States to get 13 per cent derivation on solid mineral revenues, says RMAFC

Amidst increasing agitation by some states for increased revenue allocation from the Federation Account, the Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Elias Mbam, has challenged state and local governments to develop the solid minerals potentials in their domains and diversify their revenue base.


Mr. Mbam, who was receiving the Nasarawa state governor, Nasarawa stateduring a visit in Abuja, said such effort would earn them more revenue for their development programmes, as the revenue allocation formula guarantees the payment of 13 per cent derivation on all solid mineral revenues accruing to the federation Account.


“The over reliance on the revenue from the Federation Account is not in the interest of any state or local government,” Mr. Mbam said.


“There is need for every state and local government to understand the importance of diversifying their revenue base outside the oil sector. There is no state of the federation that does not have one solid mineral or the other.


“If the various governments invest in the development of these minerals, more revenue would become available for their development activities, because the Accountant General of the Federation (AGF) has opened an account with the Central Bank of Nigeria (CBN) for revenues from solid mineral s, and states that produce solid minerals are entitled to 13 percent derivation, just as the oil producing states,” he said.


The Chairman, who pledged to assist any state that requires the RMAFC advice on their revenue diversification strategy, said the Commission is making progress in the process of reviewing the revenue allocation formula, pointing out that it would soon invite memoranda from the public to enrich its work.


He advised Nigerians not to over-politicize the revenue formula review exercise, pointing out that rather than help the process, such an act would overheat the polity and fuel suspicion among the people.


“The Commission shall be guided by the relevant provisions of the law, the wishes of Nigerians, the findings during nationwide visits,” he assured.

“We will be fair, just and equitable to all Nigerians. Every view, memorandum and all interests shall be considered and protected during the review, because revenue allocation shall be directly proportional to responsibility.”


The Nasarawa state governor, Mr. Al-Makura, had used the occasion to make a case for the adjustment of the one per cent revenue allocation in the Federation Account for the development of the Federal Capital Territory (FCT) to accommodate adjoining states, in view of the additional burden they face as a result of hosting most Federal Government workers that work in Abuja.


“Nasarawa state, which is the closest to the FCT, is facing a lot of challenges from hosting more than 50 per cent of the federal government workforce,” the governor said.


“The federal government provides 1% of revenue allocation to the development of the FCT. Yet, it is states contiguous to the FCT usurp the stress and challenges of the population explosion in the FCT.


“A lot of people that do business in the FCT live in Nasarawa. Apart from not paying their taxes to the state, they increase the problem of pollution and devastation of the environment, to the extent that the infrastructure and facilities meant to cater for the citizens of the state are overstretched by more than five times.


“Nasarawa being a service state to the federal government needs to be given more attention in the allocation of resources to take care of these challenges. Just as the oil producing states get 13 percent allocation as derivation, I feel allowing contiguous states to the FCT to share in the one percent allocation would boost their development efforts,” the governor said.


On the ecological problems the state is facing as a result of its peculiar topography, Mr. Al-Makura solicited the assistance of the Commission to redress the problems of environmental degradation as a result of illegal exploitation of solid minerals, like barites, which has not earned the state any derivation.


“The Commission should help resolve these difficult problems before it becomes an emergency,” he said.


“The state has large deposits of different kinds of solid minerals being mined on a daily basis. The state has the largest deposit of barites, which is used in the drilling of oil. The state is not benefiting from any form of royalty from the exploitation of these minerals, despite the degradation of the environment. The state’s resources and capacity to redress these problems are limited.”

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