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Four states battle FG over N118bn derivation underpayment

By Omoh Gabriel, Business Editor

Four of the nine oil producing states of the federation are at longerheads with the Federal Government over underpayment of N118 billion between 2006 and 2008 as derivation revenue.

The four states are thus demanding that the Revenue, Fiscal Mobilisation Commission directs the Accountant General of the Federation to pay up the amount.

The states are Abia, Akwa Ibom, Delta and Edo states.    According to the states, the implementation of the 13 per cent derivation principle in the sharing of revenues to littoral states in the country between 2006 and December 2008 is based on production average, estimates, rather than actual production.

As a result of the application of estimate in computing federal allocation to states, figures credited to states led to underpayment to some states and overpayment to others.

Details of the overpayment and underpayment per state are as follows; states underpaid from the 13 per cent derivation revenues between November 2006 and December 2008 are Abia State N11, 589, 736, 747.87; Akwa Ibom N42, 292, 251, 176.95; Delta State; N57, 986, 727,351. 05; Edo State N6, 123, 308, 881. 99. States that were overpaid during the same period are Bayelsa N36, 218, 407, 541. 70; Cross River State N5, 660,738, 036. 29; Imo State N10, 109, 248, 720. 22; Ondo State N22, 646, 498, 608. 18; and Rivers State N43, 357, 131, 251.48.

According to officials of government close the Federation Account Allocation Committee said “whenever such discrepancies between payments and actual crude productions had occurred in the past, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) had reconciled such discrepancies between actual productions and revenue disbursements to the respective states.

“However, for the period under review, the RMAFC did not carry out such accounts reconciliation, and the discrepancies remain an outstanding fiscal issue, showing underpayment of N N117, 992,024,156  collectively to four states of Abia, Akwa Ibom, Delta and Edo.

Five states comprising Bayelsa, Cross River, Imo, Ondo and Rivers were overpaid collectively to tune of N117, 992,024,157.

“The states that were short-changed in the 13 per cent derivation payment have now written to the Federal Government demanding that their arrears be paid to them.

Unfortunately the matter has been confused in the mass media  by people who think the issue is related to the question of the ownership of oils wells among littoral and non-littoral states in the Niger Delta.


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