The newly appointed members of the Revenue Mobilisation Allocation and Fiscal Commission at an emergency plenary session in Abuja have suspended special concession granted to Bayelsa State for derivation fund from three oil wells.

The special derivation fund was approved by President Goodluck Jonathan, who is himself from Bayelsa State.

The decision to suspend the special monthly grant which has so far accrued over N15 billion into the account of Bayelsa State in the last three month was due to series of complaints and requests from other stakeholders including oil producing states, Economic Confidential, the online economic journal reports.

The emergency meeting which was chaired by the new chairman of the Commission, Engr. Elias Mbam with full attendance of other members was held on December 30, 2010, a day before another emergency meeting of the Federation Account was held where a total sum of $1 billion was shared to three tiers of government.

The N15 billion that had accrued to Bayelsa within the period was over and above what would normally have accrued to it before the concession was granted in August 30, 2010 by the Presidency.

The decision to suspend further payment of the so-called special concession and compensation was for equity, fairness and justice as various states are laying claim to similar agitations of having oil well beyond the 200 metre isobaths offshore, including Lagos and Ogun states.

A special committee is said to be set up by the Commission to consider the problems and complaints from other states before any further actions could be taken.

The presidential concession granted to Bayelsa State made the state to earn derivation fund from oil wells lying beyond the 200-metre isobaths, an action that is in breach of the Offshore/Onshore Dichotomy Abrogation Act 2004 in the application of the 13 percent derivation principle.

The recommendation to the President for the special concession was engineered by some agencies of government which include the National Boundary Commission, Office of the Accountant General of the Federation and the Revenue Mobilisation Allocation and Fiscal Commission, the online magazine reported.


Following the approval of President Goodluck Jonathan on August 31, 2010, Bayelsa State is now the leading oil producer and highest recipient of derivation funds among the oil producing states. Based on the new indices that favours the state, at the Emergency meeting of the Federation Account Allocation Committee on the eve of the new Year (December 31, 2010) where a total sum of $1 billion was shared, from the derivation component alone which did not include other factors, Bayelsa State received $40mn, followed by Akwa Ibom $30m, Rivers $28m, and Delta $21m. Other recipients from derivation funds include Ondo $4m, Abia $1.3m, Imo $1,26m, Edo $1.2m and Cross River $1m.

The RMAFC is constitutionally empowered to determine the remuneration packages of public officers as well as revenue allocation to all tiers of government including indices for the disbursement to each states and local councils in the country.

Spokesperson of the RMAFC, Mrs Theodora Onyebuchi said she was aware of the meeting but could not confirm if the concession was suspended.