Niger Delta Governors Are Misusing Derivation Funds – Commission

Niger Delta governors are "unjustifiably" spending the 13 per cent derivation funds on state capitals to the detriment of oil producing areas that the monies are exclusively meant for, chairman of the Revenue Mobilization, Allocation and Fiscal Commission has said.
Engr. Elias Mbam said while receiving a delegation of traditional rulers from Delta State yesterday in Abuja that the oil host communities are being deprived of the resources needed to tackle environmental degradation afflicting them.

Niger Delta governors are "unjustifiably" spending the 13 per cent derivation funds on state capitals to the detriment of oil producing areas that the monies are exclusively meant for, chairman of the Revenue Mobilization, Allocation and Fiscal Commission has said.
Engr. Elias Mbam said while receiving a delegation of traditional rulers from Delta State yesterday in Abuja that the oil host communities are being deprived of the resources needed to tackle environmental degradation afflicting them.
"(Mbam) clarified that the 13 per cent derivation from monthly allocation extended to oil producing states ought to be exclusively spent on oil producing communities as, being host, they suffer most from the impact of environmental degradation occasioned by oil exploration in their domain," according to a statement by spokesman for RMAFC Ibrahim Mohammed.
The 13 per cent derivation is calculated from the Federation Account's monthly receipts and shared to the nine oil producing states of Bayelsa, Rivers, Delta, Akwa Ibom, Cross River, Edo, Imo, Abia and Ondo.
But there have been allegations that the derivation billions is not properly utilized by state governors.
Mbam said "a larger percentage of the 13 per cent derivation fund meant for the development of host communities is unjustifiably spent in the development of state capitals and other urban centres thus negating the principle behind derivation which serves as reparation to the host communities which land and water resources are devastated by oil exploration activities," according to the statement from RMAFC.
The chairman said the law on state-local government joint account unwittingly confers "absolute control" of the derivation funds on governors rather than on local government area chairmen who he said govern the oil host communities.
Mbam therefore urged for a constitution amendment on the joint account to allow local government councils take direct control and administration of all funds meant for them.
He said since local government chairmen are closer to the grass roots, "they can be held accountable by local communities and when the host communities are well developed, the local people would jealously guard oil facilities against vandalisation as they take pride of ownership."
He said also that the on-going review of the revenue allocation formula will also address some of the grievances of beneficiaries of the Federation Account "in a just, fair and equitable way."
Earlier, leader of the Delta traditional ruler’s delegation, the Bolowei of Gbaramatu Kingdom Chief Wellington Okirika, accused state governors in the oil states of underutilization of the derivation fund. He said development projects are concentrated in the state capitals instead of the oil host communities.
He urged RMAFC to support the establishment of an independent body to administer the oil derivation funds.