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How DESOPADEC 50 percent derivation fund is frittered

*Uduaghan allegedly involved

A federal indictment have revealed how a high profile fraud running into several billions of naira is being perpetrated at the Delta State Oil Producing Area Development Commission (DESOPADEC).

From 2010 to 2012, Governor Emmanuel Uduaghan of Delta State allegedly became involved in the racket amounting to over N120.3billion.

An impeccable financial expert revealed that the amount represents about 23% of the total of N452.8 billion received by the state government as its share of the 13 per cent derivation within the period under review.

The document which was obtained by THEWILL indicated how part of the 50% of the 13% derivation fund accruing to the commission is allegedly being siphoned.

Investigations following the document, revealed that since 2010 to 2012 appropriation year, DESOPADEC have allegedly received only N104 billion in three years instead of N226.4 billion as 50% of the state’s share of the 13% derivation fund.

The document from the Federal Ministry of Finance revealed that Delta State received N120.6 billion, N176.2 billion and N156 billion as its share of the 13 per cent derivation fund in 2010, 2011 and 2012 respectively, bringing it to a total of N452.8 billion.

Another documents which gave the breakdown indicated that in 2010, 2011 and 2012, the sum of N35, 000,000,000, N35, 500, 000, 000 and N37, 000,000,000 were budgeted for the commission respectively.

The financial expert who gave the breakdown said; “Out of these, if the state’s claim of giving 50 per cent to DESOPADEC were true, the commission ought to have received N60.3 billion, N88 billion and N78 billion respectively during the period"

"But, DESOPADEC received only N32 billion, N35 billion and N37 billion as budgetary allocations from the state government between 2010 and 2012, leaving a shortfall of N122.4 billion unaccounted for".

"Since 2007 till date over N300 billion have been misappropriated by the Governor and nobody is asking questions for the fear of the uncertainty"

“The governor had several claim that he always released all funds accruing to the commission to it and we know it is all lies but who can dare challenge him....our House of Assembly that could have being checkmating the governor has been cowed as a result they are called rubber stamp Assembly".

Dependable sources at the commission and the Sate Ministry of Finance who were contacted to verify the allegations revealed that the amount so far received by the state government on the 13 percent derivation fund amounted to over N8.282trillion from year 2000 to June 2013.

Our sources who spoke separately also accused the neigbouring state's government of mismanagement of the 13 percent fund adding that the 13% have become the highest fraud for the nine benefiting states of Ondo, Edo, Delta, Bayelsa, Rivers, Akwa/Ibom, Cross-Rivers, Imo and Abia. "There is no evidence on ground to show for the huge allocations over the years",they added.

Corroborating this, the leadership of the Oil and Gas Producing Communities of Nigeria which have been agitating for a fair deal for the oil producing communities revealed that Akwa Ibom, Rivers and Bayelsa States had so far received a total of N492.8 billion as their share of the 13 per cent derivation allocation for 2012.

Giving a breakdown, they disclosed that from January to December 2012, Akwa Ibom collected a total of N193.69 billion, Rivers got N165. 33 billion while Bayelsa got N133.77 billion as 13 percent allocation.

It could be recalled that sometime ago the leadership of Oil and Gas Producing Communities of Nigeria had allegedly called the governors of the nine oil producing states thieves for allegedly embezzling whopping sum of over N8.1trillion naira between 2000 to June 2013 to the detriment of poverty-stricken oil producing communities.

In a petition to the Nigeria Extractive Industrial Transparency Initiative (NEITI) singed by Chief William Igere, Pastor Macpherson Kurobo, Chief Harry Opaks, Saviour James Okon, Princess Nomwen Uhunmwangho as well as Comrade Samuel Ebiwanno respectively, sometime ago and was obtained by THEWILL, the group said that besides the uncovered frauds in the fuel subsidy regime, the application and allocation of 13 percent derivation fund is indeed the highest fraud in the continent of Africa.

The group in its petition made available to THEWILL charged the Economic and Financial Crime Commission (EFCC) to urgently commerce a high power probe to ascertain the actual usage of the funds in the past 13 years.

The group said that as provided in the Constitution, Section 162 (2), 13 percent is a compensation for loss of fishing rights and loss of productive farmland therefore oil and gas producing communities are the exclusive beneficiaries of 13 percent derivation fund.

Besides, the group said that the 13 percent fund was in existed before any revenue formula or revenue sharing by FAAC stressing that the 13 percent allocation is kept aside constitutionally or removed from the total oil revenue before sharing between the Federal, State and Local government.

“To verify our claims, we are ready to take any Federal government delegation on tour of the oil/gas producing states to ascertain if actually such huge trillions of naira have been expended there. Currently Akwa-Ibom, Rivers, Bayelsa and Delta states received between N120 and N200 billion yearly as 13 percent derivation fund", the group said.

Meanwhile, the Urhobo Youth Assembly (UYA) has called for direct allocation of the 13% derivation funds to oil producing communities through National and states Derivation implementation committees as currently been done under the petroleum subsidy regime.

This was contained in a memorandum to the Chairman Revenue Mobilization, Allocation and Fiscal Commission entitled; "Request For Direct Allocation of 13% Derivation Funds to Oil Producing Communities in Nigeria Via National Derivation and States Implementation Committee”.

"As a group that believes in the rule of law, equity, justice and fair play, we think the continuous allocation of 13 percent derivation funds through the state governors is an implementation tragedy as section 162 (2)of the 1999 constitution is very clear on issue of who get what and for what purposes".

Signed by its President, Comrade Jude Akpore, Comrade Frank Onogagamue, Secretary and Comrade Akpoboro Isaac, the group said; “That important section of the constitution says that 13 percent derivation fund be paid to the source of derivation and the source of derivation by legal understanding is the oil and gas bearing communities and not the states as currently been practiced and if you recall the recent clamour by the Northern governors against 13percent is not because they are against the allocation of the money to develop the people but they are against our governors collecting money and turning almost the money to personal use which is against the constitutional provisions".

“We want state unequivocally that the 13% derivation fund was never part of any State consolidated revenue. Therefore, it is not and was not part of consolidated revenue of the Oil Producing States".

"This view and position has been upheld by the Revenue Mobilization, Allocation and Fiscal Commission as contained in their submission to the 6th National Assembly in 2008 during the presidency of the late Alhaji Umaru Musa Yar’ Adua, in that submission, the Revenue Mobilization, Allocation and Fiscal Commission stated that the 13% derivation fund is not part of the consolidated revenue of any State Government".

“We want to recall that the struggle for the 13% derivation fund came to its peak during 1994/95 constitutional conference of the late General Sani Abacha military rule. The Oil Producing Communities assembled traditional rulers, youths, men and women and travelled many times in large delegations to the constitutional conference to press for the increased in derivation from 3% to 25%.”

It would be recalled that in February, 2013 during the Good Governance Tour of projects in Asaba, Uduaghan had told a town hall meeting that he has released N160 billion to the Delta State Oil Producing Area Development Commission (DESOPADEC) from 2007 till date for oil producing communities.

“Since I came in 2007 till date, I have been able to release N160 billion to DESOPADEC for the development of the oil producing communities. About 50 percent of the state’s 13 percent derivation funds have always been released to DESOPADEC to manage.” he said.

Similarly, the state Commissioner for Information, Mr. Chike Ogeah had always claimed that the governor had always released money accruing to the commission saying that the state government releases as much as 50 per cent of the 13 percent to the oil communities which he described as a novel in the Niger Delta region.


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