Those who wonder why talks of 'underdevelopment' in the south-south, and in the Niger Delta region in particular, still linger despite the unprecedented amounts of revenue that governments in the area get, thanks to a controversial derivation law, should look no farther than governors of the states concerned for explanation.

That, in effect, is the conclusion of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC). By law, the commission should know, because it is expected to be abreast of the paper trails of all transactions involving federal funds and their allocation, and how these are spent by the tiers of government. It was on that basis that the commission last week accused states in the region of misusing oil derivation funds.

This is a serious charge that requires federal intervention to establish the facts. There is an ongoing debate on the 2004 law that abrogated the onshore-offshore legislation on oil revenue and how this is shared among the federating units. The RMAFC's new revelations regarding the profligacy of states in the Niger States is appropriate reference point to take a closer look at what state governors are spending the funds on.

The RMFAC chairman, Mr Elias Mbam, said at a reception in Abuja for traditional rulers from the states in the Niger Delta, that the outcry of neglect by host communities of oil exploration in the region was because governors were not spending money to develop such communities, the objective of the derivation fund.

Indeed, Mr Mbam noted that these communities were being deprived of the resources needed to tackle the environmental degradation that exploration and exploitation expose them to.

'The 13 per cent derivation from monthly allocation extended to oil producing states ought to be exclusively spent on oil producing communities, as being hosts, they suffer most the impact of environmental degradation occasioned by oil exploration in their domain', Mr Mbam observed.

13 per cent of total oil receipts of the federation is a huge amount of money, calculated monthly and separated from the general allocation from which the other parts of the country benefit. This is handed over to nine oil producing states, currently listed as Bayelsa, Akwa Ibom, Rivers, Delta, Imo, Abia, Ondo, Edo and Cross River. The latter lost its littoral status, and hence its share of the derivation funds, following Nigeria's ceding of the Bakassi Peninsula, formerly part of the Bakassi local government in Cross River State, to Cameroun, in accordance with the 2002 ruling of the International Court of Justice (ICJ). Last week, President Jonathan said Anambra had qualified to be an oil producing state because two oil wells straddle it; Ebonyi and Kogi states are now also demanding to be accorded the same recognition.

But where is all the derivation money going?

According to the RMAFC, 'a larger part' of the money allocated to beneficiary states is not 'properly' utilised by the state governors. Instead of utilising the money for what it was meant, the governors 'unjustifiably' commit it to developing state capitals.

This practice, Mr Mbam said, was a negation of the principle of derivation, which he said was in fact a form of reparation to host communities for the loss of productive agricultural land due to oil exploration activities. But Mbam's proffered solution, that local government councils of host communities should seek amendment to the law to remove state governments from joint accounts with councils, does not address the problem in a holistic manner. The status of local governments in the 1999 Constitution needs to be enhanced by making them really autonomous and not be beholden to state governors.

The agitation for a revisit of the onshore-offshore abrogation Act is weak without a requirement that the new law should stipulate that local councils in oil producing communities get the lion share of the derivation fund.

Beyond that however is the unresolved issue of governors 'misusing' the derivation funds; there is a need for some accounting to be done and where there is a breach of the law, those responsible should be subject to prescribed penalties. The statement credited to Governor Emmanuel Uduaghan of Delta State yesterday that a total of N149 billion was released to oil producing communities in the state for development projects in the last five years, without providing details of how much it received during the period, does not represent a complete rebuttal of RMAFC's account; it reinforces the need for further and proper inquiry.