The Bayelsa State Government expressed concern over the fiscal arrangement, particularly for oil-producing states, where the calculation method for the 13 per cent derivation allocated to states by the Federal Government remains undisclosed.
During the income and expenditure briefing for August, September, and October 2023 in Yenagoa, the Commissioner for Finance, Mr Maxwell Ebibai, addressed this issue.
Referring to reports from non-governmental organizations labeling Bayelsa State and others as potentially reliant solely on federal allocations due to insufficient internally generated revenue, Ebibai advocated for states to have access to information regarding the actual quantity of crude oil exported by the country. He emphasized that being privy to such data would enable greater transparency and comfort for affected states.
Ebibai criticized the NGOs’ assessments, asserting that the Federal Government acts merely as a revenue collection agent on behalf of the states. He argued that allowing states to directly collect revenues would significantly enhance their viability. He further highlighted how federal instruments, such as the Petroleum Exploration Act, have hindered states from collecting certain land use taxes, which could otherwise be crucial for substantial developmental purposes.
Ebibai, while advocating structured federalism, said, “If you are rating the sustainability of a state based on internal revenue; let’s face the fact. The internal revenue is collected based on the constitution, allowing the collection of those revenues. If that is correct, the same constitution recognizes that we are entitled to 13% (derivation) revenue and the Federal Government is only and agent of collection of 13% revenue on behalf of the states.
“It’s our revenue, it’s not federation revenue. If the capacity was there, and the system allows it, this is revenue that, in fact, if the state (Bayelsa) is allowed to do what we should do, it is in our interest to collect this money directly. This is because now, we are in a situation where it’s the figures they (Federal Government) feed us with that we take as 13% figure.
“If we are allowed to be on some of our platforms to know what is actually going out of our platforms, we will be more comfortable. So, we strongly believe it is wrong to rely on the Constitution as a basis to determine internal revenue, and when it gets to 13% internal revenue, you now decide that the Constitution is not relevant. What kind of analysis is that?
“And based on that, you pass an assessment of viable or no viable state. It’s completely unfair and it’s not acceptable to us.”
Nevertheless, the Finance Commissioner revealed that Bayelsa State received net sums of N20.718 billion, N22.356 billion, and N21.899 billion in August, September, and October, respectively, from the Federation Account Allocation Committee.
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