13% oil derivation should be spent on host communities – RMAFC

The Chairman of the Revenue Mobilization Allocation and Fiscal Commission, Engr. Elias N. Mbam, has stated that the 13 per cent derivation from monthly allocation paid to oil-producing states should be exclusively spent on oil-producing communities. Mbam said this should be the case because the oil- producing communities suffer most from the impact of environmental degradation occasioned by oil exploration in their domain.

Mbam observed that the clarification became necessary in view of the fact that a larger percentage of the 13 per cent derivation fund meant for the development of host communities is unjustifiably spent in the development of state capitals and other urban centres thus negating the principle behind derivation.

Mbam lamented that the law establishing States and Local Governments Joint Account is an encumbrance on the successful operations of the 13 per cent derivation principle since the law confers absolute control of the Fund on governors rather than local council chairmen who govern the host communities.