From Uche Usim, Abuja
A study to determine the impact of the 13% derivation fund on development in the Niger Delta has listed several factors responsible for the near-zero impact of the monthly subvention on the oil-rich region over the years.
At a validation workshop for the study held virtually at the weekend, discretionary transfers, local Dutch disease effects, lack of consultation and poor governance were listed as major factors dwarfing the growth of the Niger Delta region despite the 13% derivation allocation.
As solutions to these issues, the report recommended the legislation of fiscal rules that guide the expenditure and management of natural resource revenue in the Niger Delta, the institution of transparency structures, and the implementation of memorandums between the state governments and the oil-producing communities to ensure that the needs of the host communities are properly understood and met – while promoting open governance in the states.
The presentation of the study report was made by Mrs Funmi Adesanya, Project Lead – ACIOE Associates, who highlighted the impact of the derivation fund in eight States of the Niger Delta region, excluding Cross River State which is no longer deemed as oil-producing. It was also stated by the Project Lead that whilst the federal government has consistently made allocations to the oil-producing states as enshrined in Section 162 (2) of the Constitution, the state governments have full reign over the management of the 13% derivation funds received from the Federation Accounts Allocation Committee (FAAC). It was observed that the states adopt either a Pooled Revenue Structure or Revenue Management via a Development Commission for the benefit of oil-producing communities, like in Ondo State with Ondo State Oil-Producing Areas Development Commission (OSOPADEC). It was also mentioned that states that have revenue management commissions are enacted by-laws and these laws amongst other things prescribe the funding percentages of these commissions.
However, there is no fixed percentage to these Commissions across these states, with states applying varied percentages based on state laws.
In his remarks, the Managing Director of ACIOE, Mr Ekenem Isichei, stated that the findings of the report were corroborated by data obtained from the Office of the Accountant-General, NEITI, State Government financial statements where possible and interviews with host community members.
Regarding the impact of the derivation fund in the Niger Delta, particularly in host communities, it was noted that Social Capital Development in these communities have remained deplorable over the review period, as poor education, healthcare infrastructure and standard of living continue to be a resonating issue. The presentation was followed by remarks from key public officials and stakeholders. Mr Edobor Iyamu, the Senior Special Assistant to the President on Niger Delta Affairs, acknowledged the efforts of the organisers of the Workshop and commended the team for a job well done. He also stated that from his experience working in the Niger Delta region, the locals’ interest has always been premised on what the federal government is doing to bring development to the Niger Delta. He noted that most Niger Delta indigenes are oblivious to the fact that monies are allocated for development in those communities to the state governments. He stated that a lot more could be done in terms of development in the region. In his view, he suggested that more discussions should be around the quantum and utilisation of the derivation fund in the Niger Delta region. He noted that the federal government has embarked on some initiatives to bring development and positive benefits to host communities. He highlighted the Petroleum Industry Bill (PIB) before the national assembly, adding that implementing the bill would help bring tangible benefits to the Niger Delta.
Additionally, comments were made by Mr Charles Achodo, Special Assistant to the Ministry of Niger Delta Affairs.
He observed that the issues within the Niger Delta are around the need for more resources or delivery modalities to bring development across the Niger Delta. He noted that more emphasis should be given to the relationship between the percentage of derivation allocated and projects carried out in host communities – noting the need for a comparative study across the region. Further comments were made by Mr Dekor Dumnamene, National Assembly Chairman, Host Communities Committee, who stated the importance of the subject of derivation fund. He noted there exists a big issue around defining the concept of ‘host communities’, and managing the 13% derivation fund in the Niger Delta region. He stated that the Committee on Host Communities would pay visits to the host communities in the Niger Delta region to ensure that they benefit from federal government initiatives to bring development in those regions. The Workshop ended with the team stating that copies of the report and recommendations made during the workshop would be shared with the National
Assembly, with the hopes that the recommendations will be considered and implemented.
Participants from various sectors including high-level public officials, Civil Society Organisations (CSOs), natural resource management experts and the media reviewed and validated findings from the impact assessment study.