13% derivation: Oil-producing states receive N44trn in 18 years – HOSCON



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13% derivation: Oil-producing states receive N44trn in 18 years – HOSCON

By Bolaji Ogundele, Abuja



The Oil and Gas Producing Communities in Nigeria (HOSCON) has said a total of N44 trillion had in the last 20 years accrued to states in the Niger Delta region through the 13% Derivation Fund.

HOSCON, in a statement issued by its National Director of Media and Publicity, HOSCON, Okakuro Monday Whiskey, said paying the fund through state governors, as currently done, was a gross violation of two mandatory provision of the 1999 constitution as amended.



It, however, called on President Muhammadu Buhari to order for the direct payment of 13% derivation to the Host Communities, through the proposed Presidential Derivation Committee (PDC) and States Implementation Committee (SIC) .

The statement explained that provided the principle of derivation shall be constantly reflected in any approved formula as not being less than 13% Derivation fund ,it is the only first line charge on the Federation Account.

It stated that the federal government is the second line charge, state government third line charge while local government is the fourth line charge.

HOSCON further explained that the current corruption and fraud that has bedeviled the present system of management of 13% Derivation fund, resulting in over 44 Trillion Naira wastage in the past 20 years of its application without commensurate infrastructural facilities on ground to show for it should be seen as the highest fraud on planet earth.

It said “despite the receipt of over N44trillion from the 13 per cent derivation principle between 2000 and 2018, by Niger Delta states, the deplorable living conditions in oil-producing communities remain nauseating, raising questions about the application of such large sum by state governments.

“The Nigerian Extractive Industries Transparency Initiative (NEITI) in its report defines 13% derivation as, ‘the financial incentive that is enshrined in the Constitution to be distributed to oil producing communities, based on the production input to serve as benefits and encourage the community to create enabling environment for more production of crude oil and gas’.

“We the HOSCON therefore, wish to refer to our repeated advocacy , agitations and demands through press conferences, media engagements and our recent visit to President Muhammadu Buhari and plead with Mr. President to stop the unconstitutional payment of 13% Oil derivation fund through state governors who are third line charge on the Federation Account .

“Pay same directly to the Host communities through the proposed Presidential Derivation Committee (PDC) and State Implementation Committees (SIC).

“The 1999 Nigeria Constitution made it very clear that 13% derivation fund is provided constitutionally and exclusively for the oil/Gas producing Communities primarily as compensation for lost of Fishing rights and productive Farmlands as a result of Oil/Gas exploration and production activities.

Oil/gas is number 39 on the Exclusive Legislative List ‘’Mines and Minerals including oil fields, oil mining, geological survey and natural gas’’

“It is instructive to note that any matter that is on the Exclusive Legislative List,it is only the President or Head OfState that has the prerogative and jurisdiction on all matter on the exclusive legislative list. No governor or state assemblies can legislate on matters on the exclusive list,” he added.

13% derivation: Oil-producing states receive N44trn in 18 years – HOSCON

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