Derivation Formula Review: N'Delta gov, senators, Reps blast northern govs

VANGUARD Newspaper

GOVERNORS of the South-South region are meeting this week to articulate a formal response to increasing agitation from northern leaders for a reduction in the flow of derivation proceeds to oil producing states in the region.

In their reactions, Niger Delta senators and Reps are accusing the Northern leaders of provocation, insensibility and distraction from the Boko Haram insurgency in the north by their calls for a reduction in the revenue accruable to the oil producing Niger Delta states.

Some South-South leaders, however, welcomed the call as perhaps a possible opportunity for the enactment of the fiscal federalism that has been also canvassed by elements in the South-South region.

The latest call for a review of the revenue formula came last Thursday through the Chairman of the Northern Governors’ Forum, and Governor of Niger State, Dr. Babangida Aliyu, who while inaugurating the Advisory Council of the Sir Ahmadu Bello Memorial Foundation lamented what he described as a skewed revenue formula process that favoured the South-South at the expense of the North.

Oil revenues in continental shelf
He also hinted at a review of the consideration of the assignment of oil revenues in the continental shelf.

“The revenue allocation formula should be looked at. We are hoping that within 2012, there would be discussions and review of the allocation formula.

“But 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.”

His assertion followed earlier comments by the Kano born Governor of the Central Bank of Nigeria, Mallam Lamido Sanusi Lamido where he linked the ongoing insurgency by the Boko Haram Islamic group to poverty he said arose from the alleged lopsidedness of revenue to the south.

Governor Emmanuel Uduaghan of Delta State while confirming that South-South governors had scheduled a meeting over the development 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 found”.

“There is no way you can say that 200 Isobath does not belong to state. They (northern governors) 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 unacceptable”, he added.

Besides Governor Uduaghan, Senators, members of the House of Representatives, former Minister of Information, Prof. Sam Oyovbaire, Prof. B.I.C. Ijomah, and leader of the Niger Delta Peoples Volunteers Force, NDPVF, Alhaji Mujahid Dokubo-Asari, traditional rulers were among others who fired back yesterday.

Among the Senators from the region who responded to the development yesterday were Senators Ikirikpo Claver, PDP, Bayelsa East, Enyinniya Abaribe, PDP Abia South, Senator Lokpobiri Heineken, PDP, Bayelsa West, Senator Solomon Ita Enang, PDP, Akwa Ibom North East and Senator Ifeanyi Okowa, PDP, Delta North.

Warning that the north should not see the people of the South-South as fools, Senator Claver who wondered why northern leaders have bypassed the issue of Boko Haram to focus on the oil proceeds to the oil producing states said: “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?

“As 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.”

Describing the call as unthinkable, Senator Lokpobiri said: “The problem of Nigeria today is that successive governments deviated from the true structure that was agreed by our nationalists before independence. Every state has its own resources, everyone should be thinking of developing sectors in their states with a view to raising revenue. The people of the Niger Delta suffering the environmental hazards, no one is talking about that; what is good for the goose is good for the gander, it should be increased to 50 per cent.”

In his reaction, Senator Enang, PDP, described the call as insensitive warning that the north should not wake the people of the South-South to revisit issues that had been considered settled in the Nigerian federation.

Enang who is the Chairman, Senate Committee on Rules and Business called for the amendment of the constitution that will reflect true fiscal federalism that would allow the states to exploit their resources and pay tax to the federal government.

Investment on carriageways
He said: “Let 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?”

Senator Ifeanyi Okowa on his part described the call as an insult. He said: “I think it is not right to talk in that manner. The constitution in the first instance said nothing less than 13 percent should be given to regions where resources are being sourced from and the Federal Government is currently implementing that. Any attempt to take it below 13 percent rather than move it to 25 percent will be very insulting to the Niger Delta people.

“Northern leaders can say what they like about the revenue to the Niger Delta, but they should know that the Niger Delta has made more sacrifices to Nigeria than any other region. And where this resource is coming from, most of the villages are not developed. You need to go and see how people are suffering in the Niger Delta.”

The call was also flayed by members of the House of Representatives from the region yesterday. Rep Daniel Reyenieju, Delta State, and Rep. Sokonte Davies, PDP Rivers, in condemning the call said it could well be an opportunity for the restructuring of the country.

Reyenjeju said: “Of course if we must dialogue if that is one of the issues that they must bring to the table, if all the states of the federation decide to bring the issue of revenue to collect more from the centre well and good let them come.”

Restructuring not revenue allocation
“What we need is restructuring and not revenue allocation which will increase anybody’s share. With restructuring, everybody will be happy and we shall then agree on what comes to the centre. That itself will reduce the attraction to control central power,” Davies said.

Ex-Information minister, Prof Oyovbaire told Vanguard: “It is a pity that in 2012 the northern governors are proffering this kind of argument. They have refused to tackle the issue of underdevelopment, which they identified years ago, and instead of addressing the matter squarely, they want funds that do not belong to them”.

He said the issue of onshore/off shore derivation was a settled matter and wondered why northern governors were resurrecting it. Oyovbaire said: “The northern governors have simply re-opened the issue of restructuring of the country. I think, however, that their call is a strategy of provocation because we have been arguing that 13 per cent derivation is too small, yet they are saying that it is too high. I feel sad that we are going to all these again”.

Erudite academic, Prof Ijomah in his reaction said: “Well, if they want a review of the revenue allocation formula, it should be in the direction of what northerners wanted before independence. It is their resolution that revenue should be collected by regional governments. That is the way we in the South-South want it. We should return to pre-independence situation, that is fiscal federalism. No review outside that will be acceptable to us.

“The review should be that each state should collect its revenue and pay royalty to the central government. This is the Aburi agreement and the basis of Nigeria’s unity. Abubakar Tafewa Balewa and other northern leaders supported this, otherwise, there is no basis for the present unity in the country.”

Niger-Delta activist, Alhaji Dokubo-Asari, who spoke to Vanguard from overseas, said: “The northern governors should go and look for their own resources because we want 100 per cent. They should stop thinking that they (north) will continue to intimidate us. They don’t have right to our oil resource; they should look for their own. We are demanding 100 per cent of our resources because when it was groundnut and other things in the past, they did not use the money to develop the South-South, it was only the north that they developed.”

Former President of Ijaw National Congress, INC, Prof Kimse Okoko in a chat with Vanguard described as unacceptable the position of the Northern Governors calling for review of the country’s revenue allocation formula on grounds that it was allegedly skewed in favour of oil states. He said their position had further reinforced the call for a Sovereign National Conference and the urgent need to amend the 1999 Constitution in favour of true federalism in the country.
Coordinator of the South-South Elements Progressive Union, SSEPU, Joseph Ambakederimo stated: “The Northern Governors call is not only parochial but smacks of insensitivity. When we are still agitating for resource control which we are prepared to fight to achieve with the last drop of our blood, they are talking of sharing of money. Whose money do they want to continue to share?

Founding Director, Ijaw Council for Human Rights, ICHR , Patterson Ogon, asserted: “The call of the Northern governors would have made meaning if they, in their wisdom had advanced a review of revenue sharing formula on the basis of revenue generation, a fiscal federalism wherein the component units are statutorily empowered to explore and develop their natural and human endowments and pay tax to the centre.”

Former chairman of the Traditional Rulers of Oil Producing Communities Organization of Nigeria, TROMPCON, HRM, Charles Ayemi-Botu in his own reaction yesterday said: “What the South-South is for asking for is the implementation of true fiscal federalism”, pointing out that it was a misnomer for northern governors to think that oil revenue would be shared equally.

His words: “It is an insult on injury for them to think in that way or make such suggestion.”

He said TROMPCON had been crying for a long time that the Revenue Mobilization, Allocation and Fiscal Commission, should begin the implementation of true fiscal federalism, and said the call for the review of the formula by northern governors should form the basis of action.

“True fiscal federalism means that whatever resources are found in your place, you will take and pay tax to the Federal Government. This is what is happening in the United States of America where we copied our presidential system of government. Derivation is paid by states to the federal. We are not against the review of the revenue formula; it is foolhardy for them to think that revenue that is supposed to come to the oil states where the resources will be shared equally with them. In fact, I am even surprised that they are talking about oil revenue at a time they should be concerned with how to arrest the Boko Haram that is on rampage in the north.”

Mainstay of the economy
The royal father asserted: “They forgot what when agronomy was the main stay of the economy of the country, they were collecting 50 per cent derivation and now that it is oil, they are angry that we are collecting 13 per cent, which is not enough. It is not up to 50 per cent they were collecting before. We have been collecting 13 per cent since 1994 and we want a review, we want to start collecting 100 per cent in the spirit of true fiscal federalism and pay tax to the federal government, this is what it is supposed to be.”

On his part, former acting Managing Director, Niger Delta Development Commission, NDDC and Executive Director Finance and Administration, Pastor Power Aginighan, said the call by the northern leaders was inconsistent with reports of the various panels that had looked into the problems of the region and recommended upward review of resources to the area.

Aginighan who noted that the 13 percent derivation to the region was still not appreciable wondered what was happening to solid minerals reportedly mined from other sections of the country. He said it was a paradox that a Ministry of Solid Mineral was being funded by proceeds from oil in the Niger Delta region yet no revenue from the mineral goes into the federation account.

A frontline activist in the region, Dr Sofiri Peterside, said the call by the northern leaders was not realisable. According to him, when agriculture was the mainstay of the nation’s economy they had the lion share.

Also a chieftain of the Peoples Democratic Party in Rivers State, Prince Tonye Princewill, said if there should be any review of the allocation principles then it should be to raise what accrues to the Niger Delta region. He said this would help tackle environmental challenges and pollution occasioned by oil exploration in the area. “If any review should be done it should be on how more fund should be credited to the region in order not to destroy the bird that lays the golden egg, to address seriously the damage of lack of development, today the future of the South South is bleak as experts have predicted that in near future natural disasters like earthquake, flood will be the lot of the region.”


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