A Review of the Nigerian Energy Industry

13% Oil Derivation: FG, States may clash over fund

Jonathan25 November 2013, Abuja – A battle for the management of the 13 per cent derivation fund may ensue between the federal government and the states anytime soon.

There has been growing discontent among stakeholders over the delay by the federal government in correcting its implementation error that resulted in the payment of 13 per cent derivation fund through state governments.

The oil-producing states have also faulted such calls, threatening to go to court instead if the federal government should succumb to pressure.

A statement obtained by LEADERSHIP at the weekend said female activists in the nine oil/gas producing states now demand that President Goodluck Jonathan create a national derivation committee (NDC) to disburse the funds, as was done during the tenure of former President Shehu Shagari.

In a letter to the federal government dated October 18, 2013, the female activists under the aegis of 13% Derivation Amazons and 13% Derivation Women Foundation articulated their grievances. First, they argued that since oil/gas remained on the Exclusive Legislative List, only the president could put a stop to what they described as illegal and unconstitutional payment of the fund through state government accounts.

According to them, the practice is a violation of two mandatory provisions of the 1999 Constitution of the Federal Republic of Nigeria. These are provisions of the Separation of Powers which put oil and gas on the Exclusive Legislative List. Also, they submitted that section 162(2) of the 1999 Constitution makes 13 per cent derivation fund a first charge on the Federation Account. “As a first charge, 13 per cent derivation fund must not be paid through a third party or any state government account,” they stated.

The women group led by a frontline activist from Oben flow station in Edo State, Princess Nomwen Uhunmwangho, called on the president to discontinue the current practice and establish a national derivation committee (NDC) and state implementation committees (SICs).

The women reaffirmed that, from the two mandatory provisions, 3 per cent derivation fund was not part of any consolidated fund of any tier of government. They further affirmed that 13 per cent derivation fund does not form part of the fund to be included in the Joint State/Local Government Account. Other affirmations include:

– Leadership

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