The automatic withholding of forty percent from the internally generated revenues of federal universities and other partially supported institutions nationwide has been initiated by the federal government.
The Finance Circular, issued December 20, 2021, with reference number FMFBNP/OTHERS/IGR/CRF/12/2021, governs the auto-deduction policy of gross IGR. The circular restricts the federal government’s annual budgetary expenditure from IGR for partially funded programmes.
This was stated in a letter to the universities dated October 17, 2023, and signed by Felix Ore-ofe Ogundairo, director of revenue and investment at the Office of the Accountant-General of the Federation, and headed “Implementation of 40% automatic deduction from internally generated revenue of partially funded federal government institutions.”
The Accountant-General of the Federation, Mrs. Oluwatoyin Madein, wrote the letter. The Minister of Finance, Wale Edun, endorsed the letter that was addressed to the vice-chancellors of various universities.
“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.
Previously, universities were granted complete liberty to look into ways to fund their operations, according to a statement made by the federal government through Minister of Education Tahir Mamman.
