Revenue Sharing Formula: South-south Calls for 50% Derivation

The governments of the South-south states have called for a review of the revenue sharing formula, which gives resource producing of the revenue accruable to the nation at least 50 per cent and the down ward review of federal allocation.
The states said the review became necessary due to the expanded responsibilities of the second-tier of government and also meet infrastructural development plans for the people.
They also insisted that the federal government’s failure to meet the significant aspects of its assigned role and objective necessitated the reduction in its direct duties.
Governors Godswill Akpabio of Akwa Ibom and his Bayelsa State counterpart, Seriake Dickson, who were represented by their Secretaries to the State Government (SSG), Mr. Udom Emmanuel and Professor Allisson Edmund-Oguru respectively, in their presentations in Yenagoa, to the opening of a two-day zonal public hearing on the review of revenue allocation formula, agreed that the 50 per cent upward review of derivation to states would increase states’ capability to function and meet their development plans.
The states proposed a vertical formula in which the federal government share should be reduced from 52.68 per cent to 40 per cent, the states from 26 per cent to 36 per cent and the 774 local government from 20.6 to 24 per cent.
Both states, however, differed on the proposed horizontal formula with Bayelsa proposing a reduction from 40 per cent to 10 per cent sharing based on population, Akwa Ibom State proposed a reduction from 40 per cent to 15 per cent.
Dickson said the demand for upward review of revenue allocation became imperative noting environmental challenges arising from exploration activities of the multinational oil companies in the region.
Lamenting the level of environmental degradation occasioned by oil exploration and exploitation activities in the Niger Delta, the governor pointed out that the current 13 per cent derivation principle was grossly inadequate to address the challenges confronting the region.
Calling for a reduction of money accruing to the federal government from the Federation Account, Dickson submitted that such reduction would discourage the struggle for political power at the national level and enhance the capacity of the state and local governments to accelerate development and make life more meaningful for the people at the grassroots.
“The enormous resources at the centre have fostered a do or die mentality among the political elites of this country, most of who go to the extreme to achieve their political ambitions to control the centre. States favoured by the principle of revenue sharing such as population and landmass have grown steadily dependent on allocation from the federation account and have lost initiative and drive in matters of economic planning and revenue generation.
“The RMAFC should revisit the era of 100 per cent, 50 per cent or 30 per cent derivation formula to reflect true federalism. It is a well known fact that the exploration of oil in the Niger Delta region has not only exploited the people of the area but also made the area toxic resulting into massive pollution of the environment which has in turn adversely affected the agrarian and subsistence lifestyle of the people.
“The current 13 per cent derivation principle has become increasingly inadequate to surmount the huge developmental challenges confronting the area.    
“That is why it has become imperative for the National Assembly to expedite action on the Petroleum Industry Bill (PIB), which I believe when passed into law, will adequately address the lopsided revenue allocation formula especially to the oil producing states and communities of the Niger Delta.”
Other states representatives including the Commissioner for Justice and Attorney-General of Cross Rivers State, Mr. Attah Ochioke, muted the need for a constitution review and reduction of the derivation formula of the federal government to 35 per cent.
In his remarks, the Chairman of the RMAFC, Mr. Elias Mbam, said the commission decided to embark on the public hearing in line with the provision of the 1999 Constitution, which empowered it to review the revenue sharing formula periodically.
According to him, the exercise would enable Nigerians to make their inputs into the review process that will bring about a new sharing formula that will conform to changing realities in the country.
Mbam who described the South-south zone as one zone that has demonstrated strong commitment to national development, called on the people to avoid utterances and unrealistic demands capable of heating up the polity