13% Derivation: Eight states receive N6trn in 11 years – Report

By Michael Eboh Eight oil-producing states received N6.589 trillion from the Federation Account under the 13 per cent derivation principle, between 2009 and 2019, with little or no impact on the lives of citizens of the states, according to a report published by ACIOE Associates.

The report, obtained yesterday, following its release, at a webinar in Abuja, to key officers of the National Assembly and aides to the president and minister of Niger Delta Affairs, listed the states as Abia, Akwa-Ibom, Bayelsa, Delta, Edo, Imo, Ondo and Rivers.

In the report titled: ‘Impact of the 13% Derivation Fund in the Niger Delta’, ACIOE Associates stated that in the 11-year period, Abia, Akwa Ibom, Bayelsa, Delta, and Edo states received N55.87 billion, N1.33 trillion, N1.388 trillion, N1.16 trillion and N118.85 billion respectively, while Imo, Ondo and Rivers States received N1.28 trillion, N189.277 billion and N1.057 trillion respectively. However, the report, presented by Mrs. Funmi Adesanya, Project Lead, ACIOE Associates, noted that despite the huge fund allocated to the Niger Delta, its researchers found out that access to electricity remained minimal to people in the region; absence of potable drinking water; deplorable health care facilities; and poor educational infrastructure.

It stated that: “Most of the basic amenities that exist in the selected oil communities are provided by either joint venture partnerships between the Niger Delta Development Commission (NDDC) or Nigerian National Petroleum Corporation (NNPC) or the International Oil Companies (IOC), as part of their corporate social responsibility.

“This trend is more prevalent in states like Akwa Ibom, Bayelsa and Rivers States where the IOCs provide water, health, electricity supply and education facilities pursuant to Global Memorandum of Understanding (GMOU) agreements between the IOCS and the respective oil producing communities in the aforementioned States.

“There is also lack of a structured framework for commissioning infrastructure projects across the communities, which has left a number of oil producing communities with little or no infrastructure.” Speaking on the findings, Managing Director of ACIOE, Mr. Ekenem Isichei, declared that the findings of the report were corroborated by data obtained from the Office of the Accountant-General, the Nigeria Extractive Industries Transparency Initiative (NEITI), State Government Financial Statements, where possible and interviews with host community members.

Also commenting on the report, Special Assistant to the Minister of Niger Delta Affairs, Mr. Charles Achodo, called for an urgent clarification on the 13 per cent derivation principle to forestall further abuse and mismanagement of the funds to the detriment of oil-producing communities. He said:

“When 13 per cent is given, the governors share it among themselves. On the part of the Federal Government, they have done a poor job in terms of communication. It is supposed to clarify what the 13 per cent is meant for, if it is for the state or for the communities where the oil is produced from. “The Act made it so broad; it did not specify the issue. The Act needed to be clarified, that it is not meant for the entire state, but for the oil producing communities.

Taking the resources at that subsidiary levels would help achieve a lot at that level.” On his part, Senior Special Assistant to the President on Niger Delta Affairs, Office of the Vice President, Mr. Edobor Iyamu, said: “Most times, people fail to acknowledge that there are some monies that are paid to the state governments and not many people want to know how it is being spent. “A lot of money has been disbursed to the state governments, even though we know a lot more still needed to be done in the region.”

Also, Chairman, House Committee on Environment, Honourable Johnson Oghuma, highlighted the need to increase the derivation from 13 per cent, noting that the review was long overdue. “Also, there is the need to amend the law, as we are disbursing the money properly. The fund also needed to be policed to ensure effective utilization. There is need to review the law and the percent, and there should be a way to capture and police what is going in.

The host communities should be the focus,” he explained. In its recommendations, the report advocated the legislation of fiscal rules to improve transparency and accountability of public expenditure as practiced in Ghana and Uganda. Such rules, it noted would bother on uniform vertical transfers of derivation funds to curb the practice of discretionary transfers currently practiced by Niger delta States; and the prescription of adequate budget preparation procedures that ensures a proper needs assessment of the intended beneficiaries are carried, ahead of prospective budget implementations.

It added that it would also bother on the development of resource allocation criteria that are ‘downwardly accountable’, particularly to the intended beneficiaries of the derivation funds; consistent publishing of fiscal information and ensuring access to such information; and earmarking a considerable proportion of the derivation funds for specific sectoral development such as health, education, facilitation of portable water, among others.

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