News

October 16, 2012

Revenue allocation: Oil communities demand 13% derivation

BY GABRIEL ENOGHOLASE

BENIN—Oil Producing Ethnic Nationalities of Delta State have appealed to the Senate Committee on the Review of the 1999 Constitution to amend the document to allocate derivation funds directly to oil producing communities.

In a memorandum by elders and leaders of Oil and Gas Producing Ethnic Nationalities, for their people and presented by Senator Francis Okpozo to the committee in Abuja, the oil producing communities said the poor management of the fund by state governments had resulted in severe underdevelopment and a frustrated citizenry in the communities.

They said: “There is anger in the oil and gas producing communities and except the situation is reversed, militancy might rear its head again in incalculable proportions.”

They also proposed the establishment of a derivation board to manage the 13% derivation fund which they suggested, should be composed of host communities who would manage the funds received according to the quantum of production of each ethnic nationality.

“The derivation board will have a chairman, an executive secretary, and members of the board. We suggest that the federal and state governments should have an ex-officio member each, on the board. The executive secretary will be supported by needed operational staff,” the communities stated.

They urged the Senate Committee on the review of the Constitution to grant their request.

Currently, Delta State receives an average of N10 billion monthly as derivation fund on behalf of oil and gas producing communities of the state.

The communities complained in their memorandum that even the 50% of the fund which the state government was supposed to remit to Delta State Oil Producing Areas Development Commission, DESOPADEC, for their benefit was not being released.