October 25, 2024
By Adedoja Adesoji
Lawmakers from the Niger Delta region have introduced a bill to increase the derivation fund from 13% to 50% to secure greater financial autonomy for the region.
The bill, which has passed its first reading, aims to amend Section 162 (2) of the Nigerian Constitution to allocate a minimum of 50% of revenue from natural resources and value-added tax (VAT) based on derivation.
Lead sponsor, Mr. Iwaji-Inombek Abiante, argues that the current 13% rate is inadequate, contributing to resource exploitation and environmental degradation.
He believes the increased allocation will combat oil theft, illegal mining, and pollution, leading to investments in social, economic, and security infrastructure.
Abiante emphasizes the initiative’s benefits for national development, citing historical context from previous constitutions that supported higher derivation rates. He also notes that incorporating VAT revenues will promote competition among states, boosting productivity.
The proposed legislation has sparked discussion on revenue sharing and regional development. If passed, it could significantly impact Nigeria’s economic landscape.
Mr. Abiante stressed the need for a united front to amend the revenue sharing formula, saying, “Let us indeed renew the hope not only of our founding fathers but also that of generations after us.” He framed the initiative as aligned with the principles of equity and justice, ensuring that states contributing to the nation’s wealth receive a fair share of the benefits.
The bill is set for discussion on the House floor next Tuesday.
