Key points
• Niger Delta Civil Society Forum calls for establishment of a Presidential Board to manage the 13% derivation fund.
• Group argues fund is constitutional and separate from provisions of the Petroleum Industry Act (PIA).
• Stakeholders raise concerns over accountability, transparency and alleged misallocation of derivation revenues.
Main story
Civil society stakeholders in the Niger Delta under the aegis of the Niger Delta Civil Society Forum have called on President Bola Ahmed Tinubu to establish a Presidential Board to oversee the administration of the constitutional 13 per cent derivation fund, citing the need for improved accountability and direct developmental impact in oil-producing communities.
The group appealed in a statement signed by its Coordinator, Mr Ezekiel Kagbala, on Monday, stressing that reforms in the management of the fund had become necessary to address concerns around transparency and effectiveness in the region.
According to the Forum, the 13 per cent derivation principle remains a constitutional provision distinct from the Petroleum Industry Act (PIA), which it said serves a different legal and administrative purpose.
The group argued that confusion between both frameworks has contributed to inefficiencies in the utilisation of funds meant for oil-producing states and communities.
The issues
The Forum maintained that the derivation principle is enshrined in Section 162(2) of the 1999 Constitution (as amended) and is intended as compensation tied directly to oil production in host states.
It further explained that while the Petroleum Industry Act provides for three per cent of operating expenditure for host community development, it does not replace or reference the 13 per cent derivation fund.
The stakeholders expressed concern that the current structure for managing derivation revenues has exposed the funds to what they described as elite capture, misallocation and growing dissatisfaction among communities in the Niger Delta.
They also criticised interpretations suggesting that the PIA addresses the needs of oil-producing communities in place of constitutional derivation entitlements, describing such claims as misleading.
What’s being said
The Forum stated that it is “an unparalleled absurdity” to divert statutory funds meant for host communities and assume that the Petroleum Industry Act has replaced constitutional provisions on derivation.
It further questioned the understanding of relevant regulatory bodies regarding the legal foundation of the fund, insisting that the derivation principle remains clearly distinct from provisions of the PIA.
The group maintained that the fund is compensatory in nature and should directly benefit oil-producing communities without unnecessary bureaucratic bottlenecks.
What’s next
The Niger Delta Civil Society Forum is urging the Federal Government to consider establishing a dedicated Presidential Board to oversee the allocation and utilisation of the derivation fund.
The proposed structure, according to the group, would ensure transparency, strengthen oversight mechanisms and guarantee that funds are directed towards measurable development outcomes in oil-producing areas.
Bottom line
The renewed call for reform in the management of the 13 per cent derivation fund highlights ongoing tensions over resource allocation in the Niger Delta, with civil society actors insisting that stronger oversight is necessary to ensure that constitutional benefits translate into tangible development for host communities.
