13% Derivation and the Gov Wike Challenge
On November 18, just about two weeks ago, Gov Nyesom Wike of Rivers State blew the lid of what had appeared like a wellkept secret by the Niger Delta state governors. Gov Wike had, during the commissioning of one of his many projects, disclosed that he is funding his projects from the arrears of 13% derivation fund which the federal government has paid to the Niger Delta States.
Although he did not give specific figures received by each of the nine Niger Delta States, latter day revelations have indicated that the money is over N9 trillion, collectively. In the past two weeks, many of the concerned states, feeling very uncomfortable with Wike’s “basket-mouth” revelations, have been struggling to defend themselves, giving what is clearly an after-thought explanation.
Many of the arguments from the states is that they did not receive or have not received as much as has been credited to them. But that is not quite the issue. The concern of many Niger Delta stakeholders is the quiet and silence that surrounded the release all along. If Wike funded many of his projects from the proceeds of that 13% derivation fund, it means that the fund had long been released for it to fund a project that is being commissioned.
Hear him: Let me say it for the first time. So many people asked me, Where is he getting this money? Let me say it…. These are “monies that were not paid to the Niger Delta States since 1999—the 13% deductions. Monies that were not paid… Mr President approved it and paid all of us from the Niger Delta States”, adding that, “and for me, it would be unfair not to tell the public. It is not from FAAC money. It is the money that is supposed to be for Rivers, Delta, Akwa-Ibom, Edo and Bayelsa States” .
So,the question s why did the Niger Delta states not disclose to their various people that such funds had been released? All of them have prepared and submitted their 2023 budget estimate. Did any of them disclose that they received or planned to receive 13% derivation, as one of their sources of revenue in the coming year?
I ask this question because the Commissioners for Finance in Delta and Edo States, Fidelis Tilije and Joseph Ebiogbe, respectively, have explained that the funds are being disbursed in tranches of quarterly releases. So, did they indicate in the 2023 budget estimate that part of their projected revenue in-flows is from the 13 per cent refund?
The other worry expressed by the people of the concerned states is what indeed the various state governors have done with the windfall they got from the federal government. It is instructive that many of the states are not only still owing their senior citizens their pensions and gratuities, the states have gone ahead to borrow so much money from banks, in spite of the 13% largess. So, the question remains: where is the money they collected?
Perhaps what appears to be an answer came
from the Bayelsa State governor, Douye Diri, who spoke though his Chief Press Secretary, Dan Alabra. He had explained that in anticipation of the money they were expecting from the 13% disbursement, many of the states had “discounted” the money. What that means in simple language is that the governors, had gone ahead to borrow money from the bank in lieu of the money they were expecting. And so, when the funds came, the banks merely withheld the funds as agreed before loaning the states some money.
Both Eboigbe and Tilije had further explained that the payments which were sourced from looking closely into the books of the NNPC, and discovering unremitted funds to the Niger Delta States, had to go through the Federal Executive Council meeting which gave approval for the payments. The payments are to be made in 20 tranches spreading through five years. Only about three or so tranches have been paid.
From the figures obtained, Delta State topped the chart with N142 billion, followed by Akwa-Ibom with N91 billion, Bayelsa (N87 billion) Rivers (N83 billion), Edo (N17 billion) Ondo (N12 billion), Imo (N10 billion) and Abia (N5 billion).
Although Delta state admitted receiving N14.7 billion in three quarterly payments, but went ahead to “access” N30 billion from banks out of the N100 billion bridging funds sought by the Delta State government. In other words, those expecting to hear of mega projects being funded or to be funded from the 13% remittal should forget it because not only has the N14.7 billion received been spent, the state has even borrowed extra N30 billion ahead of the payment of other tranches, in what looks like anticipated expenditure.
Even at that, the question will yet resonate: what has the Delta State government done with the money received thus far and the ones borrowed? Many pensioners are languishing in penury and lack in the state.
Although Tilije and Eboigbe claimed that their various state governments are committed to the ethos of accountability and transparency, none of them ever made known the fact that they received any such money before the Wike expose. It is not a hidden fact that many of the state governors have been reckless, wasteful and less than altruistic in the management of the funds available to them
The Akwa-Ibom state government has admitted receiving N18.6 billion out of its own share, while the Edo State government said it has only received N2.1 billion out of its share.
What has been discovered however is that the impression Gov Wike gave: that all the 13% accruals since 1999 has been released in one bulk sum, is not true. Yes, the figures have been approved, but not all of the monies have been released to the states. Fund approved is not fund released. So did Gov Wike set out to be a little mischievous by releasing a not-too-correct information on his colleagues? Perhaps! Out of the eight other states of the Niger Delta, Gov Wike is politically chummy with only one: Gov Okezie Ikpeazu of Abia State. Did he thus release the information to set the people of the various states against their governors? Again, perhaps!
Surely, Gov Wike couldn’t have funded the many overhead bridges from the three or so quarterly payments he got on the 13% derivation fund. He has been exceptionally lucky with fund inflow, what with the Supreme court judgement of last May 6 that ceded the disputed 17 oil wells between Imo State and Rivers State to Rivers State. The income from there is huge, and it adds to the substantial amount the state gets as a leading oil producing state. What’s more, the state government received N78.9 billion as reimbursement for federal roads constructed by the Rivers State government, under the administration of Rotimi Amaechi, as governor of the state.
But if you discount the little measure of mischief in the information released by Gov Wike, the fact will yet remain that many of the Niger Delta states have been running clouded administration where their transactions are classified. The Minister of state for Budget and National Planning, Mr Clem Agba, last Wednesday confirmed that the federal Government released some huge sums to the Niger Delta state governors, lamenting that some were denying and giving “half truths” about the amount they received. Agba blamed the governors for the rising poverty cases in the country as they were embarking on projects that have no direct benefits to the masses. He cited projects like airports and needless fly-overs, noting that instead of building rural roads to enable the rural dwellers have access to their farms and cities. He accused the governors of embarking on gallery projects that will attract applause but with minimal impact to the masses.
Many of the governors which are serving out their second term in office are already plunging their states into depths of debt by borrowing huge sums from banks for some nebulous and amorphous projects.