ABUJA—REVENUE Mobilisation, Allocation and Fiscal Commission (RMAFC) and the Accountant-General of the Federation yesterday asked a Federal High Court sitting in Abuja to dismiss a suit by the Delta State Government challenging deduction of N7.8 billion from its monthly statutory allocation. They cited want of competence and litigable course of action as reasons.
The deduction, now a subject of litigation at the High Court, followed alleged overpayment of 13 per cent derivation fund by the Federal Government into Delta State coffer between June 1999 and February 2003. According to the RMFAC and the AGF, the alleged overpayment was detected during computation of allocations as it related to 13 per cent derivation for all the littoral states.
The computation was premised on “production quantum” from each of the oil-producing states, a formula that was well-known and well-accepted by the states concerned including Delta State in the sharing of the 13 per cent derivation funds.
They contended that it was not only Delta State that was found to have been overpaid during the computation but also four other littoral states while four other oil producing states were detected underpaid. According to them, the four states underpaid were pushing for the restoration of their allocations mistakingly overpaid to their sister states.
They further said that instead of Delta State to demand the indices of computation of the controversial overpayment, it came to court to challenge the proposed deduction, adding that it was only Delta, of all the nine oil-producing states affected, that came to court to “challenge the excellent and commendable exposure and its fall-out.”
Inviting the court to consequently discountenance the prayer of Delta State, the duo said “the deduction is to avert financial anarchy, economic disequilibria, financial irresponsibility and possible break-down of law and order in the country.
Besides, they maintained: “The demand on Delta State is constitutional, fair, just, equitable and in line with the principles of accountability, transparency, peaceful co-existence, public policy, honesty in business, live and let live, give and take and overall good governance of Nigeria.”
The Office of the Accountant General of the Federation had indicated, via a memo, that the controversial N7.8 billion overpayment to Delta State was to be deducted at six instalments. Each instalment, by the calculation, totals N1,311, 544, 901.01k
But the Delta State government in its suit before Justice Jonah Adah of the Federal High Court, Abuja is contending that the claim by the Federal Government in respect of the overpayment issue was a ruse. According to it, the state government was at no time overpaid as being claimed by an agency of the Federal Government —Revenue Mobilisation, Allocation and Fiscal Commission— which recommended the refund to the Minister of Finance.
Narrating its travail, Delta State government said sometime in June 2004 during the Federation Account Allocation Committee meeting (FAAC), a document entitled: “Exposure of under payments and overpayments arising from the sharing of 13 per cent derivation fund from June 1999 to February 2003” was circulated by RMFAC to the oil producing states that were in attendance at the said meeting wherein it was claimed that Delta State government was overpaid to the tune of N7.8 billion. According to the statement of claim, a letter dated July 1, 2004 was written to the Finance Minister, protesting the claim.
In reaction, a meeting was called with all stakeholders in attendance and the issue was thoroughly discussed with the parties in the matter promising to maintain the status quo pending its resolution. But to its dismay and in a sudden twist, Delta Government contended that at a meeting held on August 3, 2004 in Abuja, both the Accountant General of the Federation and the Finance Minister insisted that the implementation of the monthly revenue deduction of alleged overpayment of 13 per cent derivation fund would commence without any inhibition from middle of August 2004.
Although a report allegedly issued by the National Boundary Commission over the matter justified the monthly allocation remitted into the coffer of the state government during the period, Delta government said it expressed worry over the threat to carry out the decision commencing deduction.
It queried that even if the Federal Government should insist on the refund, it had to show the basis or indices used in arriving at such request for refund in line with the provision of the law, stressing that government “has no power to alter, change or amend the existing revenue sharing formula or indices or make a retrospective demand on it of any sum representing overpayments.
Praying the court to intervene, Delta State government said should the Accountant General of the Federation carry out the decision, “Delta State government will be handicapped in honouring existing contractual obligations to its numerous contractors and where it decides to honour same, payment of salaries of workers will be suspended or remain unpaid.”
Explaining further, it said the purported N1, 311,544,901.01k decided to be deducted constituted one third of its monthly allocation, saying it would leave the state government with less than N2 billion as balance from the federation allocation, thereby upsetting its 2004 Appropriation and causing serious social, economic and political consequences for the state. It added that Delta State government would suffer untold hardship which could not be compensated in monetary terms if the Federal Government was not restrained
Consequently, the Delta State government is specifically asking the Federal High Court to declare as unconstitutional, arbitrary, null and void a demand for the refund of the alleged overpayment of N7.8 million by the Federal Government. It also wanted the court to issue an order of perpetual injunction restraining the Federal Government from making the deduction.
The court, however, directed all parties in the suit to file and exchange briefs within seven days with the main issues for determination set down in their briefs.
