Nine Oil States Share N341bn Derivation Funds Amid Debt, Infrastructure Challenges

The nine oil-producing states of Nigeria received a total of N341.59 billion from the federation account in the first half of 2024, allocated based on the 13 percent derivation formula.

This formula ensures that 13 percent of the revenue generated from natural resources like oil is distributed to the states where these resources are extracted.

According to the National Bureau of Statistics (NBS), Delta State received the largest share, totaling N113.78 billion, or 33 percent of the total allocation.

Akwa Ibom followed with N70.01 billion, representing 20 percent of the total disbursement. Other states included Bayelsa with N64.04 billion, Rivers with N58.78 billion, and Edo with N11.90 billion. Imo, Ondo, Anambra, and Abia received N5.72 billion, N10.05 billion, N4.13 billion, and N3.19 billion, respectively.

Despite these substantial funds, the states continue to grapple with severe debt and deteriorating infrastructure.

As of Q1 2024, Edo State had the highest debt stock at N490.67 billion, followed by Delta with N413.75 billion, and Rivers with N340.25 billion. Other states also face significant debt, with Imo at N265.98 billion, Abia at N232.17 billion, and Akwa Ibom at N199.62 billion.

In 2022, Delta and Akwa Ibom were the top recipients of derivation funds, with Delta receiving N296.63 billion and Akwa Ibom N222.52 billion. The situation remained critical in the first half of 2023, with Delta and Akwa Ibom again receiving the largest shares.

Calls for better management of these funds have been raised.

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Edwin Clark, leader of the Pan-Niger Delta Forum (PANDEF), criticized former Delta Governor Ifeanyi Okowa for allegedly mismanaging the derivation funds, suggesting they were not adequately invested in the oil-producing communities.