Court Halts Sharing Of Derivation Shortfall To Oil Producing States

A Federal High Court sitting in Abuja has ordered the office of Accountant-General of the Federation not to disburse over a trillion naira shortfall due to oil producing states pending the determination of a suit before it.

The court presided over by Justice A R. Mohammed, gave the directive on Friday while ruling on an ex parte application by the Imo State Government.

It held that distribution of the shortfall without indices from the Revenue, Mobilisation, Allocation and Fiscal Commission (RMAFC) would be injurious to Imo State.

The court, therefore, asked the applicant (Imo State) to join other oil producing states as respondents to the suit. It consequently fixed June 15, 2022, for hearing of the motion on notice.

Imo State Attorney-General and Justice Commissioner COC Akaolisa had in the suit marked FHC/ABJ/CE/415/2022 queried the attempt by some of the oil producing states to have the shortfall shared without unambiguous indices from the RMAFC as provided for in the 1999 Constitution.

In his submission before the court, counsel to the applicant, Chief Olusola Oke, argued that his client needed to be protected by the court pending the determination of the suit.

Our correspondent gathered that a committee of experts recently unearthed the shortfall, a development that allegedly prompted some states to embark on subterranean moves to either have it diverted or shared on an unequal basis.

His words: “The governors of oil producing states reported to the Presidency and the Federal Government calculated and recalculated and at the end of the day saw that there was over a trillion naira that was omitted in the allocation to the oil producing states.

“The Presidency agreed to allocate that money to the states, but in calculating what was due to each state, I think some states went to influence the revenue agency to allocate more money to them than they deserve and reduce that due to Imo State.

“A situation where Rivers and Edo states were getting over N200billion, Imo was getting only N16billion. So, our government said no; it is not possible and from the analysis of what we are supposed to get, we were told by our experts in that calculation that we were not supposed to get less than N100billion.

“We went to court to restrain the revenue allocation from releasing that fund because if it is done, it cannot be called back.

“ But the people in other states are trying to be fast. They are trying all they can for Central Bank to release the money to them but we have succeeded in serving the court papers to them and putting a hold on the money (shortfall)..”