Oil Producing States: Bill Seeking Upward Review from 13% to 50% Derivation Passes Second Reading

Adedayo Akinwale in Abuja

The House of Representatives has passed a Bill that seeks upward review from 13 per cent to 50 per cent derivation for oil producing states have passed through the second reading.
The Bill which seeks to rephrase Paragraph 2 of Section 162 (2) of the Constitution by deleting the words ‘not less than 13 per cent’ in line three and insert ‘not less than 50 per cent’ was sponsored by Hon. Awaji-Inombek Abiante and eight others.
Leading the debate on the Bill, Abiante said the Independence Constitution of 1960 and the Republican Constitution of 1963 in Sections 134(1) ( &b) and 140 (1) (a & b) respectively recognised payment of 50 per cent proceeds of any royalty received by the federation in respect of any minerals extracted in any region in the country.
He said it was therefore in view of the above that the 1999 Constitution as amended in Section 162 (2) emphasises that any approved principle or formular should not be less than 13 per cent of the revenue and not that it should be pegged at thirteen percent.
Abiante stated: “It is in the light of the foregoing that I stand before you to state that the current “not less than 13 per cent” derivation entrenched in the 1999 Constitution of the Federal Republic of Nigeria is grossly inadequate and a mis-representation of the spirit of pre-independence negotiations and agreements.
“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 does not also seem achievable with the current practice of 13 per cent.”

The lawmaker argued that the Bill was not all about resource control but an attempt to address the myriads of issues bordering on the meager “not less than 13 per cent” 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).

Abiante said it was important to state that this amendment is not only relevant for today but also for the future.

He added: “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 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.”