"Be clear on royalty-sharing with cultural institutions"

...[The] Public Finance Bill, 2012...provides for sharing of royalties. This will determine how revenues from royalties will be distributed and shared with local governments and cultural institutions. The Bill proposes that seven percent of the royalties from oil and gas will be shared with districts located in the petroleum producing areas. It also provides that the districts may share part of this royalty with cultural institutions within the districts...But the provisions on royalties, if not properly handled, will cause conflicts between the recipient districts, or even between those districts and their local governments and between districts and resident cultural or traditional institutions...According to the Bill, the cultural institution will access such funds after the district has resolved to give the funds to the cultural institution. This resolution has to be approved by the Minister of local government after consulting the Minister in charge of culture. This means even when the district wants to give a share of royalties to the cultural institution, such a share can only be given if the two ministers agree...Finally, by sharing royalties with only districts, government is bound to leave out other autonomous and semi-autonomous local governments within the oil producing areas. For example, sharing with districts will leave out sharing the same resources with cities and municipalities which according to the Local Government Act are self-accounting bodies that receive funds directly from central government and are not technically under districts. Parliament should therefore make it clear that all self-accounting local governments located in the oil districts are entitled to a share of royalties from oil and gas as well.