A Review of the Nigerian Energy Industry

13% Derivation: Abia oil communities seek direct disbursement

25 July 2013, Umuahia – Oil producing communities in Abia State have joined the clamour for the direct payment of the 13 percent derivation fund to them rather than the state government.
They argued that the fund had already existed before any other revenue formula, adding that the amount due to the fund was to be constitutionally set aside before the commencement of Federation Accounts Allocation Committee, FAAC, meetings to share the remaining balance of 87 per cent of the total oil revenue.
The communities further insisted that the constitution had also provided that the 13 per cent derivation fund be treated as first line charge on the federation account.
In a memorandum to the Chairman, Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, the communities held that the continued disbursement of the derivation to state governments was illegal.
“Therefore, 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.
“It is also clear that 13 per cent derivation fund is not part of the consolidated of any tier of government. The fund is not part of state/local government joint account; the fund as provided in the 1999 Constitution, is on its own and should be treated as such,” the communities said.
They further argued that the derivation fund was not ‘manna from heaven’’ because oil and gas producing communities fought for it during the 1994/95 National Constitutional Conference, where Chief Edwin Clark, led the oil and gas producing communities to the conference.
They said: “It was due to the pressure exerted by the oil and gas producing communities that made the 13 per cent derivation fund as one of the main decisions and resolutions of the 1994/95 conference.
“During the 1999 Constitution drafting committee, the oil and gas producing communities were there to pile pressure to ensure that 13 per cent derivation fund is enshrined in the 1999 Constitution.”
The communities lamented that for 13 years, state governors of oil producing communities had received the 13 per cent derivation fund meant for the development of oil and gas producing areas, but used the funds to develop their state capitals and non oil producing communities.
This, they argued, had left the actual oil and gas producing communities in abject poverty.
The memorandum was signed by 10 leaders of the communities which included Chief Jones Udeogu, ChineduElechi, Chief OnyemaOlujie, Prince Sam Nwogu, ObinnaEmemenna, Nwaloziri Ignatius, Emma Ukaegbu, Hon UgochukwuEkpo, Reginald Ezenta and Maduka James.

– James Emejo, This Day

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