You are here
Home > BUSINESS > No reintroduction of on-shore/off-shore dichotomy in revenue allocation – Presidency

No reintroduction of on-shore/off-shore dichotomy in revenue allocation – Presidency

The Presidency has denied that on-shore/off-shore dichotomy has been reintroduced in the sharing of Federation Account Allocation to littoral states as it concerns crude oil revenue.

This followed what it said was a misconception arising from the recommendations of the committee raised by the ruling All Progressives Congress (APC) on true federalism.

The Governor Nasir el-Rufai-led committee had recommended: “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 FG,’ upward review of the current formula in favour of states and adoption of similar derivation formula in favour of solid minerals and power generation.”

However Senior Special Assistant to the president on National Assembly matters (Senate), Senator Ita Enang, who briefed State House corespondents in Abuja on Monday, said the issue was being used to campaign against President Muhammadu Buhari, denying that government had covertly or overtly reintroduced the dichotomy.

He said: “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.

“And more, by Akwa Ibom State alleging that a greater part of her revenue is from off-shore oil.

“As preliminary, I want to state aforehand that neither President Muhammed Buhari, the APC as a Ruling party nor the Report on re-structuring 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.”

Stating 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 the current derivation formula and adoption of the said formula in favour of solid minerals and hydro power.

He pointed out that the recommendation will entail the amendment of section of Constitution, noting that “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,”

Enang submitted: “By Gods special Providence, arising from the decision of the Supreme Court in the 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.

“Upon the judgment in 2002, the Federal Government, at the lead of Emeritus Governors of Obong Victor Attah (AKS), DSP Alamieyesigha (Bayelsa), James Ibori (Delta) and Peter Odili (Rivers) agreed with the Federal Government on behalf of the littoral States for a political solution, and this was worked out legislatively

“Reading the judgment of Kutigi, JSC (as he then was) in the case of AG, Federation v. AG, Abia Reading the Judgment of Kutigi, JSC State & Ors (Supra) wherein His Lordship states:

“‘This court has no legislative powers and it cannot rewrite the laws. Only the legislature can lawfully and properly do that if it so wishes.

“‘I must observe again that even the plaintiff’s claim before the court is simply “A determination of the seaward boundary of a littoral State within the Federal Republic of Nigeria…’

Enang said: “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 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

“Finally, may l state that at no point has it recommended for on-shore-off-shore dichotomy to be re-introduced or enforced, and the Federal Government is not doing so at this moment

“May this be enough to allay the fears of the agitated or lay to rest the malicious issues raised by false alarmists.”