TETFund: Pendulum swings in favour of raised tax

By ENO-ABASI SUNDAY   |   10 September 2015   |   2:53 am  
Lecture theatre at the Gombe State University,Gombe, funded by TETFund

Lecture theatre at the Gombe State University,Gombe, funded by TETFund

ON Wednesday, July 8, 2015, former Speaker, House of Representative and governor of Katsina State, Aminu Bello Masari, was at the Headquarters of the Tertiary Education Trust Fund (TETFund) in Abuja, where he appealed to the fund to intervene in the training of quality teachers in the state.

The former number four in the country, who specifically sought the outfit’s intervention in the provision of infrastructure, training and capacity building, stressed that the state was in dire need of English language and mathematics teachers.

Barely two weeks after Masari’s trip to the TETFund office, his Plateau State counterpart, Simon Lalong, was also cap-in-hand at TETFund appealing to the body to extend its interventions to the state-owned varsity, polytechnic and college of education.

Lalong specifically requested the agency to intervene in the state’s university and provide it with Information and Communication Technology (ICT) centres, laboratories and lecture theatres as well as a Faculty of Health Science building.

The two state chief executives are part of a wide array of highly placed individuals that routinely flock the institution in search of one form of intervention or the other.

TETFund’s mandate

Established as an intervention agency under the Tertiary Education Trust Fund (Establishment, etc) TETFund Act, 2011, the outfit is charged with the responsibility of managing, disbursing and monitoring the education tax to public tertiary institutions in the country.

To enable it achieve the above objectives, the TETFund ACT 2011 imposes a two per cent education tax on the assessable profit of all registered companies in the country.

The Federal Inland Revenue Service (FIRS) is the organ of government empowered by the Act to assess and collect the tax and the fund administers the tax imposed by the Act, and disburses the amount to tertiary educational institutions at federal and state levels. It also monitors the projects executed with the funds allocated to the beneficiaries.

The mandate of the fund as provided in Section 7(1)(a) to (e) of the Act is to administer and disburse the amount in the fund to federal and state tertiary educational institutions, specifically for the provision and maintenance of essential physical infrastructure for teaching and learning, instructional material and equipment, research and publication, academic staff training and development as well as any other need which, in the opinion of its Board of Trustees, is critical and essential for the improvement of quality and maintenance of standards in the higher educational institutions.

A catalogue of achievements

In what looks like an advertisement of the funds achievements, Executive Secretary of the TETFund, Prof. Elias Bogoro at the 27th Annual General Meeting (AGM) and International Conference of the Nigeria Institution of Mechanical Engineers at Zaranda Hotel in Bauchi, Bauchi State informed that 10, 363 tertiary workers have been trained by the fund between 2010 and 2014.

Bogoro, who said TETFund’s intervention in staff training was unrivalled in Africa and among the best in the world, in a paper he presented titled, “Capacity Building and Infrastructural Development in Nigeria: The TETFund Intervention in Nigerian Public Tertiary Educational Institutions,” said 3, 270 university workers, 3, 050 in polytechnics and 4, 043 in colleges of education were trained in the period under review.

He added that 1, 633 doctorate degree holders were trained abroad and 3, 041 in the country; 1, 375 masters’ degree holders were trained abroad and 4, 084 in the country.

Other than manpower training, Bogoro late last year informed that about N456bn had so far been released for the execution of projects including classrooms, lecture theatres, hostels and sundry facilities in various tertiary institutions across the country, as part of measures to arrest the deteriorating learning environment in tertiary institutions.

Considering the contribution of TETFund to the advancement of tertiary education in the country, not a few stakeholders were gladdened by the recent revelation that the process of increasing the education tax has begun.

In intimating of the imminent increase, Bogoro, who spoke in Abuja said that the Federal Ministry of Education had already sent a comprehensive report to the Presidency in which it recommended an increase in the education tax from the present two per cent to between three and four per cent.

“In a recent report by the Ministry of Education to the Federal Government, a case was made for the increase of the two per cent education tax collection by Federal Inland Revenue to three or four per cent. We are supportive of it…”

“Definitely the process will begin as soon as government gives the go ahead. There is a proposal to Mr. President, and government will review and see the benefits and demerits, and when government decides it would formally take it up. For us at TETfund, it may just be that government has taken a decision and we are supposed to ensure that it is facilitated. Whatever contributions we need to make to add to an Executive Bill emanating, that would raise the collection from two to four percent, we will do,” he said

He said, “…Today because of aggressive intervention and concentration of government attention on our public tertiary institutions and with massive support of TETFund, we now have 28 Nigerian universities ranked among the top 100 in Africa. We are not feeling good that we are still outside the 2,000 mark for the world… Nigeria is yet to be there. We remain quite embarrassed, but you better imagine if we increase the intervention and there is patriotic application of the funds in the priority areas, the ranking of our universities will begin to compete with the very best in the world,” Bogoro added.

Even though private universities, one of which he sits atop do not benefit from TETFund, Vice Chancellor of Caleb University, Lagos, Prof. Ayo Olukoju, says any increase in the allocation to the to the education sector is always a welcome development because of the volume of work, upgrade and sundry logistics that need to be carried out in the sector to make it thriving, productive, ultimately leading to the enthronement of excellence.

“Even though my school does not benefit from TETFund, I am always of the opinion that any increase to funds that come to the education sector is always welcome because of the very many needs of the sector. Just as increase is important, the transparent application of the funds is also of great importance.

“Having said that, I would love to add that the increase should not just be for the purposes of funding the bureaucracy of TETFund, but most importantly, it should be channelled for capacity building and equipment procurement.”

He also added that because of their migratory nature and their ability to swing seamlessly between the public and private sectors, a sizeable chunk of the funds should be devoted for research grants to train PhD holders.

In closing he said, “In principle, increasing education tax to four per cent is a great idea, but issues of transparency, accountability, equitability and targeting the funds to areas of dire needs are very germane.”

Beware of stirring donor fatigue

In the view of former Vice Chancellor of Niger State-owned Ibrahim Babangida University, Lapai, Prof Ibrahim Adamu Kolo, “Beyond paying the two per cent education tax now, there are companies like telecommunication giants MTN and Globacom that still involve themselves in other forms of corporate social responsibilities (CSR) in certain institutions. If the tax is upped to four per cent without taking cognizance of the CSR, which they do willingly, then you are likely to begin to have donor fatigue. So, the government has to be wary of this and not discountenance the CSR initiatives engaged in by these firms.

“However, one way of doing this is for the enabling law to address what expectations are there, in terms of CSR to the education sector because a firm like MTN even spends more than four per cent of its profit in healthcare related CSR works to communities in areas not reached by government. So we need to be careful in order not to kill the zeal with which people are willingly giving the two per cent now.”

Criticisms about TETFund

Severally, schools have complained that the process of accessing funds from TETFund have been largely cumbersome and accounts for the sloppy pace, with which approvals are given. Kolo agrees with this.

“The only thing that people seem to have about TETFund is that sometimes the procedures to access funds are so long and cumbersome, and many institutions have backlogs of deals that are not cleared. TETFund is always of the opinion that the problem usually stems from the benefitting institution.
When I said that the procedure is cumbersome, it is because TETFund just allocates you funds, you have to do your prioritisation and that must be done through a committee institutionally. And then, beyond that, you have to follow all the procedures of due process including advertisement in the newspapers, engage in open, transparent bidding, and get a “Certificate of no Objection” from the Bureau of Public Procurement (BPP), and your submissions to the BPP can be there for three to four months because they have so much work to do, probably because it is over centralised now.”

Kolo, who was appointed vice chancellor of the defunct Federal University of Education, Kano, by former President Goodluck Jonathan, before the incumbent, Muhammadu Buhari suspended the process continued, “You can also be dragged back by professional petition writers, who see nothing good in what you are doing, no matter how transparent the process may be. Once these people come up with petitions, they halt the entire process. Once this happens, it can take another three moths for the BPP to address the matter and you may even be asked to start all over again. So, institutions run into all these kinds of problems, especially if the institution is one that follows procedures strictly. There are some that don’t follow these procedures strictly and they still get away with it.

“Having said that, I think sincerely that TETFund can initiate a process of cutting down on some of these procedures. Once that is done, then it would become possible for institutions to quickly access year-by-year, whatever allocations they have. Now, you can still see advertisement of projects that were initiated from 2011, 2012 and 2013.

“In addition to this, TETFund as an institution has to examine itself, in terms of the extent that it is also transparent about the entire procedures and clear transactions. The institutions must also do this to themselves because many institutions are not very careful so that they don’t run into trouble. All these concerns notwithstanding, the good work that TETFund is doing is manifest, as there are scarcely no state or federal government-owned institutions that have not benefitted from TETFund,

Sloppy procedure, not entirely TETFund’s fault

For senior lecturer in the University of Lagos, Dr. Ayodele Ibrahim Shittu, “In terms of constraints associated with the access to intervention funds, TETFund cannot take all the blame. The managers of our tertiary institutions also have to share in it. For instance, how many of our existing academic staff in our public tertiary institutions are aware of the call for proposals? And how many are enlightened of the process involved from the submission, through the approval-in-principle through vendor engagement, vetting and processing, and the application for the first tranche. Well many are of the view that the process, coupled with other bureaucratic colorations, is cumbersome. Not forgetting the “in-house politics” that plays out at the level of submission in each tertiary institution as well. I am not aware of TETFund receiving proposals directly from staff. It passes through the management of our tertiary institutions, who in turn forwards selected proposals to TETFund for further consideration.”

The university teacher shedding light on TETFund’s interventions said, “The political economy of tax-based education spending lends support to prevailing arguments in the country that extant interventions have spurred Nigerian public tertiary institutions into global reckoning. Today, 28 of our universities are ranked among the first 100 universities in Africa. This is a proof that our government’s aggressive support for, and concentration on the nation’s public tertiary institutions is yielding desirable results. Thus, if funds accruable from the proposed 2 percent increase in Education Tax can be judiciously utilised then the goal of achieving the mark of 1,000 global universities becomes undoubted.

“On the other hand, the escalation of economic development wars among nations, including Nigeria, brings to reckoning the relevance of productivity-education link in this matter. Leading argument in this regard reveals that high school and tertiary institution attainment rates are significant factors in explaining per capita income growth of a nation. This argument highlights clearly that the primary goal of education intervention funds is increasing educational attainment, which has a positive correlation with income earnings. Although the transmission from education spending to favourable educational outcomes is not automatic, there is a need for a variety of policies and programmes.

“Having said these, I concur with the argument that the proposed two per cent increase in education tax is justified. Even though the funds and support provided by TETFund is narrowly focused on public tertiary institutions, its commitment to capacity building, the provisions of infrastructures, as well as the facilitation of multidisciplinary research and development (R&D), obviously, have long-term implications for the growth and development of the Nigerian economy.

On how TETFund has fared in the discharge of its responsibilities, Shittu, who is of the Department of Economics said, judging from what I have seen in tertiary institutions around me, the University of Lagos, Yaba College of Technology, and the Federal College of Education (Technical), new infrastructures are springing up and many of such carry the emblem, “TETFund Intervention,” with various years. I am also privileged to have participated in a capacity building workshop in 2014, which seeks to enhance our R&D capabilities. Not that alone, funds are also made available annually for academic staff of higher institutions to attend trainings abroad, including conferences to present research papers. Even though, the demand for institutional support is increasing by the day, in my opinion, TETFund has done creditably well in the discharge of its responsibilities.”

But what are Shittu’s criticisms about TETFund as an interventionist agency, he said, “My critics of TETFund as an interventionist agency are in 3 folds. The first stems from Section 7 (1) of the TETFund (Establishment, ETC) Act of 2011. The 5th responsibility imposed on TETFund sounds ambiguous because the decision to provide for other needs beyond infrastructure, instructional materials, research, publication, and academic staff training is anchored on the opinion of the Board of Trustees.

“The second stems from the cycle of fund disbursement, especially for academic research and development. Many times when I appreciate buildings erected on our campuses around the country, I observe closely that the label “TETFund Intervention” has with it belated years. For instance, check around newly built infrastructure and what you would see is “TETFund Intervention Fund e.g. 2011/2012,” where as we are already in 2015. Let us assume that these funds were released in 2011/2012 session and given the prevailing circumstances in our construction industry, such projects take time to be completed, what about the funds for academic research and development. Many of the academic staff in this country, including myself, are yet to come to terms with funding life cycle of TETFund.

“The third critique has to do with TETFund’s attitude to the maintenance of the infrastructure provided in our tertiary institutions. The Act establishing the fund emphasises the provision or maintenance of essential physical infrastructure for teaching and learning. Unfortunately, TETFund leans so much on the side of “provision” paying little or no attention to “maintenance.” I may be wrong but this is the reality going by the state of many of the physical infrastructure funded by the intervention fund from TETFund in many institutions.

On the likelihood of donor fatigue setting in, in view of CRS initiatives engages in by some outfits, he said, “Firms donating buildings or equipment are really appreciated but in most cases, many of these firms seek market opportunities in return. Thus, “nothing goes for nothing” has become the norm.

“Over the years, quality of research comes after research quantity. Rather than nursing the fear of this two percent increase, it is better to think more on how to take advantage of the prospects if it scales through the Presidency and the National Assembly. Psychologically, a two percent increase in education tax poses a threat of reducing the profitability of the firms. However, economic evidences abound that investment in education can promote the profitability of the firms, as well as the prosperity of the country.



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