Over N6trn received from 13% derivation fails to lift Niger Delta – report

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The over N6.589 trillion received by eight oil-producing states from the Federation Account under the 13 percent derivation principle, between 2009 and 2019, has little or no impact on the lives of citizens of the states, according to a report published by ACIOE Associates.

The report was obtained 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. The affected states include Abia, Akwa-Ibom, Bayelsa, Delta, Edo, Imo, Ondo and Rivers.

In the report titled “Impact of the 13 percent Derivation Fund in the Niger Delta’, the 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.

The report presented by 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, while absence of potable water, deplorable health care facilities, and poor educational infrastructure continue to afflict the region.

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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 (IOCs), 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.

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“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, Ekenem Isichei, managing director of ACIOE, 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, and interviews with host community members.

Also commenting on the report, Charles Achodo, special assistant to the minister of Niger Delta Affairs, called for urgent clarification on the 13 percent derivation principle to forestall further abuse and mismanagement of the funds to the detriment of oil-producing communities.

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He said: “When 13 percent 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 percent is meant for; whether it is for the state or the communities where the oil is produced.

“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 level would help achieve a lot at that level.”

On his part, Edobor Iyamu, senior special assistant to President Muhammadu Buhari on Niger Delta Affairs, Office of the Vice President, 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.

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“A lot of money has been disbursed to the state governments, even though we know a lot more still need to be done in the region.”

However, Johnson Oghuma, chairman, House of Reps committee on environment, highlighted the need to increase the derivation from 13 percent, 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 needs to be policed to ensure effective utilisation. There is need to review the law and the percentage, 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 the Niger Delta States; and the prescription of adequate budget preparation procedures that ensures proper needs assessment of the intended beneficiaries are carried along, ahead of prospective budget implementations.

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