Moving towards true federalism: South-South governors want 50 per cent derivation money

by Stanley Azuakola

Northern leaders and their Southern counterparts have totally divergent views on how the resources of the nation should be shared and managed.

Whereas the Northern leaders, especially state governors have become more strident in their calls for the removal of the onshore/offshore dichotomy, their Southern counterparts are insisting that in fact what is needed is an upward review of the present 13 per cent derivation formula to 50 per cent.

This call was again made in Asaba, the Delta State capital on Monday, in a meeting between the trio of Delta State Governor, Emmanuel Uduaghan, his Edo State counterpart, Adams Oshiomhole (represented by his deputy, Pius Odubu) and Akwa Ibom State Governor, Godswill Akpabio. The governors spoke at an advocacy workshop on economic diversification and enhanced revenue generation organised by the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC).

Left to the governors, each geo-political zone of the country should be allowed to develop at their own pace in line with the principles of true federalism. They each canvassed for a diversification of the nation’s economy from its over-dependence on oil revenue. The governors believe that it is important for the derivation formula to be increased to 50 per cent in order to address the level of degradation caused by oil exploration in the Niger Delta region.

According to a Guardian report:

Uduaghan said the current 13 per cent derivation was grossly insignificant because of the large-scale environmental degradation of the region due to the activities of multinational oil companies.

He lamented that what was accruing to the region was insignificant and that 50 per cent will be appropriate.

Uduaghan said: “We want to appeal to our brothers advocating the removal of the on-shore/off-shore dichotomy that that is a no-go area. The matter has been laid to rest for good.”

Speaking in the same vein, Akpabio advised RMAFC to devise a blueprint that would increase the derivation to 50 per cent.

“We have resources that are untapped but because of our monolithic economy and over-reliance on oil wealth, we have failed to explore other areas. When there is a reduction in the benchmark for oil, our resources dwindle because we don’t have any other source of income. This clearly reflects the urgent need for us to diversify our economy and broaden our revenue base. The extent of decline in the manufacturing and other sectors has revealed a level which must be addressed urgently,” he said.

On his part, Chairman of RMAFC, Mr. Elias Mbam, explained that the aim of the series of workshops for the different geo-political zones was to sensitise all the three tiers of government and other stakeholders on the urgent and compelling need to diversify their respective sources of revenue in order to meet the increasing expenditure requirements of governance and development.

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