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.