Kogi to benefit from 13% oil derivation fund

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The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has approved the attribution of Oda River oil well- 1 wholly to Kogi state.

This is contained in a letter signed by M.B Shehu, secretary to RMAFC, and dated August 24, 2021.The letter with reference RMC/COD/58/VOL/I/4 was addressed to Yahaya Bello, governor of Kogi state.With this development, Kogi officially joined the list of oil producing states and eligible for the 13 percent derivation fund.

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The 13 percent derivation fund comes from the federation revenue to oil-producing communities through the state governments as enshrined in section 162, sub-section 2 of the Nigerian Constitution.TheCable had earlier reported that the RMAFC approved the attribution of eleven oil wells wholly to Anambra state.RMAFC said Anambra state would benefit from the 13 percent derivation fund once the proceeds from the oil wells are contributed to the federation account.

In the letter sent to Bello, RMAFC also approved the attribution of Anambra River one, two and three oil wells to be shared on a fifty percent basis between Anambra and Kogi — pending the final delineation of boundaries between the two states.“I wish to refer to your letter dated 10″ August 2021 on the above subject and to inform you that the commission at its 139th plenary session held on 27″ July 2021 approved the attribution of Oda River oil well-1 to Kogi State,” the letter reads.“Furthermore, the Commission approved the attribution of Anambra River 1, 2 and 3 oll wells on a 50:50 percentage basis between Anambra and Kogi States pending the final delineation of the boundary between the two States.“Accordingly, Kogi State will start to benefit from the 13% Derivation fund as soon as proceeds from the operation in Oda River 1 oil well or Anambra River 1, 2 or 3 oil well starts contributing revenue into the Federation Account.”

A report published earlier this year noted that eight oil-producing states including Abia, Akwa-Ibom, Bayelsa, Delta, Edo, Imo, Ondo and Rivers received N6.589 trillion from the federation account under the 13 percent derivation principle, between 2009 and 2019.

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