13% Derivation Fund Remains Unclear To Recipients

13% Derivation Fund Remains Unclear To Recipients

State governors that benefited from the 13 percent derivation fund from the federal account remain unclear on where the funds should be channeled, according to the Special Assistant to the Minister of Nigeria Delta Affairs, Charles Achodo.

Eight oil-producing states in Nigeria were recipients of more than N6.589 trillion from the federal government.

States that received the fund are Ondo, Abia, Edo, Imo, Akwa Ibom, Rivers, Delta and Bayelsa.

In a report titled, ‘Impact of the 13 percent Derivation Fund in the Niger Delta’ by ACIOE Associates, an advisory services firm, the disbursed fund has made little to no impact in the communities that it was allocated to.

The report read, “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.”

Weighing in on the report, the Special Assistant to the Minister of Nigeria Delta Affairs, Charles Achodo, said that the 13 percent received are usually shared among governors.

He stated, “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.

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“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.”

What is the 13 Percent Derivative Fund?

In order to assist the growth and development of oil-producing communities, the 1995 Constitutional Conference proferred the sharing of the Federal Account Revenue, of which 13 percent is set aside for oil-producing states.

According to Waado, “The intention was very clear – to financially empower the oil-producing states of the Niger Delta to tackle the monumental neglect and degradation of the area given the lack of federal presence and ineffectiveness of federal spending in the area.”

According to the report between 2009 and 2019, each state received: Abia, N55.87 billion; Akwa Ibom, N1.33 trillion; Bayelsa, N1.388 trillion; Delta, N1.16 trillion; Edo, N118.85 billion; Imo, N1.28 trillion; Ondo, N189.277 billion, and Rivers, N1.057 trillion.

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Kindness Udoh is a writer and media enthusiast with vast experience in journalism, copywriting, and features across beats. He also has professional certifications in creative writing. You can reach him via [email protected]

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