Derivation Fund: Oil Communities Allege N7tn Misappropriation

Oil-producing communities in five states of the federation have accused their respective state governors of misappropriation of about N7.282 trillion. It was alleged that the governors received the amount as payments for the 13 per cent derivation for the past 13 years. The states include: Akwa Ibom, Rivers, Edo, Bayelsa and Ondo

The communities, in a joint letter to the Nigerian Extractive Industries Transparency Initiative (NEITI), appealed to the agency to support their efforts to halt the illegal and unconstitutional payment of 13 per cent derivation into any state government account. They maintained that: “The illegal and unconstitutional payment of 13 per cent derivation fund through the state governments have left the actual oil and gas producing communities in abject poverty. The situation has caused monumental fraud against the oil and gas producing communities.

The communities also charged NEITI to visit the oil and gas communities to undertake physical audit in order to see the degree of poverty, lack of infrastructure and means of livelihood as well as the level of devastation, environmental degradation, pollution and health hazard while carrying out the financial audit on the 13 per cent derivation.

Oil Communities want Derivation Board established

Oil producing communities in Delta State have petitioned the Chairman, Revenue Mobilization Allocation and Fiscal Commission (RMAFC), demanding among other things, that a derivation board whose members will be recommended for appointment by the President on the advice of the leaders of oil and gas communities be set up.

The communities also demanded that the 13 percent derivation fund accruing to the federation account directly from any natural resources be paid as first line charge from the federation account to the communities.

The oil producing communities said in a letter signed by elders from six oil producing states including, Edo, Ondo, Akwa Ibom, Rivers, Delta and Bayelsa states said that the proposed derivation board should be comprised of an executive chairman, secretary and members including a member from RMAFC . They added that the chairmanship should rotate among oil and gas producing states every four years. They also insisted that the 13 per cent Derivation Fund currently being managed by the State Governors in the oil and gas producing states was an aberration, adding that the Fund had been managed without regard to the oil and gas producing communities who are owners of the Fund.