From Kayemo News
The federal government has begun implementation of a 40 percent automatic deduction from internally generated revenues of federal universities, Polytechnics and other partially-funded institutions.
The policy of 40 percent auto-deduction of gross IGR is in line with the Finance Circular with reference number FMFBNP/OTHERS/IGR/CRF/12/2021 dated December 20, 2021.
The circular limits the annual budgetary expenditure from IGR of the partially funded federal government.
The information was contained in a letter that was issued by the accountant-general of the federation, Mrs Oluwatoyin Madein, to the universities titled ‘Implementation of 40% automatic deduction from internally generated revenue of partially funded federal government institutions.’
The letter on implementation of the policy dated October 17, 2023 and addressed to vice-chancellors of universities was approved by the minister of Finance and coordinating minister of the economy, Wale Edun.
It was signed by the director of Revenue & Investment in the office of the Accountant-general of the Federation, Felix Ore-ofe Ogundairo.
Ogundairo said, “I am directed to inform you that the Honourable Minister of Finance and Coordinating Minister of the Economy (HMF&CME) has approved the implementation of a 40% auto deduction from the Gross Internally Generated Revenue (IGR) of all Partially Funded Federal Government Institutions in line with the Provision of Section 62 of Finance Act, 2020 with effect from November, 2023.
“Agencies/parastatals to spend not more than 50% of their gross IGR and the remittance of 100% (hundred percent) of the remaining 50% (fifty percent) to the Sub-recurrent Account. While all statutory revenue lines like Tender Fees, Contractor’s Registration Fees, Disposal of Fixed Assets, Rent on Quarters, etc shall be remitted 100% (hundred percent) to the Sub-recurrent Account.
“Consequently, all partially funded Agencies/Parastatals must align their budget requirements and ensure total compliance with the provision of Section 62 of Finance Act, 2020 and Finance Circular, 2021.”
The federal government had hinted that it was granting universities full autonomy to explore sources of financing their activities.
The minister of Education, Tahir Mamman disclosed this in Abuja. The aim is to grant full autonomy to the universities as part of the government’s effort to create new means of funding tertiary education.
Already, controversy is trailing the policy which approved 40% auto deduction from the Gross Internally Generated Revenue (IGR) of all Partially Funded Federal Government Institutions and payable into the federation account.
A letter addressed to some institutions from the office of the Accountant-general of the Federation, which was obtained by LEADERSHIP showed that the minister of Finance and coordinating minister of the Economy has approved the implementation of 40% auto deduction from the Gross IGR of all partially-funded federal government institutions.
The letter was addressed to some federal universities and other institutions across the country.
However, LEADERSHIP estimates that federal universities such as the University of Abuja, which approximately generate up to N1.4 billion yearly, will be remitting to the federation account an amount within the range of N560 million or more when the 40 percent become operational.
It would be recalled that during the review of financial records and documents by the Senate Public Accounts Committee (SPAC) in February 2022, the committee observed that the university generated the sum of N2,413,787,645.48 internally in 2016 and 2017.
Although as of the time of filing this report the authorities of the university of Abuja failed to provide us with the latest IGR of the institution when contacted, the yearly revenue generated internally in the University, according to the committee, was N1,463,097,604.13 in 2016 and N950,690,041.35 in 2017.
“How can you give loans to the students to pay their fees, collect 40% of the fees immediately from the same students through this ridiculous policy and refuse or reduce the funding of the same institutions on the basis of the fees paid by the students? This will cripple the loan scheme as the institutions will continue to suffer,” he added.
Source: Leadership
