Monday, 19 March 2012

Boko Haram: FG moves to appease North with 13% derivation

Boko Haram: FG moves to appease North with 13% derivation

As violence continues to rock parts of the North, the Federal Government may have opted to appease some northern states with the payment of 13 per cent derivation on solid minerals with immediate effect.

Vanguard reported that government was worried about rising insecurity in the northern part of the Nigeria with vociferous leaders of the north blaming the situation on poverty and inequality arising from alleged lopsided revenue allocation against them.

The new portal reported its sources said President Goodluck Jonathan was considering various measures, which include the immediate payment of the 13 per cent derivation to solid mineral-bearing states, a preserve hitherto enjoyed by the nine oil producing states of Akwa Ibom, Bayelsa, Cross River, Edo, Rivers, Delta, Imo, Abia and Ondo since the inception of democratic rule in 1999.

It said that government’s decision to pay the money was an indirect way of stemming the growing discontent and violence in that part of the country.

The Federal Government has been paying the derivation fund, which runs into trillions of Naira to only the nine oil-bearing states.

Payment to commence next month

But Chairman, Revenue Mobilisation, Allocation and Fiscal Commission, RMFAC, Mr. Elias Mbam, claimed in an exclusive interview that the payment, which is to commence next month, has no political motive.

Mbam, an engineer, made it clear that the decision to extend the payment to solid mineral states was in obedience to the relevant section of the Nigerian constitution.

The chairman said: “The payment is a constitutional matter, which states that derivation should not be less than 13 per cent and derivation is not limited to oil and gas. This also includes all other mineral resources.

“If you have minerals in your state and it is developed and it generates revenue into the federation account, you are entitled to 13 per cent of what is paid into the federation account.”

The chairman, who did not list the benefiting states and how much would be shared to them, however, said the commission would also not be drawn into agitation by some states for a review of the revenue allocation formula to give them more money.

Section 162 (2) of the Constitution of Nigeria states: “The principles of derivation shall be constantly reflected in any approved formula as being not less than 13 per cent of the revenue accruing to the Federation Account directly from any natural resource.”

Non-oil GDP

N90.4 billion is expected as non-oil Gross Domestic Product by the Federal Government in the next three years as contained in the revised Medium Term Financial Framework between 2012 and 2014. The solid mineral states are expected to earn 13 per cent of the amount.

On the other hand, the nine oil producing states will share at least N1.9 trillion as their share of 13 per cent derivation within the period.

The Minna meeting

But it is not clear whether the leaders of the North would be pacified as they had only a few days ago called for an urgent review of the revenue formula.

In a well publicised communiqué, the North rejected the current revenue allocation law and called for its immediate review, saying it was lopsided, unfair and detrimental to the interest of all Nigerians, including the real people of the oil-producing states it appears to favour superficially.

They argued that oil-producing states were equally victims because the revenue accruing to their states on the basis of derivation over-weighted formula was far beyond their executive capacity to manage, thereby promoting corruption and hyper-inflation in those states, their neighbours and the country at large.

The communiqué said: “This revenue allocation law also stands in violation of the international law with particular reference to the International Law of the Sea Convention (LOSC). The LOSC treaty, which has since come into force (1982), is the principal governing law for all maritime resource issues.”

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