The Nation Newspaper

Tag: 13% derivation

  • 13% derivation: more cash coming for oil producing states

    Prayers of oil producing states appeared answered as their quantum of 13 per cent derivation, which they enjoy, will increase in the coming months.

    The Nation learnt at the weekend that a Committee set up to look into the agitation of the oil producing states over alleged underpayment in the true value of their 13 per cent derivation fund has recommended that henceforth, “transfers into the Excess Crude Account (ECA) should be made net of the 13 per cent derivation, while the 13 per cent derivation component thereof is paid to the oil producing states.”

    The Committee headed by the Commissioner of Finance for Delta State, David Edevbie, also recommended that “all future withdrawals from the ECA should be net of the 13per cent derivation share, which should be paid to the oil producing states”.

    The Committee also recommended that “the 13 per cent derivation share of previous withdrawals from the ECA should be calculated and credited to the oil producing states in cases where it was not done”.

    The Committee lamented that “while transfers were made net of cost of collection to the relevant agencies, the 13 per cent derivation share accruable to oil producing states as stipulated in the constitution were also jointly transferred into the ECA”.

    Hence, “in addition to the normal share of Federation Account (FA) receipts, the oil producing states were also forced to save the 13 per cent derivation component, thereby saving more than other beneficiaries of the FA, this was considered neither fair nor equitable”.

    To arrive at its conclusion and recommendations, the Committee noted that “though the 13 per cent derivation principle is apparently taken into consideration when distributions are eventually made from the ECA, other past withdrawals have not necessarily taken into account, this derivation principle”.

    In order to build the accruals into the ECA, which has been in the news lately because of the massive depletion it suffered, the David Edevbie Committee has presented a set of Criteria for transfers/withdrawals from ECA.

    These criteria state that “if the monthly FA net distributable revenue is between N680 and N730 billion, up to N50 billion should be earmarked for transfer, provided that he distributable amount is not less than N680 billion;

    “If the monthly FA net distributable revenue is between N730 and N830, up to N100 billion should be earmarked for transfer, provided that the distributable amount is not less than N730 billion;

    “If the monthly FA net distributable revenue is above N830 billion, up to N150 billion should be earmarked for transfer, provided that the distributable amount is not less than N730 billion and;

    “In the months when the FA net distributable revenues fall below N680billion, funds should withdrawn from the ECA to augment the shortfall to at least N680 billion. These criteria should be reviewed periodically.”

    These decisions, the Committee noted, were “sequel to complaints by commissioners of finance of some states concerning recent transfers into and from the Excess Crude, PPT and Royalty Account (ECA), especially as it relates to the 13 per cent derivation share due to oil producing states”.

    The Committee noted that the ECA was used to save oil revenues above a base amount derived from a benchmark price.

    It was primarily established with the objective of protecting annual budgets against shortfalls that might arise due to crude oil price volatility, it sought to protect public expenditure from being patterned on the boom and bust cycle of the international oil market.

    The ECA in effect, the Committee discovered “was underpinned by the appealing and sensible concept of saving money for the rainy day. However, it is important to note that the ECA currently lacks constitutional backing.”

    The Committee noted that “Initial transfers into the ECA were based on surpluses over and above each revenue items against the monthly budget of the revenue generating agencies that were considered Excess and therefore, transferred to the ECA. This method did not consider inflows from previous months or the collective revenues of the agencies in calculating monthly excesses or deficits.”

    The Excess revenue it said “was determined monthly, on an individual revenue item basis. This method was adopted at a time when agencies were continually declaring surpluses. However, it was found to be deficient during periods of low revenue, when agencies declared deficits with occasional excesses in some individual revenue items.

    Currently, transfers to the ECA from oil/gas mineral revenue receipts were made in the months when distributable revenues were considered to be relatively high when compared to previous months. Suffice to note that transfers are currently being made without reference to the approved FA budget presumably because current revenue receipts were significantly lower than revenue projections included in the budget.

  • 13% derivation not enough to develop Niger Delta, says Dickson

    Bayelsa State Governor Seriake Dickson yesterday said the 13% derivation principle was a mockery of  the yearnings and aspirations of the people of the Niger Delta.

    The governor said the 13 percent derivation was not enough to develop the Niger Delta region.

    A statement issued by Dickson ‘s Chief Press Secretary, Mr. Francis Agbo said the governor spoke  on Tuesday during a live media chat in Ijaw language in Government House Yenagoa.

    The governor argued that only restructuring would guarantee sustainable peace, stability and development in the Niger Delta and other parts of the country.

    He lamented that the people of the region particularly the Ijaws were being treated as second class citizens in the country, as their resources were  exploited by the Federal Government and its agencies.

    He said: “I have said it time and time again that the 13% derivation  they are giving to us can never be enough to tackle our development needs at the pace we want. And that, restructuring is the only veritable means to achieve sustainable peace, stability and prosperity not only in this our region but throughout the country.

    “For how long will the Federal Government and indeed all the supporters of this great injustice continue to treat us as slaves? What they call oil blocs are our ancestral lands but we are the people that are excluded from the ownership and use of this our God-given property.

    “Take Bayelsa, for instance, where the Federal Government is doing almost nothing to support our development effort. We are the ones building all our schools, hospitals, roads and bridges to link our communities in this state. Is that fair?

    “That is why I expect every right thinking Ijaw or Niger Delta person and true Nigerians to support our clamour for restructuring because that is the right thing to do so that every part of our country will have a sense of belonging.”

    On the ongoing state public service reforms, the governor restated the need for  Bayelsans to discountenance the propaganda and blackmail orchestrated by detractors, stressing that no genuine worker would be adversely affected.

    He said through continuous verification and other measures, his administration pruned down the over bloated wage bill of about N6bn  it inherited at inception of his government  to N3.8bn at the end of last month.

    Dickson who urged the people not to see civil service as the best occupation, assured them of government preparedness to assist them go into commerce and other private businesses, which he noted, are more lucrative.

    He called for more support and prayers for the success of the reforms and other programmes adding that he had directed the appropriate government officials to announce the commencement of the recruitment of 1000 graduates into the public service by next week.

    Dickso assured Bayelsans of fairness and transparency in the recruitment process.

    The governor asked the public to report any government official who indulges in nepotism and other sharp practices that would jeopardize his administration’s goal of leaving behind an efficient and result-oriented civil service.

     

  • Dickson accuses FG of withholding 13% derivation

    Bayelsa State Governor, Seriake Dickson, on Wednesday accused the Federal Government of not fully releasing the 13 per cent derivation to the oil-producing states as provided by the constitution.

    The governor insisted that oil producing states in the country were not getting the complete 13 percent derived from oil production.

    Dickson said despite the express provisions of the constitution for the disbursement of 13 per cent to oil producing states, persons entrusted with the responsibility had not ensured effective implementation of the derivation act.

    Dickson, who said successive governments had violated the 13 percent derivation act, called for the issue to be addressed without delay.

    According to a statement issued by the Special Adviser to the Governor on Media Relations, Mr. FIdelis Soriwei, the governor stated these when he visited the Head Office TV Continental (TVC) in Lagos.

    He said the queer kind of federalism in operation in the country was the reason behind the growing call for restructuring of the polity.

     

  • 13% derivation: ‘Probe N’Delta governors for misusing funds’

    13% derivation: ‘Probe N’Delta governors for misusing funds’

    A former Interim Chairman of the All Progressive Congress (APC), Bayelsa State, Chief Richard Kpodo, yesterday implored President Muhammadu Buhari to open an investigation into alleged squandering of 13 percent derivation funds by some past and present governors in the Niger Delta region.

    Kpodo, who spoke in Yenagoa, appealed to Buhari to make the governors account for the trillions of naira they received without commensurate development in the region.

    The APC chieftain insisted that the governors abused their offices and public trust by receiving so much from the centre with little or nothing to show for it.

    He said the endemic poverty in the region, caused by unemployment and lack of social empowerment, was a direct consequence of years of mismanagement by Niger Delta governors.

    He said while the whole world was fond of blaming the federal government for some of the myriads of problems in the Niger Delta, the governors should be held accountable for squandering the wealth of the region.

    Kpodo claimed that former President Goodluck Jonathan’s years as the governor of Bayelsa were the worst in the history of the state.

    He said: “Federal government should probe the 13 percent derivation fund. This is what is metamorphosing into the breaking of oil and gas pipelines because there is so much anger and hunger in the land. When the money is not seen by the people, what do you expect them to do? They have to agitate.

    “The federal government has tried its best by compensating us with 13 percent derivation fund. The blame for the region’s underdevelopment should be on the governors, both current and past governors.

    “They should probe all of them to give account of the 13 percent derivation fund, including the former President, Goodluck Jonathan.”

    Kpodo, who was a security aide to former Governor Timipreye Sylva, alleged that Jonathan spent the state’s money to finance the election of late President Musa Yar’Adua in 2019.

    He said: “Now talking about the money used for the elections, Jonathan was nowhere; he was just a Deputy Governor to Alamieseigha. Alameseigha left and Jonathan became the governor.

    “We also fought Alamieyeseigha because of his problem, but along the line we discovered that Alamieseigha left N22 billion and we were surprised that upon crucification and insults he left N22 billion.

    “Then when Jonathan came in, in less than three weeks to one month, the money developed legs and vanished. It became lost to the state. They said they wanted to establish a new Bayelsa State capital, for which about N40billion was spent but up till now we have not seen that capital today.

    “Money used from here to sponsor election, all what we are expecting is the benefits, they have been no benefit from the money they spent so far until the man (Jonathan) became the president. But we benefitted nothing, no federal presence in Bayeksa State, not even roads, there is nothing we can even talk of,” he said.