Govt says states have an outstanding of N860bn
The Federal Government has released details of oil derivation refunds made to Niger Delta states amidst a growing controversy that the funds had been misused by some governments in the region.
The federal government said in a statement Friday that the nine oil-producing states received a total of N625.43 billion 13 per cent oil derivation, subsidy and SURE-P refunds from the Federation Account between 2021 and 2022. The refunds date from 1999 to 2021.
It is the first public confirmation that huge amounts of money, separate from monthly federal allocations, had been paid to the states, amidst growing questions on how the state authorities used the funds.
Neither the federal nor the affected state governments disclose the payments until October 2022 when Governor Nyesom Wike said he spent the funds on multibillion projects in Rivers State, and challenged his colleagues to explain how they used theirs.
Governors in the region have since come under pressure to disclose the amounts they received and how they spent them. While some have released the figures collected, none, except the Rivers governor, has tied the refunds to specific projects delivered.
The Niger Delta comprises Abia, Akwa Ibom, Bayelsa, Delta, Edo, Rivers, Ondo, Imo and Cross River states. The states receive oil derivation funds monthly and are some of the richest states in the country.
Yet, many states in the region owe benefits to workers and retirees and do not pay social security to their citizens. Poverty rates in those states are amongst the highest in the country.
A statement by presidential spokesperson Garba Shehu, citing figures from the Accountant General of the Federation’s office, said the refunds were monies that should have been paid as 13 per cent derivation when the federal government made deductions from the Excess Crude Account over years. Similar payments were outstanding when NNPC made deductions from oil revenue without paying out 13 per cent derivation to the states.
In the details provided, Akwa Ibom and Delta States got the largest refunds.
The benefitting states still have an outstanding balance of N860.59 billion windfall from the refunds, the statement said.
Read the full statement below:
OIL DERIVATION, SUBSIDY AND SURE-P REFUNDS: NINE OIL PRODUCING STATES RECEIVE N625.43 BILLION IN TWO YEARS; N1.1 TRN STILL OUTSTANDING
Nine oil-producing states received a total of N625.43 billion 13 percent oil derivation, subsidy and SURE-P refunds from the Federation Account in the last two years, 2021-2022.
The states that received the refunds dating from 1999 to 2021 are Abia, Akwa-Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Ondo and Rivers.
Data obtained from the Federation Account Department, Office of the Accountant General of the Federation, show that a total of N477.2 billion was released to the nine states as refund of the 13 percent derivation fund on withdrawal from Excess Crude Account (ECA) without deducting derivation from 2004 to 2019, leaving an outstanding balance of N287.04 billion.
The States also got N64.8 billion as refund of the 13 per cent derivation fund on deductions made by NNPC without payment of derivation to Oil Producing States from 1999 to December.
The benefitting States still have an outstanding balance of N860.59 billion windfall from the refunds, which was approved by President Muhammadu Buhari.
According to the figures, under the 13 per cent derivation fund on withdrawal from ECA without deducting derivation from 2004 to 2019, Abia State received N4.8 billion with outstanding sum of N2.8 billion, Akwa-Ibom received N128 billion with outstanding sum of N77 billion, Bayelsa with N92.2bn, leaving an outstanding of N55 billion.
Cross River got a refund N1.3 billion with a balance N792 million, Delta State received N110 billion, leaving a balance of N66.2 billion, Edo State received N11.3billion, with a balance of N6.8billion, Imo State, N5.5 billion, with an outstanding sum of N3.3 billion, Ondo State, N19.4 billion with an outstanding sum of N11.7bn while Rivers State was paid 103.6 billion, with an outstanding balance of N62.3 billion.
The States were paid in eight instalments between October 2, 2021 and January 11, 2022, while the ninth to twelfth instalments are still outstanding.
On the 13 per cent derivation fund on deductions made by NNPC without payment of derivation, the nine oil producing States were paid in three instalments this year, with the remaining 17 instalments outstanding.
Under this category, Abia State received N1.1 billion, Akwa-Ibom, N15 billion, Bayelsa, N11.6 billion, Cross River, N432 million, Delta State, N14.8 billion, Edo State, N2.2 billion, Imo State, N2.9, billion, Ondo State, N3.7 billion, and Rivers State, N12.8 billion.
Meanwhile, the benefitting States shared N9.2billion in three instalments in April, August and November 2022 as refunds on the 13 per cent derivation exchange rate differential on withdrawal from the ECA.
The three largest benefitting States were Akwa Ibom (N1.6billion), Delta State (N1.4billion) and Rivers State (N1.32billion).
Similarly, all the nine states received N4.7 billion each, totalling N42.34 billion as refunds on withdrawals for subsidy and SURE-P from 2009 to 2015. The refund, which is for all the states and local government councils, was paid on 10th November, 2022.
The Federation Account also paid N3.52billion each as refund to local government councils on withdrawals for subsidy and SURE-P from 2009 to 2015 on the same date in November.
President Buhari considers it a matter of honour and decency that debts owed to states or anyone for that matter be repaid, and in time without regards to their partisan political affiliations.
The President will continue to render equal service to all the states of the federation and an acknowledgment of this by Governor Nyesom Wike of Rivers State and the others is not out of place.
The refunds to the oil producing states will continue.
Senior Special Assistant to the President
(Media & Publicity)
December 2, 2022