Despite the receipt of over N10t from the 13 per cent derivation principle between 2000 and 2018, by Niger Delta states, the deplorable living conditions in oil-producing communities remain nauseating, raising questions about the application of such large sum by state governments.
Section 162, Sub-section 2 of the 1999 Constitution (as amended), explicitly states that no less than 13 per cent derivation should accrue to oil-producing states.
The evaluation of the revenue receipts of oil-producing states, particularly, Rivers, Akwa Ibom and Delta since 2000 indicates that the 13 per cent derivation formed the lion share of their earnings over the period under review.
The Nigerian Extractive Industries Transparency Initiative (NEITI) in its report defines 13% derivation as, “the financial incentive that is enshrined in the Constitution to be distributed to oil producing communities, based on the production input to serve as benefits and encourage the community to create enabling environment for more production of crude oil and gas.”
It is on this basis that Akwa Ibom, Rivers, Delta, Bayelsa, and Edo states have since December 2000 received over N9t as 13 per cent derivation, which ought to serve as a catalysts for the transformation of the oil-producing communities.