13% Derivation: Oil Producing States Receive N601.48bn In H1’24

July 23, 2024

2 minute read

Nigeria’s oil producing states got a total of N601.48 billion from the Federation account as 13 per cent derivation revenue in the first six months of this year, findings by New Telegraph show.

An analysis of Federal Account Allocation Committee (FAAC) communiqués and FAAC reports, published by the National Bureau of Statistics (NBS), indicates that the amount is N303.84 billion or 102.08 per cent higher than the N297.64 billion that the states received in in the corresponding period of 2023.

A breakdown of the data shows that the oil producing states received N57.92 billion in January, N85.10 billion in February, N166.24 billion in March, N90.12 billion in April, N106.50 billion in May and N95.60 billion in June as 13 percent derivation revenue payments from FAAC.

Nigeria’s constitution stipulates that oil producing states are entitled to receive 13 per cent of oil revenue from the Federation Account as Derivation Fund, which they are expected to use for the exclusive benefit of their oil/gas producing communities that are usually negatively impacted by mineral exploration and production activities.

According to a statement issued, a few days ago, by the Director, Press and Public Relations, Office of the Accountant General of the Federation, Bawa Mokwa, on the outcome of the July FAAC meeting, the Federal Government, states and Local Government Councils (LGCs) shared the sum of N1.354 trillion in June revenue, which represents an increase of N21 billion compared to the N1.14 trillion shared in May.

The amount comprised statutory revenue of N142.514 billion, Value Added Tax (VAT) revenue of N523.973 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.692 billion, Exchange Difference revenue of N472.192 billion, and an augmentation of N200 billion.

Specifically, the statement said that from the shared amount of N1.35 trillion, the Federal Government received N459.7 billion, states got N461.9 billion and local government councils received N337 billion. It added that oil-producing states received N95.5 billion as 13 percent derivation revenue payments.

In its “Nigeria Development Update” publication, released in December, the World Bank predicted that while it expected Federation transfers to states to stay relatively constant in real terms in 2023, oil producing states were likely to get N52 billion more in Federation transfers than 2022 levels.