However, autonomy has arrived, having been sparked in 2003. The university system would function well if we abided by that rule and let it function without intervention from the bureaucracy, according to Osodeke.
Dr. Michael Ogbemudia, a lecturer at Chrisland University in Abeokuta, Ogun State, spoke with OBASANJO NEWS24 in an interview.
characterised the move as a regression in policy that would further erode the credibility of the country’s governmental institutions.
Ogbemudia bemoaned the state of the nation’s education system, pointing out that it is completely disorganised and that funding for postsecondary education is desperately needed.
The academic said the policy was completely unjustified, anti-people, and anti-education, and that the government ought to reevaluate its stance.
“I see a retrogressive policy that will further put our institutions into deep darkness,” the speaker declared, “because a government is coming out to declare a total war at this critical period in our national life when everybody is clamouring for a little more intervention in the state-owned institutions.”
“I said that because, as any reasonable and knowledgeable person would know, government-owned organisations are already underfunded and fighting several ills.
“And a government is coming out at this time demanding such a huge percentage of revenue to be remitted to it, at a time when many people are already calling for total autonomy for government-owned institutions.” It’s not exactly rational thought.
“I mean, what are you supposed to think of a government that never stops taking? Of fact, only a government—like the one in Nigeria—will keep looking for methods to increase pressure on and disarray postsecondary education institutions. They never stop searching for methods to irritate government-owned establishments in opposition to the requirements and desires of the entire populace.
Right now, I sincerely hope that the government will introduce a proactive reform that will adequately address the demands of the country, particularly with regard to postsecondary education.
In a system where resources are already scarce, why should they place such a demand? This hurts me because so many people are impacted by it. The knock-on effects are increasing school fees and causing individuals who are already suffering from inflation and the hard reality of our country’s economy to speak out.
“University lecturers are going on strike to demand what is right for obvious reasons. We are witnessing a decline in these institutions’ physical infrastructure as well as the state of their research and academic environments.
“But the government isn’t doing anything about it; all they care about is getting money from every industry to support their own self-serving political ambitions.” Furthermore, I don’t understand why the government should announce this at this particular moment. It is completely inappropriate at this crucial juncture in our country’s history, completely anti-people, and absolutely anti-education.
“I’m hoping the government will give this policy another look. Rather than making demands on the institutions, I believe that 40% of the financial allotment should go towards the government-owned institutions. This would allow us to build a system that is competitive with both private sector and foreign universities.
The privatisation of education is what we are actually witnessing, and this will negatively impact those who cannot afford to attend private universities.
“If the administration truly cares about the country, they will reconsider and make post-secondary education more accessible to regular people who cannot afford to attend expensive universities.
“My proposal is that we should allocate more funds to federal universities; we also need more financial investment and support, instead of taking forty percent.”
Speaking on the subject, Nduka Odo, a media and communication scholar at Peaceland University in Enugu, told OBASANJO NEWS24 that if education becomes profit-oriented, the country runs the risk of not generating the proper individuals to lead the society.
In order for the FG to profit from universities, Odoh recommended that it make significant investments in education.
“The majority of nations function as non-profit organisations in the field of education,” he stated. The goal of education is to create people with the abilities and creativity to improve society. We won’t have the appropriate individuals in charge of our society if we start looking at things differently.
In fact, several nations treat education like a business. This implies that the FG should make significant investments in universities first, just like corporations do, if they are interested in making money from them.
“Who pays the burden is the nasty aspect of the government’s plan to raise IGR by requiring colleges to pay 40% of their costs. In order to make enough money, institutions will raise tuition and other expenses.
Most people will not be able to pursue further education as a result of this. Our society will suffer as a result.
Nigerians are currently experiencing economic hardship as a result of the same government’s actions. They are now putting additional burdens on the populace inadvertently. What expenditures has the FG reduced, one wonders? Nothing at all.
Positively, collecting some money will force university officials to get up and figure out how to run the place. We may operate institutions with endowments and provide free education, as is the case in nations like Germany. This is what European nations do.
Universities should, on the other hand, pursue grants, endowments, and lucrative research and innovation. Inventions are patentable.
Second, what will the government do with the forty percent of university IGR? Will they put money back into schools? Or will it be put towards paying for spiritual travel? Will they develop industries with it?
The hardest thing about this education monetization is that the students who bear the brunt of it don’t have opportunities for employment or a supportive atmosphere in which to launch businesses.
“I believe the government is at a loss for ideas regarding how to raise money.”
