Daily Trust (Abuja)

31 December 2012

Nigeria: Derivation - How Oil States Shared N2.7 Trillion in 12 Years

The nine oil producing states have received a total N2.68 trillion as derivation funds in the past 12 years, official records available to Daily Trust have shown.

Based on provisions of the Constitution, states are entitled to 13 per cent of revenues derived from minerals exploited within their borders. As well as receiving the derivation fund on oil produced on their lands, littoral oil states also get the same percentage from oil derived within a certain distance offshore.

The oil states include the six South-South states of Rivers, Akwa Ibom, Delta, Cross Rivers, Bayelsa and Edo, as well as the two South East states of Imo and Abia, and the South-West state of Ondo.

Government records show that from May 1999 to December 2011, the nine states collectively received N2.68 trillion as 13 percent mineral revenue derivation.

The records show that out of this amount, the six South-South states with a combined population of 21.04 million got N2.466 trillion. Their population figure amounts to 15.13 per cent of the total Nigeria's population based on the 2006 Census records.

Rivers State has the largest chunk of the derivation funds with N777 billion, followed by Akwa Ibom with N575 billion, Delta N547 billion, Bayelsa N506 billion, Cross River N36.3 billion and Edo N23.1 billion.

The three oil-producing states outside the South-South region with a total population of 10.1 million got N214 billion within the period. The states are Ondo N134.4 billion, Imo N44.6 billion and Abia N36.2 billion.

Comparatively, findings show that the 19 northern states with total population of 73.8 million (53.13 per cent of Nigeria's population) got N1.5 million as mineral revenue derivation within the same period.

The six states of the North-Central got N1.09 million, which is the highest by any region in the North. These were shared as follows: Plateau N534,188; Nasarawa N363,486; Niger N69,430; Kogi N44,925; Benue N32,672; and Kwara N53,093.

For their part, the six North-East states got N311,000, shared as follows: Bauchi N130,691; Taraba N12,252; Adamawa N16, 336; Gombe N144, 355; while Borno and Yobe states got N4,084 each.

In the South-East, the three non-oil states got a total of N461,000 as mineral revenue derivation within the 12 years under review, as follows: Anambra N36,757; Enugu N212,374 and Ebonyi 212,374.

In the South-West, the other five states (except Ondo which produces oil) got N597,000 as their 13 percent derivation monies within the same period. They are Oyo N24,504; Ogun N289,972; Osun N24,504; and Ekiti N261,383.

Apart from the 13 percent derivation revenues, the oil producing states also rake in billions from the Federation Account in monthly statutory allocations.

The region also benefits from other interventionist agencies, like the Ministry of Niger Delta, Niger Delta Development Commission (NDDC) and the Amnesty Programme.

'Food is ready'

Commenting on this story, National Publicity Secretary of the Conference of Nigerian Political Parties (CNPP), Mr Osita Okechukwu, said these monies were mostly frittered away.

"The region unfortunately falls under the control of the ruling People's Democratic Party (PDP) for all these years. And the philosophy of the party is food is ready while its motto is let's share money. These monies do disappear as soon as they are shared," he said. He said the evidence of the funds is being seen only in the looting by some governors like convicted former Delta governor James Ibori.

"James Ibori is languishing in the United Kingdom prison courtesy of these huge billions he stole from Delta state coffers. (Former Edo governor) Lucky Igbinedion would have been in prison because of the same oil money if he were appropriately tried. (Former Bayelsa governor) Diepreye Alamieyeseigha was kicked out of office because of the same issue," Okechukwu said.

He added that despite these trillions, "the oil producing region is still trapped in crisis of development which is in tandem with the Federal Government's style under the PDP. The monies are there but with no single completed road project, no stable electricity, bourgeoning unemployment, absence of a modern rail line, dilapidating education system, among others."

Last week, elder statesman Edwin Clark accused governors of the oil states of mismanaging up to N7.3 trillion over the past 13 years. Clark, a one-time information minister in the 1970s, said it was regretful that even though these funds were meant for the development of oil producing areas, those communities have little to show for it.

Clark questioned the allocation of these funds through the state governments, saying section 162 (2) of the constitution which provides for the payment of derivation fund did not say that the payments should be made through any state government.

He said the fund was created to address infrastructural deficit and neglect of the oil communities, and therefore urged for the direct payment of the funds to the communities as a way of bringing development to them faster.

Imo State had responded to Clark's allegations. Spokesman for Governor Rochas Okorocha, Mr. Ebere Uzoukwa, told Daily Trust on Thursday that Imo under Okorocha judiciously utilizes all funds that accrue to it.

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