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13% derivation fund: Rivers oil, gas communities seeks direct payment

Published by The Nation on Sun, 05 Jul 2020


By Bolaji Ogundele, AbujaPresident Muhammadu Buhari has been urged to pay the 13% derivation fund for oil and gas producing communities directly to them.A group, Concerned Leaders of the Rivers State Oil and Gas Producing Communities made the call in a statement circulated to newsmen.The statement which was signed by the chairman and secretary of the group, Mr. James Njoku and Amb. (Mrs.) Lucy Ikiriko, respectively, described the continued payment of the revenue allocation through state governors as illegal, what with oil and gas being on the Exclusive Legislative List.According to the leaders, over N44 trillion of the said fund has been mismanaged, embezzled and diverted since its introduction.The leaders lamented that despite the huge revenue allocation, there are no noticeable infrastructural facilities on ground in the oil-rich Niger Delta region to indicate that such money has been expended.They, therefore, appealed to President Buhari to direct the relevant federal agency in charge, to cease forthwith, the payment of the 13% derivation fund through state governors, but pay it through the Presidential Derivation Committee (PDC) and State Implementation Committee (SIC) to the communities.Read Also:$30bn revenue loss probe: Reps to engage 24 banks, 14 oil coysThe statement further lauded the presidency for the moves to ensure that 774 Local Governments, as well as the States House of Assemblies and the Judiciary, directly get their allocations from the federations account.Part of the statement reads, as leaders of the Niger-Delta region, we are happy that President Muhammadu Buhari has decided to tackle head-on the multi-faceted corruption that has bedeviled our dear country, especially as it concerns resource allocation and actual utilization of such funds.13% derivation fund is a benchmark recognized by section 162 (2) of the 1999 constitution as amended. Provided the principle of derivation shall be constantly reflected in any approved formula as not been less than 13% of the Revenue accruing to the Federation Account directly from any natural resources.Of a truth 13% derivation fund is the only first line charge on the Federation Account. The Federal Government is second line charge, the state government is third line charge while the local government is fourth line charge. This is the position of law as confirmed by the revenue formula.Over the years, 13 per cent derivation fund has remained a bone of contention between the state government and the oil-producing communities. Therefore, we implore the Federal Government to stop remitting the 13 per cent derivation allocation to the states.It is illegal and unconstitutional to pay the 13% derivation fund which is first line charge through State Governors third line charge on the Federation Account, according to Section 162 (2) of the 1999 constitution as amended.This position of the constitution made it very clear that 13% derivation fund is provided constitutionally and exclusively for the oil/gas producing communities primarily, as compensation for loss of fishing rights and productive Farmlands as a result of oil/gas exploration and production activities.It is instructive to note that any matter that is on the Exclusive Legislative List. It is only the President or Head State that has the prerogative and jurisdiction on all matter on the exclusive legislative list. No governor or state assemblies can legislate on matters on the exclusive list.Therefore, it is illegal and unconstitutional for governors of the SouthSouth States and their States Assemblies to legislate on oil/gas13% derivation fund which is first line charge on the Federation Account.We wish to appeal to President Muhammadu Buhari and plead with Mr. President to stop the illegal and unconstitutional payment of 13% derivation fund through state governors who are third line charge on the Federation Account and pay same directly to the Host communities through the proposed Presidential Derivation Committee (PDC) and State Implementation Committees (SIC), the statement said.
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