The nine oil-producing states shared a total of N341.59 billion from the federation account, through the 13 percent derivation formula, in the first half of 2024.... CLICK TO READ THE FULL NEWS HERE▶▶
The 13 percent derivation formula is a revenue-sharing mechanism used by the federation account allocation committee (FAAC) to distribute a portion of the country’s revenue to the oil-producing states.
This formula is rooted in Section 162 (2) of the constitution, which mandates that 13 percent of the revenue generated from natural resources, such as oil and gas, should be paid directly to the states where these resources are extracted.
Data from the National Bureau of Statistics (NBS) showed that Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers were states that received the funds in the six-month period.
TheCable Index’s analysis of the report showed that Delta received the highest allocation, totalling N113.78 billion — representing 33 percent of the total disbursement.
Delta is followed closely by Akwa Ibom, which got N70.01 billion or 20 percent of the total disbursement.
Other states include Bayelsa (N64.04 billion), Rivers (N58.78 billion), Edo (N11.90 billion), Ondo (N10.05 billion), Imo (N5.72 billion), Anambra (N4.13 billion) and Abia (N3.19 billion).
OIL STATES STRUGGLE WITH DEBT AND INFRASTRUCTURE DECAY DESPITE DERIVATION FUND
In 2022, Delta and Akwa Ibom were the oil-producing states that received the highest amounts from the federation account, with Delta receiving N296.63 billion and Akwa Ibom receiving N222.52 billion.
In the first half of 2023, the nine oil-producing states shared N544.9 billion from the federation account, with Delta receiving the largest allocation of N180.1 billion, followed by Akwa Ibom with N130.8 billion.
Despite receiving these funds, the oil-producing states continue to face significant debt and poor infrastructure conditions.
According to the Debt Management Office (DMO), as of Q1 2024, Edo had the highest debt stock of N490.67 billion (domestic and foreign obligations) compared to other oil-producing states. Delta followed with N413.75 billion debt while Rivers recorded N340.25 billion.
The debt figures for other states were as follows: Imo (N265.98 billion), Abia (N232.17 billion), Akwa Ibom (N199.62 billion), Bayelsa (N182.17 billion), Anambra (N177.08 billion), and Ondo (N123.09 billion).
In February 2023, Edwin Clark, an Ijaw national leader and convener of the Pan-Niger Delta Forum (PANDEF), asked Ifeanyi Okowa, the immediate past governor of Delta, to spend more of the 13 percent derivation funds on oil-producing communities.
Clark, in a statement, alleged that the 13 percent derivation funds received by the state government were mismanaged.
He described Okowa’s administration as a “reign of unaccountability”.
The Ijaw leader said the state government had not spent the derivation funds on foremost areas and projects but on “favoured areas”.
