N113bn for Delta, Abia got N3bn… how states shared N341bn derivation funds in six months

N113bn for Delta, Abia got N3bn… how states shared N341bn derivation funds in six months

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.

 

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.

 

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”.

 

Source: N113bn for Delta, Abia got N3bn… how states shared N341bn derivation funds in six months

 - NigerianEye
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