Govs Forum says 30% Frontier Exploration, 3% Host Communities will Deplete Federation Account

Chairman of the Nigeria Governors’ Forum (NGF), Dr. Kayode Fayemi, yesterday, reiterated the state governors’ concerns about the 30 per cent allocation for frontier exploration and the three per cent for host communities as contained in the Petroleum Industry Act (PIA). Fayemi said those provisions in the law assented to by President Muhammadu Buhari on August 16 greatly depleted the Federation Account.

Fayemi spoke in an interview with the Arise News Channel, the broadcast arm of THISDAY.
The NGF chairman, who is also the governor of Ekiti State, said the governors were not carried along in the enactment of the law. But he pledged that the state chief executives would cooperate with the PIA implementation committee headed by Minister of State for Petroleum Resources, Chief Timipre Sylva.
Fayemi said court action would be the governors’ last resort in trying to address their concerns over the PIA.

However, the federal government yesterday clarified that the proposed Nigerian Upstream Regulatory Commission (NURC), not the Nigerian National Petroleum Corporation (NNPC) Limited, will handle proceeds from the sale of crude oil accruing to the three tiers of government when the PIA becomes fully operational.
Fayemi said the forum believed the provisions of the 1999 Constitution should be adhered to with regard to concerns raised by the governors, including ownership structure, accountability, and transparency.
He criticised the federal government’s handling of repatriated loots, saying the management of such funds is not the exclusive preserve of the federal government since the monies ought to be part of the federation account originally.

Fayemi said, “This is a matter that the entire forum has discussed extensively, and we have come to certain conclusions about what is called frontier funds. Whether it is three per cent or not, our concern there is that whatever you are taking into these places is a depletion of the federation account, that money will not go to the federation account, it would be spread across the few areas that you described as volunteer basis, rather than to the entire federation.
“And we worry more about the entire federation not about selected parts of the federation. For us as governors, that is a distinction without a difference. We are talking about depletion from the federation account, whether it is three per cent or 30 per cent.

“It is money that should come to federation account, that should then be subjected to fair and equitable distribution on principles of sharing, rather than one that is going to be at the whims and caprices of this new limited company.”
The Ekiti State governor said the forum would explore all available options before seeking legal interpretation. He said the Minister of Petroleum Resources had reached out to the forum to say that their concerns would be addressed as an amendment to the new petroleum law.

He stated, “It is not everything that we have to resort to court to resolve. We only do that when all options have been exhausted and we haven’t secured a reprieve.
“On this particular instance, we will work with the implementation committee. And if there is any reason for us to take an alternative measure, we will cross that bridge when we get to that. But at least it has been acknowledged that these issues can be resolved, in some way, shape or form, as we are proposing. We will wait and see before we take any further steps.”