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The payment of 13 per cent oil derivation fund to nine states has thrown up controversies and set some state governors at loggerheads.
The derivation fund is a monthly sum guaranteed under section 162, sub-section two of the Nigerian Constitution for oil-producing states, to them tackle environmental pollution and degradation, provide basic amenities and infrastructure and ensure economic prosperity for communities.
Host governments are, therefore, expected to utilize these funds to ensure economic diversification, human capacity, and infrastructural development, provision of social services, as well as preserve the environment from the negative impacts of oil exploration.
Governor of Rivers State Nyesom Wike, caused a stir about a week ago when he claimed that President Muhammadu Buhari had paid the arrears of 13 per cent derivation fund owed since 1999 to all the Niger Delta States.
He attributed the success of various completed and ongoing projects in the state such as a Renal Centre, Cancer and Cardiovascular centre, Basic and Clinical Sciences faculty, House officers’ quarters, and flyover bridges to the release of these funds by the Federal Government.
Other Niger-Delta states which allegedly benefitted from this refund are: Abia, Akwa Ibom, Bayelsa, Delta, Edo, Ondo, Imo and Cross River states, making stakeholders from the region raise questions about the utilisation funds by the other state governors.
However, some states in the region have refuted Wike’s comments, saying that only received a fraction of what was due them and pointing that a court judgement mandating the Federal Government to release payment of the withheld funds, had allowed for the payment to be spread in equal installments over a period of five years.
While Delta State claimed that it had only received the sum of N14.7 billion, Edo and Akwa-Ibom States said they got N2.1 billion and N186 billion respectively, paid in three quarterly installments.
The Civil Liberties Organisation (CLO) in Akwa Ibom State absolved the state government of any wrongdoing in the handling of its share of 13 per cent derivation arrears paid to oil-producing states since 2021.
Chairman of the organisation Franklin Isong, told a press conference in Uyo on Sunday that the tension being generated by the issue was uncalled for as the state government had already captured expected arrears in successive budgets since 2021.
“CLO notes that the 13 per cent Derivation Fund arrears refunded to the State by the Federal Government was captured in the 2022 Appropriation Law of Akwa Ibom State and in the 2022 approved revised Appropriation Law of Akwa Ibom State,” Isong said.
Also wading into the controversy, the Presidency has released details of oil derivation refunds made to Niger Delta states, revealing that the nine oil-producing states received a total of N625.43 billion 13 per cent oil derivation, subsidy and SURE-P refunds from the Federation Account between 2021 and 2022.
Citing figures from the Accountant General of the Federation’s office, a statement by presidential spokesperson Garba Shehu, on Friday said the refunds were monies that should have been paid as 13 per cent derivation when the federal government made deductions from the Excess Crude Account over years.
Similar payments were outstanding when NNPC made deductions from oil revenue without paying out 13 per cent derivation to the states.
He said although the benefitting states had received a total of N625.43 billion, there was still an outstanding balance of N860.59 billion windfall from the refunds which the Federal Government was yet to pay.
“President Buhari considers it a matter of honour and decency that debts owed to states or anyone for that matter be repaid, and in time without regards to their partisan political affiliations.
The President will continue to render equal service to all the states of the federation and an acknowledgment of this by Governor Nyesom Wike of Rivers State and the others is not out of place,” the statement added.
According to the figures, under the 13 per cent derivation fund on withdrawal from ECA without deducting derivation from 2004 to 2019, Abia State received N4.8 billion with outstanding sum of N2.8 billion, Akwa-Ibom received N128 billion with outstanding sum of N77 billion, Bayelsa with N92.2bn, leaving an outstanding of N55 billion.
Cross River got a refund N1.3 billion with a balance N792 million, Delta State received N110 billion, leaving a balance of N66.2 billion, Edo State received N11.3billion, with a balance of N6.8billion, Imo State, N5.5 billion, with an outstanding sum of N3.3 billion, Ondo State, N19.4 billion with an outstanding sum of N11.7bn while Rivers State was paid 103.6 billion, with an outstanding balance of N62.3 billion.
The States were paid in eight instalments between October 2, 2021 and January 11, 2022, while the ninth to twelfth instalments are still outstanding.
On the 13 per cent derivation fund on deductions made by NNPC without payment of derivation, the nine oil producing States were paid in three instalments this year, with the remaining 17 instalments outstanding.
Under this category, Abia State received N1.1 billion, Akwa-Ibom, N15 billion, Bayelsa, N11.6 billion, Cross River, N432 million, Delta State, N14.8 billion, Edo State, N2.2 billion, Imo State, N2.9, billion, Ondo State, N3.7 billion, and Rivers State, N12.8 billion.
Meanwhile, the benefitting States shared N9.2billion in three instalments in April, August and November 2022 as refunds on the 13 per cent derivation exchange rate differential on withdrawal from the ECA.
The three largest benefitting States were Akwa Ibom (N1.6billion), Delta State (N1.4billion) and Rivers State (N1.32billion).
Similarly, all the nine states received N4.7 billion each, totalling N42.34 billion as refunds on withdrawals for subsidy and SURE-P from 2009 to 2015. The refund, which is for all the states and local government councils, was paid on 10th November, 2022.
The Federation Account also paid N3.52billion each as refund to local government councils on withdrawals for subsidy and SURE-P from 2009 to 2015 on the same date in November.