For a Safer Earth, Healthier Climate

Despite 13% Derivative In Extractive, Host Communities Remain Poor Stakeholders’ Lament

——-Despite States Receiving N9 trillion Between 1999 and 2018

By Ruth Tene Natsa Abuja.

Stakeholders have decried the undeniable steep poverty suffered by host communities of oil and gas and mining.

The Stakeholders who stated their positions were speaking at a Stakeholder Dialogue on the Implementation Gaps in Subnational Transfers of Extractive Revenues, organised by the Africa Centre for Energy Policy in Abuja Yesterday.

In his position, Dr Timothy Okon, Chairman SMEPI in a presentation on the political economy of the management of Local Governance Council share of the 13% derivation fund quoted “The Nigerian Extractive Industries Transparency Initiative (NEITI) in its report which defined 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 an enabling environment for more production of crude oil and gas.”

He noted that while oil money continues to flow into the coffers of these states, paradoxically, most oil-producing communities remain poverty-stricken, plagued by unemployment, and devoid of basic social amenities like potable water, hospitals, electricity, motorable roads, and a conducive learning environment in their schools.

The Don said the fund is a financial incentive enshrined in the Constitution for oil-producing communities, based on their production input, to serve as benefits and encourage the community to create an enabling environment for more production of crude oil and gas.

“In the last twenty-two years of the 13% derivation regime, the oil-producing states have indeed received huge revenue as oil derivation funds. The 13% derivation fund, as acknowledged in section 162(2) of Nigeria’s 1999 constitution, was mainly constituted to cushion the effects of the devastations of oil exploration, as well as to recompense Oil producing communities for divesting them of their proprietary right”

He maintained that based on provisions of the constitution, State Governments in the Niger Delta region, such as that of Rivers, Akwa Ibom, Delta, Edo, Abia, Ondo, Imo, Cross River, and Bayelsa have received over N9 trillion as 13% derivation funds between 1999 and 2018, this is asides other monetary allocations accruing to these states as development funds. 

“However, despite this huge revenue available to the State Governments in the region the Niger Delta and its communities have remained a model for impoverishment and agitations, he said

ACEP Executive I Director, Benjamin Boakye said we are a policy think-tank and looking at energy and the extractive sector,  one of the issues we have been looking at is how resource revenue benefits people.

“In the Nigeria Contest, there are allocations that go into communities and states for the benefit of the people, which essentially is the 13% derivative, set in the constitution and been implemented over the years. We have seen that even with that intervention paid to the states and particularly those impacted the resources could be better utilised as complaints on the ground show the resources could be better utilised.

He noted that the purpose of the stakeholder’s engagement was to see how they could improve the architecture to ensure the optimisation of revenue noting that the governors who have much power have to learn to delegate such powers to the locals through local government authorities to allow the resource benefits trickle down to communities.

He assured the conversation was just starting as members of ACEP were to follow up the dialogue with some governors and leaders of thought to look at ways of how to change the status quo with the view of optimistic resources.

Executive Director Ziva Community Initiative, Emily Offodilie opined that the dialogue was a very important conversation noting that as much as the minerals mined in communities belong to the federal government as stipulated by the Constitution, the communities suffer devastations after mining

“Having worked with mining host communities, it goes without saying that host communities should be socially, economically and materially enriched by the activities that often leave them devastated but rather there is no backward integration as the 13% derivative to states is most often used to develop the capital, leaving the local governments and communities with next to nothing” she said

She argued that communities should be entitled to more resource benefits.

Meanwhile President, Women in Mining In Nigeria, Eng. Janet posited that to address the many challenges of poor resource governance, Nigeria must address the constitution and Land Use Act as well as proffer sanctions on those found on the wrong side of effective implementation of the constitution.

She maintained that to correct the anomaly, Nigeria must first address the gaps “We must address the gaps in the constitution and land use act and ensure sanctions for people caught in violation of constitutional stipulations” she said

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