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.

Seven states to refund N17.5 billion to Rivers State

Seven states have been ordered by the Federal Government to refund N17.5 billion to Rivers State. The amount, it was learnt, represents the sum the affected states, namely Akwa Ibom, Delta, Bayelsa, Imo, Edo, Abia and Ondo had received as part of their 13 percent derivation revenue from two oil wells, which the Rivers State Government had successfully proved belong to it.

The Federal Government ordered the refund to Rivers State, following a protest by the state that its revenue from the affected oil wells located in respect of Nda and Okwori oil fields with effect from 2007 had been shared to oil producing states by the Federal Government. In response to the directive, Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, wrote the Accountant General of the Federation, Mr. J.O Otunla on January 17, 2012, to effect the reduction of the money from the allocations of the seven states with immediate effect.

13% oil derivation should be spent on host communities – RMAFC

The Chairman of the Revenue Mobilization Allocation and Fiscal Commission, Engr. Elias N. Mbam, has stated that the 13 per cent derivation from monthly allocation paid to oil-producing states should be exclusively spent on oil-producing communities. Mbam said this should be the case because the oil- producing communities suffer most from the impact of environmental degradation occasioned by oil exploration in their domain.

Mbam observed that the clarification became necessary in view of the fact that a larger percentage of the 13 per cent derivation fund meant for the development of host communities is unjustifiably spent in the development of state capitals and other urban centres thus negating the principle behind derivation.

Mbam lamented that the law establishing States and Local Governments Joint Account is an encumbrance on the successful operations of the 13 per cent derivation principle since the law confers absolute control of the Fund on governors rather than local council chairmen who govern the host communities.