Most of the communities living in the oil-rich Niger Delta region are not benefitting from the 13 percent derivation fund; rather it has created a window for corrupt politicians, said the Nigeria Extractive Industry Transparency Initiative ( NEITI) in a newly released report.
Despite being at the epicentre of several developmental policy initiatives aimed at assuaging the negative consequences of oil extraction in the region, some stakeholders say the development outcomes from those initiatives have met only minimal expectations.
“Most of the communities are of the strong opinion that the funds have not in any significant way changed their living conditions for the better,” NEITI said.
NEITI added that the funds have created opportunities for politicians, public office holders and their cronies to line their pockets while the people suffer from a lack of basic needs such as good roads, safe drinking water, health centres, electricity, and street lights.
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Revenue allocation in Nigeria is a controversial issue particularly the `principle of derivation’ which is highly contentious in the country’s fiscal federalism since oil discovery in 1958.
The Federal Government was forced to concede 13 percent of the revenue accruing from oil to the Niger Delta states following violent agitation by groups in the region who felt excluded from the benefits of crude oil produced in their region.
The fund is geared towards checking poverty, youth employment, and violence, among others in the region with states such as Bayelsa, Cross River, Delta, Edo, Akwa Ibom and Rivers, and adjoining states of Abia, Imo, and Ondo.
However, the majority of the communities have been accusing the governors of diverting the money, denying their people the basic necessities of life.
For example, four subnational oil producers and revenue earners which include Akwa Ibom, Bayelsa, Delta and Rivers States which received N1.60 trillion, N1.20 trillion, N1.38 trillion and N1.54 trillion, respectively from 2001 to 2018 are also among the highest indebted states in Nigeria.
