Former Gov Ifeanyi Okowa
Agency report
The nine oil producing states shared N544.9 billion from the federation account, through the 13 percent derivation formula, in the first half of 2023.
National Bureau of Statistics (NBS) data showed that Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers were states that received the funds.
The 13 percent derivation fund comes from the federation revenue to oil producing communities through the state governments, as enshrined in section 162, sub-section 2 of the constitution.
Analysis of the report by TheCable Index showed that Delta state received the highest allocation totalling N180.1 billion, representing 33 percent of the total revenue from the derivation account.
Delta is followed closely by Akwa Ibom, having received N130.8 billion, representing 24 percent of the total disbursement.
Other states include Bayelsa (N92.9 billion), Rivers (N92.7 billion), Edo (N17.5 billion), Ondo (N16.9 billion), Imo (N6.2 billion), Abia (N2.4 billion), and Anambra (N5.4 billion).
The 13 percent derivation fund differs from the three percent provided for host communities in the Petroleum Industry Act (PIA), from the oil companies operating expenses (OPEX).
Yet Delta has a domestic debt of N465.4bn and infrastructure decay
In 2022, Delta and Akwa Ibom were the oil producing states that received the highest amounts from the federation account, with Delta receiving N296.63 billion and Akwa Ibom receiving N222.52 billion.
In a controversial comment last year, Nyesom Wike, former governor of Rivers, said President Muhammadu Buhari had approved the payment of funds owed to states in the Niger Delta since 1999.
According to Wike, the money approved by Buhari were funds owed from the 13 percent derivation, which he said had significantly aided his infrastructural strides in the state.
Although oil producing states receive 13 percent of the revenue from oil production, they still have a lot of debt and their infrastructure is in poor condition.
For example, as of Q2 2023, Delta state has a domestic debt of N465.4 billion, Rivers has a debt of N225.5 billion, Imo has a debt of N220.8 billion, and Akwa Ibom has a debt of N199.6 billion.
In February, Edwin Clark, an Ijaw national leader and convener of the Pan-Niger Delta Forum (PANDEF), asked Ifeanyi Okowa, the immediate past governor of Delta, to spend more of the 13 percent derivation funds on oil producing communities.
Clark, in a statement on Thursday, alleged that the 13 percent derivation funds received by the state government were mismanaged.
He described Okowa’s administration as a “reign of unaccountability”.
Clark said the state government has not spent the derivation funds on foremost areas and projects but on “favoured areas”.
The elder statesman argued that the funds ought to be spent on oil producing communities’ schools and projects in the state.
He also asked that records of the funds be released to the public.
Source: TheCable
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