Stakeholder Dialogue on Promoting Advocacy on Subnational Transfers of Extractive Revenues in Nigeria
In the heart of Nigeria, an ongoing conversation is gaining momentum, addressing the allocation and management of revenues derived from the nation’s extractive resources, specifically focusing on the equitable distribution of these funds. Nigeria employs a 13% derivation formula established by the Revenue Mobilization and Fiscal Commission (RMFAC) to distribute revenue from extractive resources. While the lion’s share of these funds goes to the Federal government, local governments receive only a marginal portion, sparking concerns about transparency, accountability, and ensuring that these resources benefit local communities.
The Africa Centre for Energy Policy (ACEP) recently convened a crucial stakeholder dialogue that brought together key participants from the media, civil society organizations, and government agencies. The primary objective of this engagement was to assess the implementation shortcomings in the distribution of the 13% derivation in Nigeria’s extractive industry and to devise strategies to mitigate these issues. Furthermore, the forum aimed to strengthen advocacy efforts focused on subnational transfers within the extractive sector. This significant stakeholder gathering occurred on October 3 and 4, 2023, at the Stratton Hotel in Asokoro, Abuja.
After extensive and enlightening discussions, it became evident that amending Nigeria’s constitution to grant Local Governments more independence is crucial. Such an amendment would ensure that a portion of the revenue is directly allocated to the Local Government, bypassing the Federal Government as an intermediary. Additionally, there was a strong emphasis on the need for political leadership to demonstrate a commitment to implementing these amendments, thereby enhancing transparency and accountability.
The dialogue also highlighted a substantial leadership gap, necessitating proactive measures to address the situation. Moreover, the underperformance of Nigeria’s mining sector in generating significant revenue was attributed to political interference, making the sector unattractive to both domestic and foreign investors.
As the discussions continue, the participants are committed to maintaining ongoing dialogues on these issues and escalating their advocacy efforts to draw the attention of both the Federal and State governments. The ultimate solutions to these challenges rest within the authority of government officials. Therefore, they must recognize the importance of amending the constitution to establish Local Government autonomy and taking essential actions to attract investments to the mining industry and increase the revenue generated from this sector.