Bill to Amend Nigeria’s Revenue Sharing Formula Passes Second Reading at Senate, 20% Proposed for Sovereign Fund

The Nigerian Senate on Wednesday passed for second reading a bill to amend the allocation of revenues which accrued to the federation account to include the Nigeria Sovereign Investment Authority (NSIA) as a beneficiary of the allocation.

At the moment, the revenue is shared monthly among federal, state and local governments with 13 percent allocated for derivation and natural resources.

The new bill is titled, “The Bill to amend the allocation of revenue (federation account etc.) Act CAP A 15 LFN 2004 and for Other Related Matters, sponsored by Senator Bassey Akpan.

Akpan in his lead debate said the amendment would make the NSIA a first line charge beneficiary of the Federation Account for saving purposes.

According to him, the amendment would also increase the funds by deducting 20% of the total earnings accruable to the federation account.

Akpan said the Senate had earlier proposed an amendment to section 162(3) of the Constitution of the Federal Republic of Nigeria,1999 (as amended) to provide for the inclusion of the NSWF established under the NSIA (Establishment, Etc.) Act in the distribution of any amount standing to the credit of the Federation Account.

He said, “We had equally proposed an amendment to sections 30(1) and 47(2) of the Nigeria Sovereign Investment Authority (Establishment, Etc.) Act Cap A 15 Laws of the Federation,2004 to provide additional funds for the SWF through a statutory allocation of funds from the monthly revenue accruing from the Federation Account.

“This is aimed at strengthening the operations and withdrawals from the SWF by the Federation to further boost the confidence of the federating units in the operations of the Fund to the benefit of all.”

Senators who contributed to the debate emphasised the need for a dedicated saving culture to safeguard the Nigerian economy  due to the rapidly changing dynamics and volatility of the global oil market.

They however called for caution on the 20% deduction from the nation’s gross earnings arguing that the country’s economy may not be able to sustain such arrangement at the moment.

The President of the Senate, Ahmad Lawan, agreed with his colleagues and said such decision would be taken by stakeholders during the public hearing.

 

By Deji Elumoye

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