Monday, 7th July 2014
Conference resumed sitting at 09:28 am.
Votes and proceedings of Thursday 3rd July 2014 were read, amended and adopted as amended.
The last committee (Committee on Devolution of Power presented their report. The co-chairmen of the committee - Obong Victor Attah and Alhaji Ibrahim Commasie, IGP (rtd), presented the report of the committee to the conference.
The report of the committee focused principally on devolving power from the centre to the federating units; and the issue of resources.
Critically examined in the report, were the issues of resource control, derivation principle, revenue sharing and the development and exploitation of mineral resources nationwide.
The report also examined 68 items cited in the Second Schedule, Part One of the 1999 Constitution which deal with the Exclusive Legislative List; and 30 items contained in Part Two of the Fourth Schedule that deal with the Concurrent Legislative List.
Most delegates from the South, particularly, the South South and South East said derivation should be increased from the present 13 percent to between 21.5 and 50 per cent, others suggested that it should be reduced further from where it is now.
Resource control was the most debated aspect of the report.
Those who canvassed the view that states should control their resources said they did so in the spirit of devolution of power which allows the states to only pay or make appropriate financial contributions to the Federal Government.
Others argued that mineral resources in Nigeria are owned in law by the Federal Government as contained in Section 44(3) of the 1999 Constitution, as amended.
Section 44(3) states that: “Not withstanding the foregoing provisions of this section, the entire property in and control of all minerals, mineral oil and natural gas in, under or upon any land in Nigeria or in, under or upon the territorial waters and the Exclusive Economic Zone of Nigeria shall vest in the Government of the Federation and shall be managed in such manner as may be prescribed by the National Assembly.”
In its report, which is still subject to ratification by the Conference, the Committee said that after prolonged heated discussion on resource control, it unanimously agreed that the issue of derivation should rather be discussed instead of resource control.
It said its decision was informed by the emotive nature of the issue, which in the Committee’s view was capable of destabilizing the country.
On derivation, the Committee said some delegates were of the view that derivation should be increased either in a quantum or gradual manner; while others were opposed to any form of increase.
Instead, it said some members had proposed the reintroduction of the off-shore/on-shore dichotomy in derivation payments; at the same time, others stood against it.
It reported that even the abolition of intervention measures such as the Ministry of Niger Delta Affairs, Niger Delta Development Commission and the Amnesty Programme if the derivation formula will be increased were robustly discussed.
After long debates which spanned four days on the issue, the report indicated that a consensus was reached on the issue to the effect that the status quo be maintained in order to avoid upsetting the existing peace and equilibrium in the polity which it described as a product of years of political engineering and craftsmanship.
On fiscal federalism which basically deals with how revenues are generated and distributed among the federating units in the federation, the Committee concluded that the powers conferred on the Federal Government to keep custody of and determine the terms and manner of fund allocation from the Federation Account negate the principles of fiscal federalism.
The Committee highlighted what it called imbalance in favour of the Federal Government in the sharing formula and maintained that the imbalance has adversely affected the performance of the federating units. It therefore asked for a review.
It recommended that the powers of the Federal Government under Section 162(3) of the 1999 Constitution, as amended, to prescribe the terms and manner of sharing national revenue should be exercised through the Revenue Mobilization, Allocation and Fiscal Commission.
The Committee said RMAFC shall at the same time consult the federal and state governments before presenting a draft Bill on the matter to the National Assembly for enactment into law.
On vertical revenue sharing, which deals with how revenue is disbursed to federating units, the Committee emphasized the need for equilibrium between the central government and the federating units comprising states and local government.
It carried out examination of specific development challenges of states and local governments and concluded that to a great extent, rapid economic and social development could be achieved in the country if the percentage of revenues allocated to states and local governments were reviewed upwards.
The committee recommended that the sharing formula for funds accruing to the Federation Account among the three tiers of government should be: Federal Government 42.5% instead of the present 52.68%; State Government 35% instead of the current 26.72%; and the Local Government 22.5% to replace the current 20.60%.
The committee further recommended that the percentage given to population and equity of states in the existing sharing formula be reduced while that assigned to social development factor should be increased to a higher percentage to ensure accelerated development of all parts of the country.
The proposed sharing formula by the committee is based on: diminished emphasis on principles of equality of states and population; increased emphasis on social development factor; and internally generated revenue.
On Mines and Minerals including oil fields, oil mining, geological surveys and natural gas, the committee recommends that they should be retained on the Exclusive Legislative List as specified in the 1999 Constitution but should be amended to read thus:
“The governments of states where the mining activities take place shall be involved in matters relating thereto; (and that) the government of the federation shall create a special fund to develope mines and minerals in states where such resources are undeveloped”
According to the committee, the overriding need to bring all other mineral resources of the country, hitherto undeveloped, into the mainstream development by activating National Strategic Plan for exploitation of minerals to boost their contribution to Gross Domestic Product(GDP), were considered in making this recommendation.
Still on mineral development, the Committee recommends a constitutional provision for the establishment of a Special Fund for the development of mineral resources in the country.
It further proposed that 4.5% of the total revenue accruing to the federation should be devoted to this special fund when established.
In addition, the Committee wants the Special Fund to be in the form of a Venture Capital Fund and that a competent body should be established to administer the Fund according to the guidelines that shall be specified by the National Assembly.
Delegates deliberated extensively on these recommendations made by the committee, especially that of derivation formula. Further deliberation and voting on the proposed amendments and additional recommendation to the report were deferred till the following day.
We adjourned at 3:43pm to resume the following day at 9:00am.
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