The governor said 50 per cent of the derivation fund is allocated to oil producing communities.
A total of N149 billion was released to oil producing communities in Delta State for development projects in the last five years, the State Governor, Emmanuel Uduaghan, has said.
Mr. Uduaghan gave the figure in Asaba on Monday, when members of Revenue Mobilisation, Allocation and Fiscal Commission, RMAFC, led by its Chairman, Elias Mbam, paid him a courtesy visit.
He said that the explanation about the use of the funds became necessary, as a statement credited to the RMAFC chairman last week accused state governors of the oil producing states of under-utilising the 13 per cent oil derivation fund.
Mr. Uduaghan said that contrary to the claims by the commission’s chairman, Delta State is not misusing the derivation fund. He said 50 per cent of it had been allocated to Delta State Oil Producing Area Development Commission, DESOPADEC, which is the government agency that executes development projects in oil producing communities.
Mr. Uduaghan agreed to the RMAFC suggestion to use the derivation fund for the benefit of oil producing communities.
“That makes a lot of sense, because when you develop the oil producing communities, there is a peaceful environment for the production of more oil,” Mr. Uduaghan said. “For us in Delta, what had been done several years back, by my predecessor is to enact a law that would ensure that the revenue goes to oil producing communities.
He said DESOPADEC has its headquarters in Warri, an oil producing area.
The governor said Delta is committed to economic diversification because of the vulnerability of international oil prices and dwindling revenue from taxation due to the new Personal Income Tax Law.
He told the visiting RMAFC officials, who visited Asaba for an advocacy workshop on economic diversification and enhanced revenue generation that the state government strives not to rely on the monthly federation account.
He added that a chunk of revenue accruing to the state from the federation account is used to develop other potential sources of revenue, such as tourism, agriculture, and solid minerals.
Mr. Mbam commended Uduaghan for accepting to host the zonal advocacy workshop on economic diversification and enhanced revenue generation.
He said the workshop is consistent with the commission’s responsibility to advise the three tiers of government on how to improve their revenue.
“It is the belief of the commission that unless we diversify beyond oil and gas, our vision for 20:2020 would be a mirage,” he said.
Mr. Mbam urged all states and local governments in the South-South zone to improve their revenue earnings and take “the monthly allocation from the federation account as a grant for infrastructure development.”