The Federal Government has initiated a groundbreaking policy, requiring the automatic deduction of 40% from the Internally Generated Revenues (IGR) of Federal Universities and other partially funded institutions nationwide.
This policy, in accordance with Finance Circular FMFBNP/OTHERS/IGR/CRF/12/2021 dated December 20, 2021, imposes limits on annual budgetary expenditures from IGR.
This development was communicated through an official letter dated October 17, 2023, titled ‘Implementation of 40% automatic deduction from internally generated revenue of partially funded federal government institutions’
The letter, addressed to university vice-chancellors, was issued by the Accountant-General of the Federation, Mrs. Oluwatoyin Madein, and signed by the Director of Revenue and Investment, Office of the Accountant-General of the Federation, Felix Ore-ofe Ogundairo. The Minister of Finance, Wale Edun, endorsed the directive.
The letter referred to varsities vice-chancellors was assented to by the Minister of Finance, Wale Edun.
“I am directed to inform you that the Honourable Minister of Finance and Coordinating Minister of the Economy 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 not more than 50 per cent of their gross IGR and the remittance of 100 per cent of the remaining 50 per cent to the Sub-recurrent Account. All statutory revenue lines like Tender Fees, Contractor’s Registration Fees, Disposal of Fixed Assets, Rent on Quarters, etc shall be remitted 100 per cent 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,” Ogundairo expressed.
Earlier, the federal government through the Minster of Education, Tahir Mamman, said it was giving varsities full autonomy to explore sources of financing their activities.