The 13 per cent derivation revenue payments to Nigeria’s oil-producing states from the Federation account rose by 10.40 per cent or N11.80 billion to N125.28 billion in January this year, compared with N113.48 billion in the previous month, New Telegraph’s analysis of the latest communiqué issued by the Federation Account Allocation Committee (FAAC) has shown.
The country’s oilproducing states such as Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Imo, Edo, Ondo, and Rivers, are statutorily required to be paid 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 whose environments are typically negatively impacted by oil exploration and production activities.
Thus, a statement released by the Director, Information and Public Relations at the Federal Ministry of Finance, Mohammed Manga, last week, on the outcome of the FAAC meeting for February 2025, said that the committee shared a total sum of N1.703 trillion to the three tiers of government as Federation Allocation for the month of January 2025 from a gross total of N2.641 trillion.
The statement further said: “From the stated amount inclusive of Gross Statutory Revenue, Value Added Tax (VAT) and Electronic Money Transfer Levy (EMTL), the Federal Government received N552.591 billion, the States received N590.614 billion, the Local Government Councils got N434.567 billion, while the Oil Producing States received N125.284 billion as Derivation, (13% of Mineral Revenue).
“The sum of N107.786 billion was given for the cost of collection, while N830.663 billion was allocated for Transfers Intervention and Refunds.”
New Telegraph reports that compared with 2022 and 2023, the country’s 36 states generally benefitted from higher FAAC allocations last year, especially from exchange rate gains in the oil sector and increased oil production, as a result of reforms introduced by the President Bola Tinubu-led administration when it came into office on May 29, 2023.
Indeed, an analysis of FAAC communiqués and data released by the National Bureau of Statistics (NBS), last year, indicates that 13 per cent derivation revenue payments to the oilproducing states, from the Federation account, jumped by 102.26 per cent (N679.26 billion) to N1.34 trillion last year, compared with N664.22 billion in the preceding year.
Interestingly, the Organisation of Petroleum Exporting Countries (OPEC) recently announced that Nigeria’s average daily crude oil production increased significantly to 1.53 million barrels per day (bpd) in January this year.
This means that the country, for the first time, met the global oil cartel’s production quota of 1.5 million bpd since it was set — for the 2024 period — at OPEC’s ministerial meeting on November 30, 2023.
