Leadership (Abuja)

7 September 2012

Nigeria: 13 Percent Oil Derivation Belongs to Host Communities - RMAFC

Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) Engr. Elias Mbam has said that the 13 per cent derivation from monthly allocation extended to oil-producing states ought to be exclusively spent on oil-producing communities who suffer most from the impact of environmental degradation occasioned by oil exploration in their domains.

Mbam said the clarification became necessary in view of the fact that a larger percentage of the 13 per cent derivation fund meant for the development of host communities is unjustifiably spent in the development of state capitals and other urban centres, thus negating the principle behind derivation which serves as reparation to the host communities whose land and water resources are devastated by oil exploration activities.

The RMAFC boss, who made the clarification yesterday when he received a delegation of traditional rulers from Delta State on a courtesy call, however, lamented that the law establishing States and Local Governments Joint Account is an encumbrance on the successful operations of the 13 per cent derivation principle since the law confers absolute control of the fund on governors rather than local council chairmen who govern the host communities.

He therefore sought an amendment to the States and Local Governments Joint Account Law to allow local government councils take direct control and administration of all funds meant for them, adding that the ongoing review of the revenue allocation formula would also address some of the grievances of beneficiaries of the Federation Account in a just, fair and equitable way.

Mbam said that since local council chairmen are closer to the grass roots, they can be held accountable by local communities, and, when the host communities are well developed, the local people would jealously guard oil facilities against vandalism as they take pride of ownership.

In his remarks, leader of the delegation Chief Wellington Okrika, CON, the Bolowei of Gbaramatu Kingdom, accused governors of the oil-producing states of under-utilisation of the 13% derivation fund, noting that most development projects are concentrated in the state capitals instead of the host communities which are supposed to be direct beneficiaries.

Okrika called on RMAFC to support the establishment of an independent body to administer the 13% oil derivation fund so as to ensure its full utilisation for the maximum benefit of host communities.

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