Reps consider bill to increase derivation fund

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The House of Representatives is to consider an amendment bill seeking an upward review of the derivation fund from the current “not less than 13 per cent” to not less than 50 per cent

The bill, which is being sponsored by Hon. Awaji-Inombek Abiante and 8 others, was mentioned for second reading on Wednesday at the plenary session presided by Speaker Tajudeen Abbas and was later deferred to Tuesday next week for continuation of debate to allow members to have first-hand knowledge of the intent of the bill.

The bill seeks to alter Section 162(2) of the 1999 Constitution by deleting the words ‘not less than thirteen per cent’ and inserting ‘not less than fifty per cent’.

While leading the debate on Wednesday, Abiante said, “It is in response to the clamour of the present administration to right the wrongs of previous regimes and the pure federal system that we are lending our voice under this regime of renewed hope, as hope remains the last pillar, which when it collapses, all hope is lost.

According to him, “Let us indeed renew the hope not only of our founding fathers but also that of generations after us by the unanimous endorsement to review quickly and to amend the formula to not less than fifty per cent (50%) according to the Independence Constitution of 1960 and the Republican Constitution of 1963 in Sections 134 {1 (a & b)} and 140 {1(a & b)

“It is noteworthy to add that including all revenues from VAT in this sharing arrangement will enhance competition among the states for increased productivity by making their environment friendlier for investment in order to increase their revenue. This is in tandem with the spirit of equity and justice.”.

“There has been a discovery of one billion barrels of crude oil and gas in the north-eastern part of the country along the Chad Basin in neighbouring Bauchi and Gombe states; there are gold fields in Zamfara, Niger, Osun, Kwara, Ebonyi, Kaduna, Edo, and Bauchi states, and also the FCT; tin mining in Plateau and Nasarawa state, among others.

“The truth is, every state in Nigeria is endowed with mineral resources, and this bill seeks to ensure that states and regions where these minerals are extracted from also have their revenues allocated according to the 50% derivation formula.”

The Rivers lawmaker argued that the current formula of revenue sharing renders the collective wisdom of our patriots/statesmen and their intellectual wisdom worthless.

He further explained that the current “not less than thirteen per cent” derivation entrenched in the 1999 Constitution is grossly inadequate and a misrepresentation of the spirit of pre-independence negotiations and agreements.

According to him, “Even in the intent and desire to ensure the rehabilitation and development of the damaged environment where mineral resources (liquid, gaseous, and solid) are derived for the sustenance and development of the whole country, this does not also seem achievable with the current practice of 13%.

“This Bill is not all about resource control but an attempt to address the myriads of issues bordering on the meagre “not less than 13%” derivation fund payable to states on revenues derived from their environment as provided for in Section 162(2) of the 1999 Constitution of the Federal Republic of Nigeria as amended.

“It is important to state that this amendment is not only relevant for today but also for the future. Some of us may feel that this section that we seek to amend makes no meaning to them because their states are not presently affected. But it is pertinent to ask, What about the future?

“Let us remember that every state in the Federal Republic of Nigeria is blessed with abundant natural resources capable of turning the economic fortunes of the country. The increased interest by the Federal Government to reduce the dependence on oil and gas as the mainstay of our economy means attention will be shifted to the solid minerals.”.

He further explained that the huge environmental impacts of the exploitation of natural resources on the host communities are devastating, including pollution, hunger, insecurity, and youth restrictiveness.

According to him, “the meagre “not less than 13%” derivation as presently provided for by the 1999 Constitution of the Federal Republic of Nigeria encourages illegal exploitation and mining of our natural resources.

” It is said he whose parents provide enough food does not bring disgrace to his parents by fighting for food outside. It is a truism that rich parents who do not provide enough food for their children despite having them in abundance can only encourage such children to pilfer from them.

“The illegal refineries that litter the entire Niger Delta region and illegal mining sites across some other parts of Nigeria are reflections of non-commitment of enough funds for the development of these areas.

“The deployment of enough funds means more development in terms of social, economic, and security infrastructures. The various state governments’ ability to build industries will keep the restive youths engaged and away from crimes, especially from the illegal mining and exploitation of natural resources.

“The eradication of illegal mining will mean more money for the Federal and State governments to share for development purposes; besides, the energy and the resources used in chasing and closing illegal operators would be channelled to fast-track the development and protection of the region, and indeed, any part of the Federation as presently is where mineral resources or any revenue is gotten for the running of the business of governance, hence the urgent need to increase the derivation fund from “not less than thirteen per cent” to “not less than fifty per cent.”

“This menace of oil theft has become a threat to our national security and economy, hence the recent tour of the Niger Delta region by the National Security Adviser, Mallam Nuhu Ribadu, Chief of Defence Staff, Minister of Defence, Minister of State for Petroleum Resources, and Chief of Air Staff on the 26th of August, 2023, with the strong determination to fight illegal refineries.

“The revenue allocation formula as previously enshrined in both the Independence and Republican constitutions will certainly resolve this issue and make for greater patriotism and a sense of commitment from all.

This sense of patriotism will reduce or totally eliminate oil theft and illegal mining, as constantly reported.

“It will also make for greater development hinged on healthy competition, as witnessed in pre-independence Nigeria and the First Republic, where we had the famous Cocoa House, the University of Ibadan, the University of Nigeria, Nsukka, the University of Ife, as it was then called, the famous groundnut pyramid in Kano, the foundation for the eventual establishment of the Ahmadu Bello University, the Western Nigeria Television, and several others.”

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