Nigeria: Civil society demands presidential board for 13% derivation fund

A coalition of civil society organizations in Nigeria's South-South region is pressing President Bola Ahmed Tinubu to reform the administration of the constitutional 13% Derivation Fund. The Niger Delta Civil Society Forum advocates for a Presidential Board to enhance accountability, transparency, and ensure the fund directly benefits oil-producing communities.

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revisit the calls for reforms in the administration of the constitutional 13 per cent Derivation Fund by establishing a Presidential Board to strengthen accountability, transparency and ensure direct developmental impact in oil-producing communities

The Forum argues that the derivation principle is a constitutional mandate, distinct from the Petroleum Industry Act (PIA), which serves different objectives. They contend that redirecting statutory funds meant for host communities while claiming the PIA addresses their needs is "unparalleled absurdity."

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derivation principle is constitutional, while the Petroleum Industry Act is a separate legislation enacted for entirely different objectives

According to the Forum, the PIA allocates three percent of operating expenditure for community development through its relationship with international oil companies. However, the 13% derivation fund derives its authority directly from Section 162(2) of the 1999 Constitution. The group emphasizes that the PIA contains no provisions referencing or replacing the 13% derivation principle, which is constitutionally designed as compensation tied to oil production volumes from specific communities.

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unparalleled absurdity to redirect statutory funds meant for host communities and then claim that the PIA has addressed their needs

The Forum questions whether the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) understands the legal basis and intent of this constitutional provision. They lament that the current disbursement structure has led to "elite capture," alleged misallocation, and widespread dissatisfaction across the Niger Delta, despite the fund's compensatory nature and intended direct benefit to oil-producing communities.

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There is no provision within the PIA that references or replaces the 13 per cent derivation principle.