APC vs PDP Governors Clash Over Oil Revenue Allocation

Bala Mohammed, the Governor of Bauchi State, has stated that state governments have not yet reaped the benefits of the increased revenue from the oil sector, as the funds are not being accurately credited to the Federation Account.

In his capacity as Chairman of the People’s Democratic Party Governors Forum, he called on the Federal Government to offer a comprehensive and transparent explanation to the public regarding the failure to properly remit collected revenues for fair distribution among the three levels of government as required by law.

The governor made these comments during a visit from Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, who paid a courtesy call to the state government house ahead of the 2024 Conference for the National Council on Finance and Economic Development taking place in Bauchi.

He emphasized that it should be regarded as nothing short of a miracle that states have not yet benefited from the current oil revenues, despite the country being one of the world’s leading oil producers.

The PUNCH highlights that NNPCL is a significant source of income for Nigeria, functioning as the national oil company responsible for overseeing the management, sales, and other essential activities related to the country’s crude oil and gas.

It contributes revenue from crude oil sales to the government’s treasury.

However, in recent years, NNPC has transferred almost no funds to the Federation Account due to the costs associated with the subsidy on Premium Motor Spirit.

Our reporter’s investigation revealed that the national oil company did not contribute any money to the federation account in 2022.

It stated that the fuel subsidy prevented the revenue-generating company from paying taxes and royalties to the Federation Account and stopped it from turning a profit.

However, Umar Ajiya, the former Chief Financial Officer of NNPCL, confirmed in a documentary earlier this year that the removal of the subsidy led to the company beginning to make remittances into the Federation Account.

“We have now begun to pay dividends to the federation. We are also paying our due obligations in terms of taxes and royalties,” he stated.

The company further stated in the documentary that the end to subsidy enabled it to contribute N4.5tn to the Federation Account in nine months.

“For the first time in a long time, NNPC Ltd in 2023 contributed to the Federation Account, accounting for N4.5tn between January and September 2023,” the national oil company stated.

Further investigations showed that NNPC transferred N431.06bn of its accumulated earnings to the federation account during the first seven months of 2024.

Stakeholders had anticipated better allocation of funds after the fuel subsidy was removed through the current sector deregulation, which led to a 490 percent increase in petrol prices.

However, in his remarks, the governor expressed dissatisfaction, stating that no noticeable changes have occurred.

He said, “It’s a miracle that we are one of the biggest oil-producing nations, but we have not benefited for some time since you came on board.

“You have to explain that this is what you are going through. That is inclusion. And if you don’t say it, nobody will know. But, some of us know. We call this leadership and responsibility.”

 “You have to make our oil and gas sector produce. Not only to produce and sell but put it in our Treasury for distribution and sharing.

“You must provide financial services to us at subnational. Financial services that will help us to enhance our productivity, and also use the resources wisely. Because without us, there will be no Federal Government.”

In reply, the governing All Progressives Congress has criticized governors from the Peoples Democratic Party, urging them to demonstrate that they have not gained from the crude revenue under President Bola Tinubu’s current administration.

He said, “Our call at all points in time is that opposing views are welcome in as much as they are constructive towards nation-building, and they are not views expressed only because they want to play to the gallery. If his view is to be taken seriously, it must not be generic and verbose. It must be specific and concrete.

“Senator Mohammed must put down those evidence on the table for further elaboration. It is only at that point that we can then, as a political party, venture to take on the issues in a very objective manner. We have seen clamours of this before now and when you dig further, you will find no substance in it.

“So, by and large, it is welcome, and our call would be that he put the facts. We have always known that proceeds that ought to go into the consolidated revenue account of the country are not things done in an obscure manner. They are things that are done transparently.”

In a special interview with The PUNCH, Nze Chidi Duru, the Deputy National Organising Secretary of the APC, advised Senator Bala Mohammed, Chairman of the PDP Governors’ Forum and Governor of Bauchi State, to seek clarification before presenting unverified claims to the public.

Duru emphasized that the APC government is open to corrections, but urged Mohammed to provide concrete proof to support his assertion, particularly since it is widely known that every state receives a higher allocation under the current administration.

He pointed out that previous warnings of this nature had proven to be nothing more than attempts to discredit the Federal Government and paint it in a negative light before the public.

“It is important again to note that this is the first time in the history of our country that more money has gone into the hands of the various tiers of government at various levels. At the state level and the local government level. So, one would be interested to know what these enormous resources have been deployed at those levels and used in the various states and tiers of government.

“So, the party and the government are not averse to any constructive criticisms or further feedback or data that would help the government to plug in the various loopholes that would bring in money. At the end of the day, these monies are not just meant for the federal government. It is not meant for the APC government or the Tinibu government. These are monies meant for distribution to the states, the local government as well as the federal.

“So, as much as the federal is interested in receiving more money, I would also believe that the states and the local government are also interested in receiving more money. The only way they can make more money or get more money on top of what they are getting is to point out if there are recognisable leakages in the system that need to be blocked.

“If the money that needs to come into the consolidated account is not coming in and is pointed out, the government would make the necessary effort to make sure that those monies are coming into the coffers of the government. This is where I think that the opposition should help headline and spotlight what needs to be done to make the country a much better place than is currently the case,” he stated.

The NNPCL spokesperson, Femi Soneye, did not reply to phone calls, text messages, or WhatsApp messages sent to his contact numbers for clarification on the matter.

The PUNCH