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December 10, 2025

Derivation fund: NDCSF warns against continued payment to states

Derivation fund: NDCSF warns against continued payment to states

By Jimitota Onoyume

Ondo state chapter of the Niger Delta Civil Society Forum (NDCSF),  has appealed to President Bola Ahmed Tinubu to urgently address what it dubbed   the “persistent injustice” in the administration of the 13 percent derivation fund, stressing that communities may be compelled to seek international intervention if  the government fails to correct the long-standing anomaly.

At a press conference in Ilaje ,  Ondo state, the state Coordinator of the forum, Comrade Mrs. Ilemobayo Ojalatan,  the secretary, Revd. Apostle Tayedolu Jato, and the Public relations officer , Revd Banjo Ikuelogbon, said the  continued payment  of the 13% derivation fund through state governments has failed to produce the intended developments in the targeted oil and gas communities.

“The current arrangement contradicts the constitutional intention of the derivation principle, which is designed to compensate oil-producing communities for environmental degradation and infrastructural pressure resulting from resource extraction.

“The 13% derivation fund is a constitutional provision aimed at addressing the impact of oil production on host communities. Unfortunately, the states have misdirected these funds into the wrong hands, leaving oil-bearing communities impoverished and deprived of basic infrastructure”, they said .

“We do not want to be pushed to seek international intervention to get the 13 percent derivation funds paid directly to oil, gas, and mineral-producing communities. But continuous neglect may compel host communities to explore such measures”, they stressed.

“Despite contributing massively to the national economy, many host communities still lack motorable roads, potable water, electricity, and functional healthcare centres. There is often little or no transparency in how states administer the derive funds”, the group said.

The forum said the timely intervention of the federal government   will  restrain oil communities from calling on  the  international  community  to join in the appeal to the government to redirect the funds to oil and gas communities.

The Ondo chapter’s position aligns with recent strong demands by NDCSF chapters in Edo, Rivers, Bayelsa, Delta, and other Niger Delta states in their  separate appeal to the federal government ,  the National Assembly, and RMAFC to restructure the derivation distribution framework.

In Edo State, the NDCSF recently demanded the immediate establishment of Derivation Boards to manage and monitor the funds directly, while the Rivers State chapter called on the federal government to stop routing the 13% derivation through state governors, describing the practice as “unconstitutional, unproductive and unjust.”

The Ondo chapter said these collective calls reflected a growing regional frustration with a system that has consistently failed oil-bearing communities.

The group expressed concern over what it described as alleged  widespread diversion and mismanagement of derivation revenues by state governments.

The group noted that the neglect of oil and gas communities despite a derivation fund meant to develop the areas was  identified as a key factor largely responsible for youth restiveness, sabotage of oil facilities, and disruptions in national production.

NDCSF urged President Tinubu to direct RMAFC and other relevant agencies to begin a constitutional and operational review that will allow the 13% derivation funds to be paid directly to host communities through any of these platforms : “a Presidential Monitoring Committee, Derivation Boards or a dedicated trust fund.”

The forum reaffirmed its confidence in President Tinubu’s leadership and urged him to correct what it called a historical injustice.

“We believe President Bola Tinubu can correct this anomaly..The survival and development of host communities depend on it”,the statement said .

The NDCSF emphasized that the intervention of the president would sustain  stability in the region  which remains central to Nigeria’s economic wellbeing.

The group also addressed an open letter to President Tinubu, the National Assembly, and the Revenue Mobilization Allocation and Fiscal Commission (RMAFC), urging immediate enforcement of direct payment of derivation funds to oil, gas, and mineral-producing communities.