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Oil producing states criticise Niger State governor's call for review of revenue allocation formula
| February 27, 2012
While inaugurating the advisory council of the Sir Ahmadu Bello Memorial Foundation, the Governor of Niger State and Chairman of the Northern Governorsâ Forum, Dr. Babangida Aliyu, commented on the current revenue allocation formula that favours the south-south states at the expense of the northern states saying, âThe revenue allocation formula should be looked at. We are hoping that within 2012, there would be discussions and review of the allocation formula. âBut there are other issues that would come. For example, there were oil wells that were over 200 kilometres away of the shore of the country. Those ones before the passage of law by the National Assembly were supposed to be oil wells for the whole country. It will not serve everybody well if certain parts of the country are not doing well while some parts are doing exceptionally well. So, the pressure will continue until we are able to find a solutionâ Also, in comments at unrelated events, the chairman of the Central Bank of Nigeria, Mallam Lamido Sanusi Lamido, who is also from Kano state, linked the ongoing uprising by Boko Haram to poverty which he claims is as a result of the uneven distribution of Nigeria's oil resources. Responding to his comments, some governors and major stakeholders in the oil producing states described Governor Aliyu's comments as unfair, provocative, insensitive and an uneeded distraction from the Boko Haram insurgency. Governor Emmanuel Uduaghan of Delta State said, "Review of revenue allocation has to be done under the law, the law is that land and water are part of a state and so, the oil and gas resources found 200 kilometers away is inside the state that it is foundâ. âThere is no way you can say that 200 Isobath does not belong to state. They are entitled to make request for review of revenue allocation formula, but to say that those oil wells do not belong to a state is unacceptableâ The Rivers state Commissioner for Information and Communication, said, âIt is unfortunate that this is coming from a governor I respect. Knowing the environmental degradation in the Niger Delta, the thought of getting equal allocation of funds is unnecessary. Every state has its own resources. We also have states that are doing well in agriculture but the proceeds from such resources are not shared among states. âThe funds that are shared among the states of the federation come from the oil bearing states. The level of magnanimity from the Niger Delta should be saluted and not the call for sharing the proceeds from the oil-bearing states equally.â The Akwa-Ibom State government said, âThe demand by the northern governors is improper. When they were receiving 50 per cent for groundnut, they did not share it with anybody. âNow that 13 per cent oil derivation is paid to the South-South and other oil producing states in the country, they want the money to be shared with them. Donât they know about environmental degradation? Donât they think that people live along the coastline and that they are affected by oil spills and other environmental degradation through the activities of oil companies? âWhat have they suffered to justify their demand that they equally get 13 per cent of oil revenue? It is uncalled for.â The Chief Press Secretary to the Abia State governor said, âI donât think it is fair for anybody to complain about what Niger Delta states get as monthly allocation because these are the states that suffer environmental degradation. It will not be fair for anybody to say that the funds from crude oil should be shared equally between the oil-producing and non-oil producing states. âWhat we are getting in Abia as a Niger Delta state is not enough and we are calling for an upward review of our monthly allocation. Abia is serious about developing the state and as an oil-bearing state; we need more funds to achieve all these." The Ondo State Commissioner for Information said, âWe should not forget the fact that states that are currently enjoying the derivation fund had experienced serious environmental degradation and untold neglect by successive governments in the past despite the fact that they were âlaying the golden eggs.â âThe bulk of the money being used to develop the country is coming from the natural resources being derived from the oil producing states but they remain the least developed in terms of provision of infrastructural facilities. âThe condition of most residents of the oil producing communities is appalling. Many of them do not have access to drinkable water, decent accommodation, good roads, functional public schools and qualitative health care, among others.â Some members of the National Assembly also added their voice to the controversy with Senator Ikirikpo Claver saying "They should not see us as fools because Jonathan is the president now, they want to destabilize him and the government with whatever means. How many argued when they had 50 per cent from groundnuts and cocoa? âAs a Senator representing an oil producing state, I believe that the Niger Delta States are presently receiving less than they should receive because they suffer the degradation of their environment and subsequent loss of income earnings due to these oil prospecting activities. So rather than talk about reduction, we should talk about increasing their share through a change in the revenue allocation formula.â Senator Solomon Ita Enang said: âLet them consider the dual carriage ways in the north and tell us how much of these are in the Niger Delta and other parts of the country. How much has been spent on FCT alone and where is the money from. Let them consider how much is invested in Kaduna State alone and how much has been invested in oil producing States, how much of oil money in river basins that is in the North can you find in the South? "Those who are making this call now want to wake up the people of Niger Delta and the South on issues we said should be allowed to rest so that our children and youths will not be reminded of concessions we made just for national unity, what is the value of NNPC towers, PTDF in the north, is there such in the Niger Delta?â The governors of the South-South region are expected to meet this week to develop a formal response to the calls for a review from the north. The current revenue allocation formula stands at 52.68 per cent for the Federal Government; 26.72 per cent for states; and 20.6 per cent for council areas - 13 per cent is given to the oil-producing states as derivation from proceeds accruing from sale of oil.

(1) Comment


"The views and opinions expressed in these comment(s) or article(s) do not necessarily reflect the views or opinions of NGEX, its partners or its affiliates."
Ma'aji Caleb Zonkwa    Kaduna, Nigeria    February 27, 2012
Interesting;-This 13% derivatives issue table above seem to eared to the actual issue recorded on matter of derive formula drawn earlier by Philipson and Professor J.R. as recommendation in 1946

Thus, being the first revenue allocation exercise in Nigeria which was based on principle of derivation tampered with the policy of even progress -especially considering natural disaster eg. As they saw it coming a head with time, the south sinking into the lagoon; the far north devastated by encroachment of the desert.

Also by 1952/53 there was a further innovation based on principles of derivation needs and national interest-also considering the south sinking into the lagoon the far north devastated by encroachment of the desert; which Sir Lovis Chick commission in 1953 re-enforced a formula for peace and development as Nigeria a country appropriately being put in the AFRICA MAP.

Title as:-the principle of derivation for NIGERIA, in which all regional government accepted and use. Therefore, there is more to the rudimentary to comprehend the issue of the 13% formula because the whole country is a factor...
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