The claim by Babangida Aliyu, Niger State governor, that “revenue from oil wells within 200 kilometres of the continental shelf ought to be for the whole country, but the revenue goes to some states” is incorrect. What is correct is that 13 percent of the revenue from offshore oil wells goes to the littoral (coastal) states in accordance with the Offshore/Onshore Abolition Act of 2004, while the remaining 87 percent goes to the distributable revenue pool for sharing by the whole country in accordance with the existing vertical and horizontal allocation formulas. This means that the FG gets 52.68 percent; all the 36 state governments share 26.72 percent; while all the 774 local governments share 20.6 percent of the amount in accordance with the horizontal formula (based on equality, population, land mass, terrain, population density, and internal revenue generation effort).
By Emmanuel Ojameruaye
Source : Business Day