The Federal Government has disclosed information on refunds for oil derivation payments paid to Niger Delta states amid escalating allegations that certain local governments had misappropriated the cash.
The nine oil-producing states got N625.43 billion in 13 percent oil derivation, subsidies, and SURE-P reimbursements from the Federation Account between 2021 and 2022, according to a statement released by the federal government on Friday. Refunds were made between 1999 and 2021.
In light of mounting concerns about the state governments’ use of the monies, it is the first time that a sizable sum of money has been publicly acknowledged as having been paid to the states in addition to monthly federal appropriations.
The payments are neither disclosed by the federal government nor the affected states until October 2022, when Governor Nyesom Wike said that he utilized the money for multibillion-dollar initiatives in Rivers State and tasked his colleagues with outlining how they used theirs.
Since then, there has been pressure on the region’s governors to reveal the sums they received and the details of their spending. While some have disclosed the sums received, nobody—aside from the governor of Rivers—has connected the reimbursements to particular projects completed.
The states of Abia, Akwa Ibom, Bayelsa, Delta, Edo, Rivers, Ondo, Imo, and Cross River are included in the Niger Delta. The states are among the richest in the nation and get monthly income from oil extraction.
However, several of the region’s states owe benefits to working people and pensioners and do not pay social security to their citizens. Poverty rates in those states are amongst the highest in the country.
According to data from the Accountant General of the Federation’s office and a statement from the president’s spokesperson, Garba Shehu, the refunds were money that should have been paid as a 13 percent derivation when the federal government made withdrawals from the Excess Crude Account over a period of years. When the NNPC withheld oil money without paying the states their 13 percent derivation, similar payments were still owed.
The highest returns, according to the data, went to Akwa Ibom and Delta States.According to the statement, there is still N860.59 billion in return windfall owed to the benefiting states.
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.
Garba Shehu
Senior Special Assistant to the President
(Media & Publicity)
December 2, 2022
