A presidential aide has said that the onshore/offshore dichotomy will not be reintroduced in the distribution of oil revenue to littoral states.
The dichotomy was abolished during the Olusegun Obasanjo administration. It ensured that littoral states like Akwa Ibom got more revenue from oil as they were now entitled to a share of the petroleum derived offshore of their territory.
The presidency was reacting on Monday to what it called misconception arising from the recommendations of the committee raised by the governing All Progressive Congress (APC) on true federalism.
The Governor Nasir El-Rufai-led committee had recommended that “to promote the unity of the country and ensure that states are more financially empowered to deliver services to their residents, as well as ensure no one feels disadvantaged, the committee recommends that the federal government should expeditiously review derivation to reflect areas of consensus which are adoption of state control of resources and pay federal government upward review of the current formula in favour of states and adoption of similar derivation formula in favour of solid minerals and power generation.”
PREMIUM TIMES reported how some politicians in Akwa Ibom alleged that the recommendation was targeted at the state.
In response to such criticisms, the Senior Special Assistant to the President on National Assembly matters (Senate), Ita Enang, who briefed State House correspondents in Abuja on Monday, said the issue was being used to campaign against President Muhammadu Buhari.
He said the government had not ”covertly or overtly reintroduced the dichotomy.”
“Attention is drawn to the campaign against Mr. President, the APC as a party and the Committee on proposal for re-structuring of Nigeria report led by Governor El-Rufai alleging that the said report is introducing on-shore/off-shore dichotomy intended to deprive the littoral states of Akwa lbom, Bayelsa, Rivers, Delta, Lagos among others of the derivation content of revenue allocation.
“I want to state aforehand that neither President Muhammadu Buhari, the APC as a ruling party nor the report on restructuring has reintroduced covertly or overtly or in any manner whatsoever the abrogated on-shore/off-shore dichotomy and that the statutory allocation to Akwa Ibom and other littoral states will not decrease.
“I speak and say again that the intendment of the (APC) report is to allow the states control resources and devolve more powers to the states, and consequently increase allocation to the states, of which Akwa Ibom is among.”
Commenting on the APC committee’s recommendations, the presidential aide said the ruling party’s committee in response to popular opinion, recommended an upward review of the current derivation formula and adoption of the said formula in favour of solid minerals and hydro power.
He said the recommendation will entail the amendment of a section of Nigerian constitution.
“The apprehension of the contenders is that the recommendation says that the oil, gas, and other minerals devolved to the state and that off-shore belongs to the federal government.
“By God’s special providence, arising from the decision of the Supreme Court in the case of AG. v Abia State & 35 ors (2002) 6 NWLR (part 764) 542-905, I played central co-ordinating role in the abolition of the on-shore/off-shore dichotomy in the House of Representatives and my brother, Senator Udoma Udo Udoma now Honourable Minister of Budget and National Planning led in the Senate,” he said.
Mr. Enang said the Supreme Court judgement led to a political solution and amendment of existing law.
“We deemed this window for legislation and accordingly the Allocation of Revenue (Abrogation of Dichotomy in the Application of the Principle of Derivation) Act 2004 was made which states:
“Abrogation of the Onshore and Offshore Dichotomy;
“As from a commencement of this Act, the two hundred meter water depth Isobaths contiguous to a state of the Federation shall be deemed to be a part of that State for purposes of computing the revenue accruing to the Federation Account from the State pursuant to the provisions of the Constitution of the Federal Republic of Nigeria, or any other enactment.
“Accordingly, for the purposes of the application of the Principle of Derivation, it shall be immaterial whether the revenue accruing to the Federation Account from a State is derived from natural resources located onshore or offshore.”
The presidential aide therefore insisted that “the above is the provision of the existing law.”
“No suggestion has been made for the abrogation of this Act in the recommendations, and no proposed bill is drafted in the report,” he said.
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