N180bn for Delta, Akwa Ibom got N130bn — how six-month N544bn derivation fund was shared

THE CABLE

The nine oil producing states shared N544.9 billion from the federation account, through the 13 percent derivation formula, in the first half of 2023.

National Bureau of Statistics (NBS) data showed that Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers were states that received the funds.

The 13 percent derivation fund comes from the federation revenue to oil producing communities through the state governments, as enshrined in section 162, sub-section 2 of the constitution.

Analysis of the report by TheCable Index showed that Delta state received the highest allocation totalling N180.1 billion, representing 33 percent of the total revenue from the derivation account.

Delta is followed closely by Akwa Ibom, having received N130.8 billion, representing 24 percent of the total disbursement.

Other states include Bayelsa (N92.9 billion), Rivers (N92.7 billion), Edo (N17.5 billion), Ondo (N16.9 billion), Imo (N6.2 billion), Abia (N2.4 billion), and Anambra (N5.4 billion).

The 13 percent derivation fund differs from the three percent provided for host communities in the Petroleum Industry Act (PIA), from the oil companies operating expenses (OPEX).

OIL STATES BATTLE DEBT AND INFRASTRUCTURAL DECAY DESPITE DERIVATION

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 a controversial comment last year, Nyesom Wike, former governor of Rivers, said President Muhammadu Buhari had approved the payment of funds owed to states in the Niger Delta since 1999.

According to Wike, the money approved by Buhari were funds owed from the 13 percent derivation, which he said had significantly aided his infrastructural strides in the state.