In my ‘The Anger of Unfulfillment’ I had pointed out that though our founding fathers had envisaged and established a 50% revenue derivation framework, in a bid to control the country’s oil resources, successive Military administrations systematically reduced the sharing structure, from the initial 50% down to 1% in the 1990’s (it was 1.5% under General Buhari I believe). In the late 1990’s, the then Presidential candidate, General Olusegun Obasanjo, pledged to increase this to 13% and it also helped that a 13 per cent derivation principle was enshrined in the 1999 constitution (though ultimately effected in January 2000). For the avoidance of doubt, Section 162 (2) of the 1999 constitution provides that "The President, upon the receipt of advice from the Revenue Mobilization Allocation and Fiscal Commission, shall table before the National Assembly proposals for revenue allocation from the Federation Account, and in determining the formula, the National Assembly shall take into account, the allocation principles especially those of population, equality of States, internal revenue generation, land mass, terrain as well as population density: Provided that the principle of derivation shall be constantly reflected in any approved formula as being not less than thirteen per cent of the revenue accruing to the Federation Account directly from any natural resources."
“The intention was very clear - to financially empower the oil-producing states of the Niger Delta to tackle the monumental neglect and degradation of the area GIVEN THE LACK OF FEDERAL PRESENCE AND INEFFECTIVENESS OF FEDERAL SPENDING IN THE AREA”.
I recall that I engaged my brother Patrick Etim on comparing apples and oranges, i.e. comparing pre 13% (in some cases 1% Derivation) Niger-Delta Governors to post 13% Niger-Delta Governors. I recall his position on this matter, but that is not what this post is about.
I fully support an equitable derivation formula and insist that the people of the Niger-Delta (and people of any section / area of Nigeria) should get an equitable share of what they produce / their land yields. However we must note that the increase to 13% derivation was arguably due to THE LACK OF FEDERAL PRESENCE AND INEFFECTIVENESS OF FEDERAL SPENDING IN THE NIGER DELTA AREA.
I insist that with the current 13% Revenue Derivation formula most Niger-Delta States now find themselves amongst Africa’s 20 largest economies. Most of them have annual revenues in excess of any Commercial Bank in Nigeria (Zenith Bank’s 2013 Gross Revenues at US$2.06 Billion, First Bank Holding’s US$1.67 Billion, UBA’s US$1.5 Billion, GT Bank’s US$1.4 Billion and Access Bank’s US$1.2 Billion for the corresponding period), in excess of the gross revenue of Nigeria Breweries Plc, and only exceeded by the gross revenues of Oil Prospecting and Telecommunication Firms. This firmly places most of the Niger Delta States amongst Nigeria’s top corporates!!! If we want to be honest with ourselves then we really need to compare the ‘State’ of these States against the revenue (both from the center and internally generated) that accrues to them.
In recent times we have heard an incessant rhetoric of “What has the Federal Government done for you?” a highly justifiable position when a State receives just 1% Revenue Derivation from the center. We have also heard an agitation to revert to the original 50% Derivation formula (notably at the recently concluded National Conference). I believe that the latter agitation will be much more effective if our Niger-Delta Governors can prove to their people (and the world) that the post 2000 13% derivation has been judiciously utilized.
How difficult is that?
Jekwu Ozoemene
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