Derivation Fund: Nigerian Oil Communities Allege N7tn Misappropriation

Nigerian rebels have threatened an "all out war" in the oil-producing regions of the country. The rebels point to the environmental degradation and exploitation of petroleum resources as the basis of their struggle., a photo by Pan-African News Wire File Photos on Flickr.

Derivation Fund: Oil Communities Allege N7tn Misappropriation

20 Dec 2012
James Emejo in Abuja
Nigeria ThisDay

Oil-producing communities in five states of the federation have accused their respective state governors of misappropriation of about N7.282 trillion.

It was alleged that the governors received the amount as payments for the 13 per cent derivation for the past 13 years.

The states include: Akwa Ibom, Rivers, Edo,Bayelsa and Ondo

The communities, in a joint letter to the Nigerian Extractive Industries Transparency Initiative (NEITI), appealed to the agency to support their efforts to halt the illegal and unconstitutional payment of 13 per cent derivation into any state government account.

They maintained that: “The illegal and unconstitutional payment of 13 per cent derivation fund through the state governments have left the actual oil and gas producing communities in abject poverty.

“The state governments which received this money illegally use the fund to develop their state capitals and non oil and gas producing communities, leaving the actual oil and gas producing communities in hunger and penury.

The situation has caused monumental fraud against the oil and gas producing communities.

According to the communities: “Therefore appeal to NEITI to intervene and prevail on the RMAFC to respect the constitution, stop this illegal and unconstitutional payment of 13 per cent Derivation Fund into any state government account, comply with the principle of fiscal responsibility, transparency, accountability and pay the 13 per cent Derivation Fund directly to oil and gas communities through a National Derivation Board”

The communities also charged NEITI to should visit the oil and gas communities to undertake physical audit in order to seethe degree of poverty, lack of infrastructure and means of livelihood as well as the level of devastation, environmental degradation, pollution and health hazard while carrying out the financial audit on the 13 per cent derivation.