• June 18, 2021

DERIVATION: Okowa Blasts NNPC, FG


The Governor of Delta State, Dr. Ifeanyi Arthur Okowa, has bluntly accused the Nigerian National Petroleum Corporation, NNPC, of being insincere about the actual funds it pays into the Federation Account, stating that the states were becoming increasingly uncomfortable with statistics usually churned out by the corporation and the Federal Government. He was speaking in Asaba, while hosting members of the Post Mortem Sub-Committee of Federal Account Allocation Connittee, FAAC, led by Mrs Mashi who paid him a courtesy visit.

In the governor’s words, “we do know that there could be slight fluctuations on a monthly basis but, we also understand that there should be no surprises when it comes to FAAC allocation,”.

The governor also brought the derivation issue to the fore as he complained that oil-producing states deserved more than the 13% that were currently accruing to them from the Federation Account. According to him, the NNPC should be able to declare what ought to be declared and any other deductions being done for any other purpose, then, the basic principles must be applied.

“But first, there must be total truth and truth that can be assessed and the whole nation is put in such a state that we can say we trust ourselves. “At the end of evaluation and analysis, we expect a new leaf and all monies that are owed to be returned to various oil-producing states as we must impress on NNPC to do what is right to pay the monies owed because, as a nation, we must believe in justice, fairness and equity. “We will stand strong and there should be no room for doubt because that will only bring weakness which as a nation do not need.”

He pointed out the need for the Federal Government to disburse funds constitutionally due to the states under the current sharing formula: “We are hoping that in the near future, we will be looking beyond 13percent which it is for now, and we actually believe that there is need to ensure that the money gets to Niger Delta states. “As a state, we do understand that we are part of the federation and we pray and continue to work towards the unity of our nation. “We also believe that it is important that for us to continue to show the kind of commitment we keep showing, every administration and finances of the nation must be done in such a way that there is fairness and justice. “There should be an equitable approach to that and in so doing, the laws of the federation must be obeyed at all times and I guess that is why, in all fairness, this committee was put in place.

“As a state, we do understand that the oil resource as agreed by our nation is for the good of all but, very particularly, we have always insisted on the fact that since there is a constitutional provision for 13 per cent derivation, at all times, we must apply that principle for the good of all. “This makes it equitable, because until people come to understand the terrain, until the difficult terrains, particularly the creeks and riverside areas are being visited, people cannot completely comprehend the challenges that actually confront the people of the Niger Delta.”

The governor lamented that the difficult terrains made it difficult and burdensome for state governments to step in to develop infrastructure, adding that the situation was same for those who lived on land. He said; “It is beyond the fact that oil processing leads to situations where environmental degradation occurs to the extent that our people can no longer farm or fish and their means of livelihood is actually distorted. “So, we are truly glad that the Chairman of this committee and members are looking into all these issues.

“The Excess Crude Account is in the interest of all and we do not frown at the withdrawal of money from the excess crude account but, as we have always said, for any withdrawal from the account, first of all, we must apply the constitutional principle of deducting the 13 percent and send it back to those it belongs to. “The rest of it becomes  to the federation that can be applied in the agreement of all; for instance, the issue of withdrawal of $1billion to support the military agencies would not have taken place. “As states from the Niger Delta area, we were not against it, but, it is only implied that in withdrawing that money, provisions must be made for the 13 percent for the states, otherwise, it will look like we are disobeying the constitutional principles. “It makes the Niger Delta states to contribute far beyond what all other states are contributing and that obviously is not fair and equitable and we will continue to advocate fairness.

 “Our House of Assembly to reaffirm the resolution that yes, we are supportive of the fact that money can be withdrawn but the resolution had to be passed in other states insisting that the constitutionally provided 13 percent derivations should be deducted and returned to the states for fairness. “This has happened on several other issues and it is important we start to look into it. Beyond all the things that we do in terms of infrastructure in the Niger Delta, we spend a lot of money to secure the facilities that belong to each and every one of us on behalf of all other states. “We spend a lot of money far beyond what is expected; the military and other security agencies are doing their best but there is a lot more that we do as a state government in support of their services.

However, when contacted for reaction, NNPC spokesman, Mr Samson Makoji, said at the moment, the NNPC management was in Lagos to inspect the site of the explosion which occurred on Sunday, March 15, 2020, but promised that an adequate response would be given after checking with the corporation’s head of finance.

  • Jude. Obuseh

*** OVER CENTRALISATION of Nigeria’s federal system impacts negatively on resource control and distribution.  Nigeria’s revenue allocation system or fiscal federalism has not conformed with (but has tended to deviate completely) from existing theories and practices. In Nigeria, the sharing of centrally-generated revenue is supposedly rooted in the federal constitution, yet revenue allocation has not ceased to be a contentious issue among the constituent units, because of the response of the federating units, especially the oil producing states of the Niger Delta from where the bulk of federal revenue is derived,  to the character of the economy which breeds an over centralised federal system.

Agenda Watchdog readers are invited to express their views on how Nigeria’s political economy of revenue allocation shapes federalism in Nigeria. The commentary section below is for your views


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