• Friday, December 08, 2023
businessday logo


40% deduction from varsities’ IGR will make education unaffordable — Stakeholders

40% deduction from varsities’ IGR will make education unaffordable — Stakeholders

Stakeholders have expressed concerns about that the 40 percent deduction from the internally generated revenue (IGR) of federal universities being demanded by the Federal Government.

Recall that the government in a letter dated October 17, 2023, titled ‘implementation of 40% automatic deduction from IGR of partially funded federal institutions’, said it would begin the deduction with effect from November 2023.

The stakeholders say the development will take education out of the reach of indigent students, amid skyrocketing overhead costs of running the universities.

Read also: ‘We are focusing on creating a platform to improve STEM education in Nigeria’

Stanley Boroh, a lecturer at the Federal University, Otuoke in Bayelsa State, in a chat with BusinessDay, said 40 percent from the IGR of the universities will lead to further fee hikes in many of the universities.

“The universities are crying as it stands because already the Council of Independent Colleges (CIC) taking money from universities was affecting the system, not to mention the Federal Government deducting 40 percent.

Most universities have increased their fees and going forward they will increase further and this will affect students and parents seriously,” he said.

Ifeanyi Abada, a senior lecturer and the chapter chairman of the Academic Staff Union of Universities (ASUU) at the University of Nigeria, Nsukka, said this will definitely lead to heightened costs of running the universities.

“Where will the universities get the 40 percent in the first place? This will further escalate the cost of goods and services borne by students.

If universities are charging N5000 for transcripts, they might now charge about N50,000; if universities are charging N30,000 for examinations, they might now begin to charge N80,000,” he said.

Friday Erhabor, a parent with children in the university, called on the universities to be more creative in order to raise enough funds to meet their daily overhead costs.

“I have always advocated that universities must be creative with revenue generation beyond fee hikes. There are a lot of idle capacities in the universities that have not been explored,” he said.

Erhabor wondered why the electrical engineering departments in many universities were not exploring green energy to generate revenue. “Fintech is becoming a cash cow sector. Why are ICT and computer departments not exploring commercialisation in that sector?

Read also: University of Sheffield woos Nigerian students for UK education

Why must they just be looking at the direction of school fees each time revenue is discussed?” he queried.

He counselled the Federal Government to give public universities a timeframe to begin to commercialise their departments.

“Any department that cannot offer commercial services that will constitute at least 60 percent of their revenue should be shut down,” he noted.

Yakubu Ochefu, secretary-general of the Committee of Vice Chancellors of Nigerian Universities, had earlier condemned the decision of the government stressing that the government’s demand for 40 percent of university IGR is unjustified, particularly as it has yet to grant them autonomy.

Ochefu emphasised that universities operate without surpluses, relying primarily on student fees rather than generating profits or revenues, and any enforced deduction would ultimately affect parents.

“If you look at the Act, it didn’t say 40 percent IGR, but a 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 the Federal Government 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.

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.

Read also: Impact investing seen tackling Nigeria’s unemployment, education challenges

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,” he said.

Similarly, Emmanuel Osodeke, the national president of the Academic Staff Union of Universities (ASUU), reacting to the recent decision of the government said that as a union, the lecturers will be meeting soon to take the decision.