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Published On: Fri, Nov 6th, 2020

Omo- Agege says Niger Delta Govs divert billion of 13% derivation funds

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By Ikechukwu Okaforadi

The Deputy President of the Senate, Senator Ovie Omo-Agege (APC Delta Central), has decried the diversion of the 13 percent oil derivation funds by oil producing states.
Omo – Agege made the condemnation in Abuja Thursday, when he hosted a delegation of Oil and Gas Host Communities of Nigeria (HOSCON), led by the Amayanabo of Twon-Brass in Brass Kingdom and Chairman, Bayelsa State Traditional Rulers Council, Chief Alfred Diete-Spiff in his office.
He consequently called for 100 percent utilisation of the funds for oil-bearing communities, as against the practice where states release only 50 percent of the money to development commissions in their states.
According to him, since host communities bear the burden of environmental degradation from the oil industry, it is only fair that all funds be channeled into the development of the affected areas.
He expressed regrets that the utilisation of the 13 percent derivation funds has become a political tool in the hands of governors of the affected states.
He said the diversion of the money has contributed gravely to the underdevelopment of the region as the affected communities can hardly boast of having access to the basic necessities of life.
“I have been discussing this matter with Chief (Wellington) Okrika even before I became a senator. It is fair that the 13 percent derivation is meant to ameliorate the conditions of the people who are most impacted by oil exploration and exploitation.
“That is the only reason this fund was set aside as a consequence of your agitation which you led for so many years. These funds are not meant for the state governments. The state governments are meant to be purveyors to host communities.
“Even in states that have development commissions, they only earmark 50 percent of the funds to the Commission to manage on behalf of the host communities. So what happens to the other 50 percent?
“We have always taken the position from the outset that 100 percent of the funds is meant for the development of host communities because it is not every area that suffers from oil exploration and degradation. But for some reasons, it has become a political tool”.
He reiterated his call for gas flaring penalties in the Petroleum Industry Bill to be paid to the host communities and not to the Federation Account, stressing that the annual contribution of 2.5 percent actual operating expenditure by oil companies to the Host Community Development Trust Fund should be increased to, at least, 5 percent, adding that the penalties from gas flaring would be used to ameliorate the living conditions in Niger Delta communities, as they suffer from the environmental impact of oil exploration.
“The reason we are insisting on at least 5 percent of operational expenses of oil companies for the host communities is because of the stability as their operational expenses will always remain stable.
“The moment you say it should be profit after tax, we know what they will do. They will claim all the exemptions that, at the end of the day, you end up with nothing. But they must have their expenses. So we are insisting that we should be given at least 5 percent of that.”

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