Anambra will not get 13% oil derivation fund yet, revenue agency says

Commission wants Anambra to wait for boundary delineation by the National Boundary Commission

Despite recent reports that commercial oil production has commenced in the Anambra oil fields, the state will not be immediately listed among the beneficiaries of the oil derivation fund, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has said.

RMAFC Chairman, Elias Mbam, said this in Asaba on Monday, during a workshop the commission organised in conjunction with Delta State Government on economic diversification. He said becoming a beneficiary of the 13 per cent oil derivation revenue is not automatic.

“Derivation fund is clearly defined in the constitution”, Mr. Mbam said. “Derivation fund does not say when we see solid minerals or any other kind of natural resource in a place, one starts benefiting automatically.

“One only benefits when that mineral resource contributes to the Federation Account. So, the existence of a mineral resource does not make Anambra automatic beneficiary of the 13 per cent (derivation fund),” he added.

Oil derivation revenue is normally paid monthly to all constitutionally recognised oil producing states. This is in addition
to the excess revenue in the Federation Account which is shared among the 36 states of the federation and the Federal Capital Territory (FCT).

Since President Goodluck Jonathan declared last month that Anambra state is now one of the oil producing states in the country, there has been agitation for the state to be listed among the beneficiaries of oil derivation revenue. Mr. Jonathan made the declaration at the opening of an oil refinery by Orient Petroleum Resources Plc in Aguleri, Anambra East Local Government Area (LGA).

Mr. Mbam, however, says that though crude production has commenced in area, the state in whose territory the oil wells are located would only be entitled to oil derivation revenue, when it starts contributing to the Federation Account.

The president’s pronouncement has since triggered a claim by the neighbouring Kogi State. Kogi wants to be classified as an oil producing state by virtue of some oil wells it claims are located in its territory, at Odeke community.

The RMAFC Chairman said his commission is yet to receive any reports from the two states bordering on disputes over the ownership of oil wells. He said the agency is well positioned to handle any issue amicably at the appropriate time.

He identified the National Boundary Commission (NBC) and the Surveyor-General of the Federation (SGF) as having the responsibility of delineating boundaries between states and ensuring that boundary issues are settled.

He said even when oil starts coming out of the wells, and the country starts getting value from them, the NBC and SGF still need to confirm the exact boundary and the location of the oil wells.

“Once the location of the oil wells are delineated by the appropriate government agencies, the Commission would not hesitate to act accordingly,” he assured, pointing out that unless Nigeria diversified its economic base beyond oil and gas, the vision to be among the top 20 economies by year 2020 would be a mirage.

Mr. Mbam said the workshop, themed “Economic Diversification and Enhanced Revenue Generation’’, is a starting point for advocacy in the country’s six geo-political zones for the diversification of the country’s economy. He said the workshop has been held in the North Central, South West and South-South zones.

The workshop featured presentations on the key sectors of the economy, including agriculture, solid minerals, tourism and manufacturing.


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  • Okeke nwankwo

    Funny story.Anambras oil is NOT NEW.Kogi claim there are two wells in their state then let Orient drill from two wells and lets see if it will flow and how economically it will be. The oil in Anambra state is OLD and had been known to be there for long.Two oil wells in Kogi s practically non economical and cannot make kogi oil producing.Israel once had such that produced 200 barrels a day.That did not make Israel oil producing.Simply put Kogi does not have oil in commercial quantity.