Tension mounts in N’Delta over derivation fund

Jonathan and Minister of Petroleum Resource, Mrs. Alison Madueke

The clamour by host communities in the Niger Delta region for direct payment of the derivation fund seems to be gaining momentum. We examines the issue

 There is tension in the oil rich communities of the Niger Delta region over the allege, mismanagement of the 13 per cent oil derivation fund by their state governments.

Already, the community leaders are leading the agitations for direct payment of the fund to the communities. They are taking the protest to the presidency and key government agencies with a view to ensuring that the anomaly is corrected.

For instance, leaders of core Ijaw oil-producing areas of Egbema, Gbaramatu and Ogulagha Kingdoms in Delta State have threatened to shut down oil flow stations if the issue is not resolved.

The position of the three communities was contained in a letter to President Goodluck Jonathan signed by 28 chiefs and members from each of the communities.

In the letter, a copy of which was obtained by our correspondent on Friday, they said urgent intervention was needed to avoid a crisis that could lead to the closure of the flow stations in their communities.

This, they noted, became imperative since the amount did not belong to the state, as it was not part of the money that should have been credited to the state’s consolidated revenue fund account.

The letter read in part, “Thirteen per cent derivation fund is not part of any consolidated revenue of state governments; it is not part of any state allocation.

“The fund is a benchmark for revenue allocation for host communities in Nigeria.

“It is therefore illegal to allocate 13 per cent derivation fund through a third party to the host communities.

“However in Delta, Edo, Ondo, Imo and Abia states, oil commissions have been created through which a percentage of the 13 per cent derivation fund is paid to the host communities by the state governments as a third party.”

It added, “This procedure and process has allowed the state governors to take over full control of the resources of these oil communities to the exclusion of the host communities.

“In Delta State, the situation has been so embarrassing and has come to a boiling point where the host communities have been driven to the wall.”

Similarly, community leaders from six oil producing states of Edo, Ondo, Akwa Ibom, Rivers, Delta and Bayelsa have joined the league of agitators following their petition to the Revenue Mobilisation, Allocation and Fiscal Commission.

In the petition, they specifically demanded the setting up of a derivation board to manage the 13 per cent revenue accruing to oil producing states from the federation account.

They said members of the board would be recommended for appointment by the President on the advice of the leaders of oil and gas communities.

The petition, a copy of which was also made available to our correspondent was signed by Mr. Wole Abel (Ondo), Mr. Monday Aghaghe (Edo), Mr. Ufot Nkang (Akwa Ibom), Mr. Machperson Kurobo (Bayelsa), Chief Harry Okpaks (Rivers) and Chief Willam Igere (Delta).

The letter also stated that, “We demand that 13 per cent derivation revenue accruing to the federation account directly from any natural resources be paid as first line charge from the federation account to the oil and gas producing communities through a national derivation board whose members shall be recommended for appointment by the President on the advice of leaders of oil and gas communities.

“The national derivation board will have and executive chairman, secretary and members including a member from the Revenue Mobilisation Allocation and Fiscal Commission. The chairmanship of the national derivation board should rotate amongst oil and gas producing states every four years.”

As regards the state and local government joint account, the community leaders in the letter pointed out that the position of the law was clear on this issue.

They argued that under the constitution, the 13 per cent derivation fund was not supposed to be paid into the state and local government joint account as it was currently being done.

Supporting the argument, a statement issued after a meeting with traditional rulers, their chiefs, women and youths from Akumazi, Umunede, Ute-okpu, Ute-erume, Ute-Ogbeje, Ekuku-Agbor, Nsukwa, Olodu, Ewuru, Idumuesah and Ejeme communities, said the provision of the law must be respected.

It said, “The fund is a constitutional matter that must be implemented for the full benefit of the people of the oil and gas communities.

“The oil and gas producing communities fought for it during the 1994/95 constitutional conference. During 1999 constitutional draft committee, the oil and gas communities fought again to ensure that it enshrined in the 1999 constitution. The constitutional provision is very clear.”

Following increasing complaints and agitation by the communities over alleged misuse of the fund by governors, President Goodluck Jonathan had directed an audit of all oil revenues, including the 13 per cent derivation fund disbursed through the Federation Account in order to ascertain the utilisation of the fund.

The Nigeria Extractive Industries Transparency Initiative had been named to conduct the audit.

The purpose of the audit, which is expected to be completed within nine months, is to determine how oil revenues are applied to entities such as Niger Delta Development Commission, Petroleum Trust Fund, and the 13 per cent derivation revenue allocated to some oil producing states.

In addition, the planned audit will determine how other monetary and fiscal transactions in the sectors have been conducted or utilised during the period under review.

The development was confirmed by a member of the NEITI Stakeholders Working Group, Mrs. Faith Nwadishi.

She said the planned audit was to ensure that the nine-month timeline set by the Federal Government for the completion of the audit was met and assured of NEITI’s full support for the proposed exercise.

She said, “It is part of our statutory mandates in the extractive industry in line with the FEC decision; it is an exercise we are committed to and everything is being done to ensure its success.”

But reacting to the announcement of the planned audit in a statement signed by their respective state representatives, such as William Igere (Delta); Pastor MaacPherson Kurobo (Bayelsa); Harry Opaks (Rivers); Saviour James Okon (Akwa Ibom); Princess Nomwen Uhunmwunagho (Edo) and Samuel Ebiwanno (Ondo), a copy which was made available to our correspondent, the communities appealed to NEITI to interface with the oil and gas producing communities in their audit and investigation of the 13 per cent derivation fund.

It said, “We wish to affirm in very strong terms that any report or audit investigation without physical visit to the communities hosting oil facilities is unacceptable to the communities.

 “The state governments, which received this money illegally, used the fund to develop their state capitals and non-oil and gas producing communities, leaving the actual oil and gas producing communities in hunger and penury.”

They stated that the illegal and unconstitutional payment of 13 per cent derivation fund through the state governments had left the actual oil and gas producing communities in abject poverty.