13% derivation: Oil communities fault payments into state govt accounts

The-Minister-of-State-for-Finance-Dr-Yerima-Ngama[1]Oil and gas producing communities in Akwa Ibom state have joined their voices in calling for payment of 13 per cent derivation direct to the communities, saying that their demands are within the confines of the law of the land.

In a memo to the Chairman, Revenue Mobilisation, Allocation and Fiscal Commission, RMAFC, in Abuja, the communities affirmed that the provisions of the 1999 constitution of the Federal Republic of Nigeria is clear enough on where to pay the 13 per cent fund to.

The letter was signed by 13 leaders of the oil and gas producing communities namely: Awawa Eka-Enang, Mr. Iniobong Willie, Prince Benhur Oduenyie, Chief Unanaowo Akpan, Elder Ufort Udo, Sunday Okon, Mr. Ibanga Asuquo Bassey, Mr. Stanley Etim, Obong Sebastian Okon, Hon. Chris Abasi-Eyo, Chief Ime Jack, Engr. Kevin Ibok and Edet Daniel.

“We insist on the provisions of Section 162 sub section 2, which states that provided that the principle of derivation shall be constantly reflected in any approved revenue formula, as not less than 13 per cent of the revenue accruing to the Federation Account directly from any natural resources. We do not need an amendment of the constitution for administrative implementation of that provision.

“From that provision of the constitution, it is clear that 13 per cent derivation fund is theorist line charge of the Federation Account. The fund is prior to any revenue formula, it exists before any revenue formula, the group said, insisting that the amount due to 13 per net derivation fund is constitutionally set aside before any FAAC meeting to share the balance of the total oil revenue of 87 per cent.

According to the statement, the group is of the view that RMAFC has no right to send the 13 per cent derivation fund through any state government account, who is the third beneficiary of the Federation Account. They alleged that for 13 years, the governors of oil producing communities have received the 13 per cent derivation fund meant for the development of oil and gas producing areas, but have used the funds to develop their state capitals and non oil producing communities, leaving the actual oil and gas producing communities in abject poverty, hunger and penury.

They also noted that before the 1994/95 constitutional conference, the proceedings of derivation fund made available for the oil and gas producing communities was minimal.

“In 1982, it was 1.5 per cent of the total revenue. It is pertinent to, state that the Revenue Act 1 of 1982 made provision of 1.5 per cent derivation fund for the development of Mineral Producing Areas of a Nigeria.

“The derivation fund of 1.5 per cent was administered and managed through administrative committee system by the Federal Government and not the state governments. It is therefore surprising that RMAFC decided to pay the 13 per cent derivation into state government accounts when there is enough evidence from past administrative records and law that derivation fund is a Federal government matter,” they said.


Information from Vanguard was used in this report.



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