Business

How oil producing states got 44 trillion naira in 18 years

Oil producing states

A total of N44tn accrued to states in the Niger Delta region through the 13 per cent derivation fund in the last 18 years, the Host Communities of Nigeria has said.

HOSTCON, an organisation for oil and gas producing communities, lamented that the N44tn that was paid to states in the oil-rich region had not impacted positively on the lives of citizens in the affected communities.

According to PUNCH, The group’s National Director, Media and Publicity, Okakuro Monday, said in a statement that paying the derivation fund through state governors was not in accordance with the country’s 1999 Constitution as amended.

He argued that this was partly responsible for the poor usage of the funds, stressing that the N44tn had not resulted in commensurate infrastructural development in the region.

Monday called on the Federal Government to mandate its agencies to pay the 13 per cent derivation to the benefiting host communities through the proposed Presidential Derivation Committee and States Implementation Committee.

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He said, “Despite the receipt of over N44tn from the 13 per cent derivation principle between 2000 and 2018 by Niger Delta states, the deplorable living conditions in oil-producing communities remain nauseating, raising questions about the application of such large sum by state governments.

“The Nigerian Extractive Industries Transparency Initiative, in its report, defines 13 per cent derivation as ‘the financial incentive that is enshrined in the Constitution to be distributed to oil-producing communities, based on the production input to serve as benefits and encourage the communities to create enabling environment for more production of crude oil and gas’.”

He added, “We, HOSCON, therefore, wish to refer to our repeated advocacy, agitations and demands through press conferences, media engagements and our recent visit to President Muhammadu Buhari and plead with Mr President to stop the unconstitutional payment of 13 per cent oil derivation fund through state governors.”

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The group insisted that the 1999 Nigeria Constitution made it very clear that the 13 per cent derivation fund was provided constitutionally and exclusively for the oil-producing communities.

It said the fund primarily served as compensation for lost fishing rights and productive farmlands as a result of oil/gas exploration and production activities.

HOSTCON further argued that oil and gas was on the exclusive list and that only the President had the prerogative and jurisdiction on all matters on the exclusive list.

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