The federal government has given a directive to the ministry of finance allowing federal universities to operate an endowment fund independent of the Treasury Single Account (TSA).
The TSA is a public accounting system where the earnings of all revenue-generating government agencies, including publicly funded tertiary institutions, are paid into a single account or a set of linked government accounts.
In Nigeria, this financial policy was proposed in 2012 under the Goodluck Jonathan administration.
Its implementation began in September 2015 under former President Muhammadu Buhari, ensuring that all payments are made through a consolidated revenue account (CRA) at the central bank.
The initiative was aimed at increasing accountability and checking cases of multiple accounts run by government ministries, departments, and agencies.
Public tertiary institutions in Nigeria have been grappling with a sustainability crisis for years due to inadequate federal funding.
Calls to rejig and diversify the funding framework for federal universities have intensified in recent years, with more institutions looking to operate endowment funds.
Endowment funds are a pool of donated money that is invested to generate income for an institution’s long-term financial stability.
Typically, the principal amount is preserved and not spent while a portion of the investment returns is used to support the university’s operations, critical infrastructure, scholarships, research, faculty salaries, or campus development.
However, Nigeria’s TSA policy and a general lack of financial autonomy have long held public universities back from pooling funds to invest in profitable ventures.
The National Universities Commission (NUC), in a letter addressed to vice-chancellors confirmed it has now received a presidential directive that looks to grant federal universities the approval to operate endowment funds domiciled with commercial banks.
Chris Maiyaki, acting executive secretary of the NUC, said the approval was contained in a letter from the ministry of education.
He said the letter with the reference “DE/HE/37/VII/324” and dated September 4 forwarded correspondence from the principal secretary to the president referenced “PRES/87/MF/71/198/MBEP/15” and dated July 23.
Maiyaki said the directive, the implementation modalities of which will be communicated, effectively ordered the finance ministry to exclude the third-party research grants of federal universities from the TSA.
He said it also grants universities and research institutes autonomy in operating their endowment fund accounts in commercial banks.
“I am to convey Mr. President’s approval on the above subject to vice-chancellors of federal universities for further necessary action. Joining instructions which pertain to operational guidelines will be issued under separate cover,” the NUC executive secretary said.
