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On the 13 per cent derivation fund


Niger Delta

Niger Delta

Although it came from relatively unknown associations in the Niger Delta, the call made the other day by oil-producing communities in Delta State to the Federal Government, to stop paying the 13 per cent derivation to governors of states in the region, is advice that should not be treated with levity. It should be taken seriously and given utmost consideration because it borders on the overall economic well-being of the Niger Delta people and impacts on the revenue generation of the country.

Coming at a supposedly inauspicious time, given the predicament of Nigerians in economic dire straits, the separate statements by chairman, Oil and Gas Producing Communities of Nigeria, Maikpobi Okareme, and Secretary, Board of Trustees, 13 Per Cent Derivation Fund, Hendrick Opukeme, were a denouncement of the legality of paying  such fund to the governors. For instance, Okareme, whose coalition was opposed to the 13 per cent derivation being part of the consolidated revenue of the states, was quoted as saying: “Having failed to use derivation fund for the original purpose of ameliorating the negative effects of oil production on the people and environment, we now insist that the Federal Government should immediately stop disbursing the 13 per cent derivation to states to be used as a budgetary item.”

This demand is not new, for it has always been a strong voice in the growing clamour for fiscal federalism and restructuring. It is also one of the prominent items in the 16 conditions for disengagement from hostilities with the government issued by Niger Delta Avengers. The principle behind this clamour is sound logic based on the travails of past experience with the governors and the Federal Government. Why is it that in spite of the 13 per cent derivation from the government, the inauguration of many development commissions and even a dedicated ministry to the Niger Delta as well as an amnesty programme, there has not been remarkable progress consistent with the resources poured into that region?


However, the hope is that this call to action is backed by genuine people-centre intentions and that this is not an attention-seeking exercise that will pale out when the public outcry would have been settled privately with the governors.

Notwithstanding the request of the oil-producing communities, this newspaper, as always, reiterates its commitment to propose economic restructuring as a principle of distributive justice in the management of national resources. Restructuring may be dubiously misconstrued as a recipe for national disintegration, yet it is by its true meaning a viable alternative with invaluable prospect for equitable distribution of natural resources in the land. As a matter of principle, a key element in the structure of restructuring is integration. As various people begin to own the products of their land, the need to create value chain for these products and to get expertise and manpower from other places becomes inevitable. In the whole process of business dealings, negotiation and interaction, a more formidable economic integration, far more beneficial than the present state control of selective resources, is developed.

If the government understands that restructuring in the sense described above is what the oil-producing communities are talking about, it would certainly be more attentive to, and less rebuffing of, the pleas of the oil-producing communities. A proper understanding of restructuring would inform leaders that it is the inalienable rights of a people to take possession of their land. The owners of the product of a given land are the people of that land. It is a warped sense of justice to think and do otherwise, be it for oil, or for gold, marble, or any product.

The present situation, that privileges state governors with proceeds from oil, to the disadvantage of the communities, has not solved any problems in the area. Whilst it has created clannish overlords out of the cronies of the state principal, it has further pauperised the people and set communities one against the other. Given this circumstance, it is expected that certain quarters view the opposition against payment of 13 per cent derivation to governors as a political gimmick.

Rather than view the cries of the oil-producing communities as cheap blackmail, the governors of the oil-producing states enjoying 13 per cent derivation should regard it as an invitation to Nigerians to genuinely appreciate a just fiscal policy; one that grants the control of resources to federating units on whose land the resources are located. It is as this newspaper once stated “a call on the political leadership to squarely revisit the economic unitarism that encourages dependency and undermines equitable distribution and control of resources”.

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