Ayodele Aminu
28 October 2002
Lagos — The Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) has said that the new revenue allocation formula that would allocate statutory fund to the three tiers of government would incorporate the application of derivation principle as passed by the two arms of the National Assembly.
The Senate and House of Representatives last week passed a presidential bill abrogating the onshore/offshore dichotomy in the application of derivation principle.
Speaking after the plenary session of the RMAFC over the weekend, the commission's chairman of Public Relations Committee, Chief Jaypeekay Ajaelu said the commission has deliberated extensively on the new revenue sharing formula before the successful passage of the bill on the derivation principle.
The bill is entitled "Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act 2002."
"With the successful passage of the bill on derivation principle by the National Assembly and the recent Federal Govern-ment representation and submission on the formula, it became imperative for the nation to have an acceptable and just sharing formula which would be legally and constitutionally binding," Ajaelu said in a press statement signed by the RMAFC's Head of Public Relations, Mr Yushau Shuaib.
Noting that the derivation principle is part of the constitutional provision on revenue allocation, the RMAFC boss disclosed that the commission is studying the bill with a view to merging it with its general recommendation that would address all the related fiscal issues in totality.
He, however, explained that this "would not have much effect in the vertical and horizontal indices, adding that the commission hopes to present the reports in two weeks time after all corrections and proof-reading would have been done."
On Nigeria National Petroleum Corporation (NNPC) Special Account with Central Bank of Nigeria (CBN), Ajaelu said the commission only received the reply from the Attorney General of the Federation after it was published in some newspapers. He nevertheless said the commission is studying the letter for appropriate and definite stand in the interest of the federation.
Attorney General Kanu Agabi last week in a letter to the commission said the new account NNPC opened at the CBN to take care of the payment of Joint Venture cash calls was constitutional.
The commission had earlier, in a letter to the Attorney General, argued that it was unconstitutional for the NNPC to pay money to another account different from the Federation Account.
The statement, however, explained that there is no misunderstanding between NNPC and RMAFC except disagreement on constitutional and legal interpretation which is being examined in the overall national interest.
On external debt portfolio of states, he said that the commission is concerned about debt accumulation as it seems the debtors are not offsetting their indebtedness and settling the principal, but paying penalties on default which has serious effect on the economy. He regretted that it would take some states 50 years to be able to liquidate the debts.
Meanwhile, in another development, some women from Niger Delta, led by a prominent Itsekiri leader, Mrs Rita Lori, paid a visit to the commission and pleaded the RMAFC to maintain its early recommendation on the application of the derivation fund where oil communities that suffer from the environmental degradation will benefit.
Responding Justice S.L. Popoola, the chairman legal committee of the commission said RMAFC had the oil producing communities at heart and that informed its previous recommendation designed to addressed the plights of the host communities from the judicious utilisation of the fund.
The commission, saddled with the constitutional responsibilities of fashioning out revenue formula, monitoring the accrual in and disbursement from federation account, had met last week on various fiscal issues. It submitted its report on external debt to President Olusegun Obasanjo after the meeting.
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