FG Suspends 40% IGR Deduction Policy For Tertiary Institutions

In a significant turn of events, the Federal Government has suspended the automatic deduction of 40 percent from the Internally Generated Revenue (IGR) of tertiary institutions.

President Bola Ahmed Tinubu, represented by the Minister of Education, Tahir Mamman, made the announcement during the ongoing 75th Founder’s Day ceremony of the University of Ibadan (UI).

President Tinubu described the policy as ill-timed and declared, “The 40 percent IGR automatic deduction policy stands canceled. This is not the best time for such a policy since our universities are struggling.”

The revelation of the government’s plan to implement the 40 percent automatic deduction from IGR of federal universities and partially funded institutions had sparked widespread concern and backlash, given the current economic challenges and inadequate funding of the nation’s higher education institutions.

The leaked memo from the Revenue and Investment Department of the Office of the Accountant General of the Federation in the Federal Ministry of Finance had informed the institutions of the government’s intention to deduct 40 percent of their IGR from November.

Prior to this reversal, President Bola Tinubu had signed a bill into law in June, establishing a Students Loan Fund (SLF) to provide interest-free loans to Nigerians seeking higher education. Subsequently, in the 2023 supplemental budget, the federal government proposed an allocation of N5.5 billion for the education loan fund, which was later raised to N10 billion by the National Assembly.

Concerns had been raised by some Nigerians who believed that the student loan was a precursor to increasing tertiary institution fees, leading to speculation of a potential connection between the two.

In response to the government’s initial decision, both the Academic Staff Union of Universities (ASUU) and the Colleges of Education Academic Staff Union (COEASU) issued official statements calling on the Federal Government to exempt their institutions from the 40 percent IGR deduction policy.

The Committee of Vice Chancellors of Nigerian Universities also joined the protest, writing a letter to the Federal Government, demanding the withdrawal of the plan to deduct 40 percent of the Internally Generated Revenues of federal universities.

Professor Yakubu Ochefu, Secretary-General of the Committee of Vice-Chancellors of Nigerian Universities, criticized the government for demanding 40 percent of universities’ IGR while failing to grant them autonomy. He emphasized that universities operate without surpluses, relying primarily on student fees rather than generating profits or revenues. Enforced deductions would ultimately burden parents, leading to potential fee hikes.

ASUU, which had previously embarked on an eight-month strike over funding issues, condemned the government’s directive, asserting that universities are not revenue-generating agencies and urging their removal from the category of government Ministries, Departments, and Agencies regarded as revenue-generating centers.

Meanwhile, COEASU expressed concern that the government’s policy would turn Colleges of Education into revenue-generating centers, warning that parents would bear the consequences if the policy were implemented. The union emphasized the need for increased government funding of teacher education.

In conclusion, the Federal Government’s decision to suspend the 40 percent IGR deduction policy for tertiary institutions follows widespread criticism and protests by education stakeholders. The fate of this controversial policy remains uncertain as various parties continue to advocate for their interests in the Nigerian education sector.