Governors from the 19 northern states on Thursday called for a review of the revenue allocation formula “to reflect current realities.”
Chairman of the Northern Governors’ Forum, and Governor of Niger State, Dr. Babangida Aliyu, said this in Abuja while inaugurating the Advisory Council of Sir Ahmadu Bello Memorial Foundation.
Aliyu described as unfair, a situation where a state like Niger got between N4.2bn and N4.5bn as monthly allocation while some other states received 20 times the amount.
The governor said Niger State spend half of its monthly allocation on payment of salaries and other overheads. This, according to him, leaves the state with barely enough to provide infrastructure and other needs of the people.
The governor said he and other governors of the region hoped that the revenue allocation would be reviewed before the end of the year.
He said, “The revenue allocation formula should be looked at. We are hoping that within 2012, there would be discussions and review of the allocation formula.
“But there are other issues that would come. For example, there were oil wells that were over 200 kilometres away of the shore of the country. Those ones before the passage of law by the National Assembly were supposed to be oil wells for the whole country.
“But now, they have been made to be given only to the contiguous states in addition to the 13 per cent derivation. So, if you look at that, you will say that it will not serve everybody well if certain parts of the country are not doing well while some parts are doing exceptionally well. So, the pressure will continue until we are able to find a solution.”
The governor of the Central Bank of Nigeria, Alhaji Lamido Sanusi, had in an interview with The Financial Times of London last month, decried what he termed the low allocation to Northern states from the Federation Account.
Sanusi had linked violence in the North, particularly the activities of the violent Islamic sect, Boko Haram, to the uneven distribution of the country’s wealth. He had said that attempts to redress historic grievances in Nigeria’s oil-rich south might have inadvertently helped create the conditions for the sect’s insurgency.
Sanus, said that it was necessary to focus funds on regenerating other regions if Nigeria wanted to secure long-term stability.
He said, “When you look at the figures and look at the size of the population in the North, you can see that there is a structural imbalance of enormous proportions. Those states simply do not have enough money to meet basic needs while some states have too much money.
“The imbalance is so stark because the state still depends on oil for more than 80 per cent of its revenues.”
Currently, the revenue allocation formula is 52.68 for the Federal Government, 26.72 per cent for states and 20.6 per cent for council areas.
Thirteen per cent is also given to the oil-producing states as derivation.
The 13 per cent derivation was introduced in 1999 as part of measures aimed at redressing the long time grievances of oil-producing states of the Niger Delta.
Official figures from the government show that oil producing Rivers State received N1,053bn between 1999 and 2008 from the federal allocation.
However, two states in the North-East – Yobe and Borno – received N388bn within the same period.
Oil has been the main stay of the country’s economy since 1958 when itwas discovered in commercial quantity.
