In Niger Delta, Wealth Generates Poverty: What is the Impact of 13 per cent Derivation Fund?  


By: Stephen Obodoekwe


DESPITE huge oil revenues that have been generated and are still being generated from the oil rich Niger Delta region of Nigeria since oil and gas activities commenced in commercial quantities several decades ago, many Niger Delta communities have been wallowing in abject poverty.


Underdevelopment and increasing poverty have been the major challenge of the Niger Delta. It is a paradoxical case of wealth generating misery, sadness, suffering in the midst of plenty and hopelessness rather than generating joy, progress and development among others.


In addition to debilitating poverty, people in the area have to drink, cook with and wash in oil polluted water; they eat fish contaminated with oil and inhale polluted air. And there is no adequate access to health care to take care of the negative impacts of these poisonous pollutions on the health of the people.


Niger Delta is a region associated with administrative neglect, crumbling social infrastructure, high unemployment, and environmental degradation among other vices.


Agitations in the past for resource control by people of the region have given rise to the 13 percent derivation formula which stipulates that 13% of oil revenue of the country should be given back to the oil bearing states to cushion the impacts of oil extractive activities on the people of the area.


Although the 13% is far below the 100% resource control which the people agitated for, it was expected that it would fast track the development of the region as huge amounts of money would be pumped into the region through the derivation formula.


Indeed, several trillions of Naira has accrued to the region since the implementation of the revenue sharing formula, about 20years ago started. The trillions were remitted to the governments of the Niger Delta states on a monthly basis.


Unfortunately, the high hope and great expectations that the lots of the communities in the region would be bettered seem to have crumbled as many communities and people have continued to dive deeper into abject poverty.


It is as if increased wealth has pushed them deeper into the pit of poverty and misery. The derivation fund has rather generated loss of trust and faith between state governments and the people whose needs they ought to take care of with the proceeds of the 13 percent derivation funds.


Indeed, “there are contentions by disenchanted people of oil bearing communities that the deepening impoverishment of their communities is as a result of state governments’ illegal and mindless appropriation of the derivation fund meant for the development of oil bearing communities in the Niger Delta” according to a report emanating from focused group discussions carried out recently by KebetkacheWomen Development and Resource Centre, a foremost Port Harcourt based women focused Non Governmental Organisation in a research funded by Ford Foundation, in some states of the region on the impact of the 13% derivation on the communities.


Community representatives lamented that although from 2007 to 2014, a total of seven years, not less than one trillion, seventy-four billion, fifteen million, five hundred and eighty-two thousand naira (N 1,074,015,582,000.00) has been remitted to the oil and gas producing communities in the Niger Delta from the 13 percent derivation funds, yet, there are no remarkable impacts of such huge amount of money in the economy of the region.


In Delta state for instance where the revenues from the 13% derivations are purportedly channeled to the communities through Delta State Oil Producing Area Development Commission (DESOPADEC), a commission set up to manage the funds with core objective of ensuring that the oil communities benefit maximally from the 13 percent derivation accruable to the State, there are complaints that most communities, especially communities in Warri South LGA have not felt the impacts of the presence of the commission.


Many insisted that if any fund has been allocated to the communities, such allocation did not get to the communities, but must have ended up in few hands within the leadership of such communities or in the hands of some commission members.


They maintained they were not aware of any allocation of funds to their communities, complaining bitterly that activities of the commission, as well as allocations given to the communities through the commission are always shrouded in secrecy. This makes it easy for those entrusted with the funds to corner them for their private use, to the detriment of the communities.


It was noted that things that were made to benefit the entire community are used by few of the community leaders in alliance with the commission members. A case was mentioned of a community leader who kept to himself, tricycles given by the commission for youth empowerment. While the tricycles rot away in the garage of the community leader, the youths who ought to be empowered through the project continue to roam the community due to joblessness.


While oil money continues to flow into the coffers of these states, and into the private pockets of few benefit captors and commission members, paradoxically, most oil-producing communities remain poverty-stricken, plagued by unemployment, and are devoid of basic social amenities like potable water, hospitals, electricity, motorable roads, and conductive learning environment in their schools (where schools exist).


The few community leaders who have participated in pocketing the wealth meant for their communities are said to have become excessively rich, while majority of the people they lead, as well as their communities, remain symbols of miseries and hopelessness.


Revenues from the 13% fund have made the Niger Delta Governors to become emperors and commissioners for 13 percent derivation. Community leaders who Have access to the derivation funds have equally become lords and emperors; they are not accountable especially under the pervading culture of impunity in the society. Even if they are found to have embezzled money, nothing happens. “The evidence of the plundering of the derivation funds are everywhere – the properties they buy, their children are overseas attending very expensive schools, they live life of affluence and extravaganza”, said one of the discussants who pleaded anonymity.


Community members during the focus group discussion recommended among others that there should be effective monitoring of the operations of the commission to checkmate nefarious acts within the commission.


Appointments into the leadership of the commission should be democratized, rather than being a form of settlement for loyal political appendages. Above all, each community of the oil producing communities should be and must be aware of the amount given to their community by the commission and who received the money and how the money is spent.

Styvn Obodoekwe writes from Port Harcourt






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