South-South wants oil derivation share increased to 50%

The six states in the South-South geopolitical zone have demanded the upward review of the oil derivation formula from the present 13 per cent to 50 per cent.

This was as the zone demanded a special status for Cross River State, following the ceding of the Bakassi Peninsula and several oil wells to Cameroon by the Federal Government.

These were among the resolutions of the governors, local government chairmen and people of the zone at the end of a two-day public hearing on the revenue allocation formula review for the South-South organised by the Revenue Mobilisation Allocation and Fiscal Commission held in Port Harcourt.

The event had the six Commissioners for Finance in the zone as representatives of their various states, as well as local government chairmen, civil society groups and stakeholders from the zone. The Delta State Commissioner for Finance, Dr Fidelis Ekenwo, who read the position of the zone, said the governors rather than make separate presentations, decided to speak in one voice and address situations confronting the zone.

Ekenwo said the revenue formula should be adjusted, with 42 per cent going to the states while 35 and 23 per cents should go to the Federal Government and local governments, respectively.

He argued that the current formula with the Federal Government getting a higher allocation was promoting wastage and inefficiency at the federal level.

Ekenwo said, “This is the position of the six states of the South-South geopolitical zone; the governors, local governments and people of the zone. Rather than balkanise our presentations state-by-state, it is imperative for the zone to put together one resounding voice in addressing the situation that concerns the zone and we recommend the following:

“The people of South-South want the 13 per cent derivation to be moved up immediately. We are recommending that the new derivation should be 50 per cent.  We are clearly unhappy because we believe that the current 13 per cent is not doing anything for us.

“Every state should take charge of their resources and contribute an agreed percentage to the centre for the services of the Federal Government.

“Secondly, a review of the Legislative List and the transfer of some responsibilities to the states, such as agriculture, housing, water resources, transport, road construction. These items do not have any business with the Federal Government, because the states and local governments are closer to the people.

“In the last 25 years, has there been any federal housing estate project in the zone? Yet money is budgeted yearly to the Federal Ministry of Housing.

“All funds generated by revenue-generating MDAs should be added to RMAFC for onward distribution to the states and local governments, who are also co-owners of these MDAs.

“Oil companies should relocate their head offices and operational bases to areas of their operation.

“In the South-South, any state that suffers any negative impact also affects other states. We are asking that there should be a special status for Cross River State.

Credit: Punch