Inadequate funding hampers revenue formula review, says RMAFC Chairman

Mr Elias Mbam, Chairman, RMAFC

The new revenue formula has been delayed till next year.


Efforts by the Revenue Mobilization Allocation and Fiscal Commission, RMAFC, to give the country a new revenue allocation formula may have suffered a setback, as the Chairman of the Commission, Elias Mbam, says inadequate funding is the greatest hindrance to the process.

The Chairman, who was briefing reporters on the issue in Abuja on Wednesday said the success of any effort to review the existing formula for a new one is dependent on several variables, chief among them inadequate funding.

“The success of the effort to review the existing revenue formula and come up with a new one depends on certain variables, one of such being funding.” Mr. Mbam said. “The Commission remains optimistic that funding from the 2013 budget might address the funding challenges.

“Funding is required to finance the travel arrangements of 37 members to all parts of the country, hire consultants, carry out workshops as well as other sundry logistics required to help receive inputs from various stakeholders. This is much.”

Mr. Mbam was not forthcoming on the exact date the new revenue formula would be released. He, however, said the Commission is working towards next year if the necessary funding required to complete the assignment becomes available.

On the contentious issue between the states and oil producing communities about the use of the 13 per cent derivation funds, Mr. Mbam pointed out that the provisions of the RMAFC Act does not allow the Commission to release money to oil producing communities, rather to advise state governments to use the fund to develop the communities where oil exploration takes place.

“The 13 per cent derivation fund is meant to address the challenges that may arise as a result of oil production,” he said, adding that any aggrieved oil producing community is free to come forward with presentations during the review of the new revenue formula, particularly on how best the 13 per cent derivation should be handled.

On the face-off between Bayelsa and Rivers states on the ownership of five oil wells in Soku, the RMAFC chairman said the Commission would maintain the status quo by leaving the oil wells in Bayelsa state.

“The status quo remains (on the issue), and that is that the oil wells for now belong to Bayelsa state. It is an old issue, and the RMAFC is not doing anything differently until the National Boundary Commission, NBC, completes its assignment and the Supreme Court gives a final ruling on the matter.”

On the allegation that revenue from Soku oil field was being attributed to Bayelsa state, Mr. Mbam said the RMAFC is relying solely on the decision of the Presidential Committee on the Verification of Oil wells of December 2000, which comprised representatives from the office of the Vice President, National Security Adviser, Department of State Security, National Boundary Commission, RMAFC, the Nigerian Navy, Department of Petroleum Resources, DPR, and the office of the Surveyor General of the Federation, which retained the oil wells in Bayelsa state.

In addition, he said the Commission is holding on to the Supreme Court judgment of Tuesday, July 10th 2012, which stated that “until the National Boundary Commission concludes its exercise of delineation of the disputed boundary to finality, it will be futile and premature to determine the boundary of the two party states in the present circumstance. However, the appropriate order to be made in the prevailing circumstance is that of striking out the plaintiff suit.”

He disputed claims by the Kalabari National Forum that President Goodluck Jonathan connived to take away some communities from Rivers state and hand them over to Bayelsa state for political reasons. He said that such claims are baseless and a calculated attempt to misinform the unsuspecting general public and embarrass the RMAFC.

Mr. Mbam urged all parties to exercise restraint and allow peace to reign pending when the National Boundary Commission completes its assignment on the delineation of boundaries between the two states, since it was not the responsibility of the RMAFC to adjust boundaries or determine location of oil wells.

Bayelsa state, he said, has already sent a petition to the Commission, which resulted in the constitution of an inter-agency committee, comprising of the National Boundary Commission, Department of Petroleum Resources, DPR, the office of the Surveyor General of the Federation and the offices of Surveyors-General of Bayelsa and Rivers states, to review the issues.

The committee is expected to look at the details of the petition to determine where the disputed oil wells belongs, while the DPR would determine the content and quantity of the oil wells

He however said that the National Boundary Commission would be expected to complete its assignment first before the determination of the state that owns the wells.


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