In the first half of 2024, nine oil-producing states in Nigeria shared a total of N341.59 billion from the federation account, courtesy of the 13% derivation formula. This revenue-sharing mechanism is enshrined in Section 162 (2) of the constitution, ensuring that 13% of natural resource revenues, such as oil and gas, are paid directly to the states where they are extracted.
According to data from the National Bureau of Statistics (NBS), the beneficiary states were Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers. Delta State received the largest allocation, totaling N113.78 billion, followed closely by Akwa Ibom with N70.01 billion.
Despite receiving significant funds, these oil-producing states struggle with debt and infrastructure decay. In 2022, Delta and Akwa Ibom received the highest amounts, but in 2023, the nine states shared N544.9 billion, with Delta receiving N180.1 billion and Akwa Ibom receiving N130.8 billion.
However, the Debt Management Office (DMO) reports that these states have substantial debt stocks, with Edo leading at N490.67 billion, followed by Delta at N413.75 billion, and Rivers at N340.25 billion. This raises concerns about the management of the 13% derivation funds, with some leaders alleging mismanagement and calling for greater transparency and accountability in the use of these funds.
