THIRTEEN PERCENT DERIVATION FUND: MORE QUESTIONS THAN ANSWERS
The principle of derivation as encapsulated under the proviso to Section 162 (2) of the 1999 Constitution as amended. It is geared towards providing recompense to the producers of any natural resources for the expropriation and sequestration of their rights to control and manage same, by the Nigerian State.
The percentage of revenue paid to the oil-producing states from the oil that is produced from their areas has been a matter of contention since oil was first discovered in Nigeria. The 1999 constitution provides that at least 13 percent of the revenue derived from natural resources should be paid to the states where it is produced, though there have been substantial delays in calculating and paying these sums. The federal government only began making payments in accordance with the increased allocation in January 2000, although they fell due from June 1999, and in practice has never paid the 13 percent minimum. Nonetheless, allocations from the federal government to the oil-producing states have increased markedly since 1999, rising to 25 percent of the amount paid out to states from the “federation account” in 2001 (the equivalent of just over U.S.$1 billion), from 12 percent in the second half of 1999 (or approximately $120 million). The main oil producing states – Akwa Ibom, Bayelsa, Delta, and Rivers – have about 10 percent of the population of Nigeria. These payments have not satisfied residents of oil-producing areas who feel they still do not receive adequate benefits from the oil. Individuals and groups from across the political spectrum in what is known as the “south-south” zone of Nigeria have demanded that the oil producing states assume “full control” over their natural resources, and pay tax from those revenues to the federal government. They also demand the repeal of a number of laws that give control over land and mineral resources to the federal government.
Despite claims of neglect and abandonment, investigation has revealed that governments of oil-producing states in Nigeria had over the years, failed to utilize the resources provided them to develop their states and the region. Data obtained from a series of reports from the Central Bank of Nigeria, CBN, revealed that oil-producing states in Nigeria received N7.006 trillion as payments under the 13 per cent Derivation principle over the last 18 years, from 1999 to 2016.
The oil producing states are Akwa-Ibom, Rivers, Delta, Cross River, Edo, Bayelsa, Abia, Ondo, Imo, Anambra, and of recent, Lagos State. Analysis of the payments showed that from 1999 to 2003, N360.4 billion was paid to oil-producing states; N1.338 trillion were paid to the states between from 2004 and 2007; 2008 to 2011 saw the states receiving N2.36 trillion, while from 2012 to 2016, the states received N2.947 trillion. Ironically, the 2017 budget of all the states, inclusive of Lagos, stood at N3.165 trillion, about half of the amount received by the states from the Federation Account under the 13 per cent derivation principle.
The huge sum notwithstanding, the Niger Delta region is still suffering from massive infrastructure decay, widespread poverty and environmental degradation, among numerous others. The 13 per cent derivation fund has been a subject of controversy between the oil-producing communities and their various states government, with the former asking the Federal Government to stop paying the money directly to the communities and not into the coffers of the state.
The federal government has announced on several occasions the priority it gives to development in the Niger Delta, including by establishing a Niger Delta Development Commission. But the announcements have not led to significant improvements on the ground. In particular, little of the money paid by the federal government to state and local governments from the oil revenue is actually spent on genuine development projects: there appears to be virtually no control or proper audit over spending by state and local authorities-despite the federal government’s creation of an Independent Corrupt Practices Commission (ICPC) with the mandate to investigate such wrongdoing
Recently, the revelation of Governor Nyesom Wike of Rivers State that President Muhammadu Buhari approved and paid the arrears of the 13% derivation fund to Rivers, Bayelsa, Delta, Edo and Akwa Ibom states came like a bombshell. Wike spoke on the arrears during the inauguration of the N17billion Port Harcourt Campus of the Nigerian Law School. The governor said President Buhari’s gesture was the major source of revenue for his projects, including the flyovers, the law school and the cancer centre. He was quoted as saying: “Monies that were not paid to the Niger Delta states since 1999 mainly 13 per cent deductions, the President approved and paid all of us in Niger Delta states.” Wike repeated his comments at two other events afterwards.
Wike’s revelation has raised another series of questions such as what have the other governors who received a similar windfall been doing with their own? How much was received by each state? And did they just receive it and keep quiet? How will they expend it? Or will they just walk away with it or utilize it as campaign funds in an electioneering period like this or use it for other extraneous purposes that are not related to the yearnings and aspirations of the people of the state who are supposed to be the major beneficiaries? Another important question that comes to mind is how such conspiracy of silence was possible in a democracy and where there are a plethora of checks and balances put in place which is expected to put people in the know.
We at CACOL, would like to know the exact amount collected by each of the states involved, how the money was spent or is being spent. We would also use this medium to call on the anti-corruption agencies to investigate the governors of the states concerned including Rivers, so as to be sure that the quantity and quality of the projects executed is commensurate with the money collected.
The Centre for Anti-Corruption and Open Leadership, CACOL, has taken a swipe at the activities of some committees of the National Assembly alleged to be passing budgets for ministries, departments and agencies of the Federal Government illegally.
In a release issued by CACOL and signed by Tola Oresanwo, the organization’s Director of Administration and programmes on behalf of its Chairman, Mr. Debo Adeniran, he remarked, “It would be recalled that President Buhari, while laying the 2023 Appropriation Bill before a joint session of the National Assembly on October 7, 2022, slammed committees of the parliament who were bypassing him and approving budgets for government-owned enterprises without his approval.”
It is instructive to note that the House of Representatives’ Committee on Public Accounts has confirmed the allegation by the President, Buhari, that some committees of the National Assembly are passing budgets for ministries, departments and agencies of the Federal Government illegally.
The Punch newspaper reported that the committee, after making the discovery, wrote to the Secretary to the Government of the Federation, Boss Mustapha, and the Clerk to the National Assembly, Amos Ojo, to confirm if Buhari actually transmitted the MDAs’ budget to the parliament or not.
The action of these dishonourable legislators is not only an affront to the president but one illegality too great being committed against Nigeria and Nigerians.
Going by the principle of separation of powers, the legislators ought to know their limits when it comes to budgetary processes of the government and its MDAs. The President is expected to transmit budgetary proposals of MDAs to the National Assembly, while the clerk transmits passed budgets to the Presidency for implementation.
We at CACOL would like to use this medium to condemn the action of these legislators and call on the Senate and the House of Representatives’ Committees on Public Accounts to investigate the Chairmen of the committees involved in this illegality and report them to anti-graft agencies for appropriate prosecution and sanctions.
The country is currently grappling with so many challenges most of which are man-made and corruption is at the root of most of the country’s woes. Hence, this illegal action of these committee Chairmen must not be condoned and the allegations against them must not be thrown under the carpet. Members of the public should be put in the know regarding the outcome of investigation into the case and those found culpable should be made to face the full wrath of the law so as to serve as deterrent to others.
PRESS BRIEFING ON PRIORITIZING ANTI-CORRUPTION AND SOCIAL INCLUSION IN THE 2023 POLITICAL AGENDA: IMPERATIVES AND COMPONENTS, ORGANIZED BY THE CENTRE FOR ANTI-CORRUPTION AND OPEN LEADERSHIP (CACOL) HELD ON 30TH MARCH, 2022.
Good morning, ladies and gentlemen of the press.
Corruption, wherever it occurs, represents a decline in our value system as a nation. If left unchecked, it poses a grave threat to our democratic values and our dream of being an ethical and truly developing state. Corruption is committed by individuals who are driven by greed; they steal state resources, business opportunities and consciences of civil populace that are intended to grow the economy, eliminate poverty and ensure the achievement of development outcomes.
Corruption is commonly but, unofficially conceptualized as the misuse of public office for private gain. The Constitution of the Federal Republic of Nigeria provides that the ”State shall abolish all corrupt practices and abuse of power” (Nigerian 1999 Constitution Section 15.5). Similarly, the Act establishing the Nigerian Independent Corrupt Practices (ICPC) criminalizes corruption. According to Transparency International, corruption is: “Misuse of entrusted power for private gain” (TI 2013). Corruption includes abuse of power, but it is a larger concept and a much more serious issue than the misuse of public office for private benefits. Corruption is the breach or perversion of legal rules, established procedure, and code of conduct or social norms and values in the service of unethical or illegitimate ends. Nonetheless, CACOL defines corruption as any act of dishonesty.
The issue of corruption has continue to draw lots of attention to Nigeria and controversies in Nigeria as a result of the negative impression, perception and reputation that successive Nigerian government has earned for the country in various areas where countries of the world are ranked as far as corrupt practices are concerned.
It is against this background and the need to shift the paradigm of corruption fighting away from the ruling class that has been committing corruption crimes to the right holders who have been suffering the jeopardy resultant from such criminal activities that the Centre for Anti-Corruption and Open Leadership, (CACOL) have had series of consultative meetings with some prominent Community Based, Civil Society and Faith Based Organizations in Lagos State. The fora presented an avenue for us to intimate them on the roles they are expected to play in prioritizing anti-corruption, accountability and social inclusion issues in Lagos State as the State prepares for upcoming 2023 elections. All the CBOs, CSOs and FBOs consulted expressed happiness and appreciation at the fact that such a meeting had been organized to involve them on the roles expected of them prior to 2023 elections. They also assured us of their continued cooperation and support.
From our consultative meetings with the CSOs, and FBOs in the state, it is a unanimous opinion that corruption in Nigerian environment is an act deliberately perpetrated by policy makers and a contradiction of democratic values and principles by politicians thereby thwarting accountability and transparency. Corruption is systemic in Nigeria leading to a particularistic political culture in which values are allocated based on one’s connections in the society and not merit. The weakening of political institutions and lack of political willingness in combating corruption made it a bane for good governance and development in Nigeria. The efforts to fight corruption were sabotaged by policymakers as anti-graft agencies were politicized and turned into a tool for intimidation of opposition.
Corruption is exhibited by elites in forms of bribery, extortion, nepotism, cronyism, patronage, graft and embezzlement. Corruption has been institutionalized in the entire Nigerian system including political, administrative, and bureaucratic. Corruption in Nigeria has been perceived as a brazen squander of public treasury by office holders impoverishing the masses and leading to low infrastructural development. Corruption in Nigeria is perceived either in the form of grand, bureaucratic and legislative corruption. Corruption in Nigeria can be seen in the jumbo payment of salaries to political office holders while paying the average worker a meager amount not plausible for survival.
Nigeria’s Fourth Republic commenced on the 29th May, 1999, with great hope and expectations in spite of the fact that the process was initiated and mid-wived by the military that had perpetually held on to political power and so lacked the moral justification to convince the generality of the people of its success. Many people saw the development as a dawn of a new beginning for good governance and democratic dividends. However, the euphoria that greeted the return to civil rule has been replaced by frustration and hopelessness as those elected by the majority to represent the people continue to live in opulence that does not conform to the present economic realities. Campaign against corruption by successive regimes has remained mere rhetoric just as the rule of law is mere pronouncement. Although the country has held six general elections (1999, 2003, 2007, 2011, 2015 and 2019), so far they have all been marred in controversies, fraudulent practices by both the electoral body and the security agencies with credibility and legitimacy crises as end products. In fact, it has been argued in several fora that corruption remains the worst problem challenging and hindering the country’s socio-economic and political development. In recent times, many development scholars and public affairs commentators have concluded that the socio-political and economic woes of Nigeria are rooted in corruption.
Electioneering in most multicultural societies like Nigeria is a deliberate agenda of the elites to polarize voters along ethnic and religious lines. As such, campaign messages are usually tainted with sentiments and hate speeches to divert the attention of the electorate from the real socio-economic problems of the state. Although the 2015 Presidential Election has been described as historic in the annals of Nigeria’s democratic journey, emerging realities necessitate the review of the link between campaign propaganda, electoral outcome and dynamics of governance in the post-2015 era. We have observed that high-level campaign propaganda influenced voter choices and ultimately, contributed to the victory of an opposition party in the 2015 Presidential Election. However, the winning party has substantially failed to deliver some of its electoral promises. Instead, it has deployed the state power in pursuit of sectional interests. We believe that this trend can be reversed if key democratic institutions are established and strengthened in Nigeria.
In Nigeria, political parties and candidates are usually seen as representatives of ethnic or religious groups. Individuals have strong attachment and allegiance to their ethnic nationalities and religion since these variables often constitute basis for political patronage and reward. As a result, voters are incapable of making objective political decisions on the basis of the antecedence and competence of candidates, as well as the ideological leaning of the political party. Rather, electoral choices of individuals are informed by ethno-regional and religious considerations, and pattern of voting reflects deep polarization of the electorate along parochial interests. Indeed, political parties and candidates exploit this deep vacuum to frame campaign propaganda that depicts the north-south dichotomy in order to influence electoral outcome.
Political parties have undeniably assumed an indispensable status in the democratisation process given the critical role they often play in effectuating good governance, the rule of law and human rights protection. Beyond this, political parties are seen as platforms through which the mobilisation and enlightenment of the citizens on the policy direction of the state are made possible. They perform the latter function by organizing opinions and attitudes around sets of issues of public importance which would subsequently be disseminated to the electorate through various the mass media. The essence is to consciously modify the voters’ worldview in line with the programmes, sentiments and proposals of the party in order to elicit either objective or subjective support from the targeted group.
Election promises have come to represent one of the fundamental elements of the representative democracy through which hopes and expectations are created and sustained in any society. It is also the larger context of the strategies which political parties adopt to stimulate voter turnout, motivate supporters to vote in an election and, ultimately, determine the outcome of the election. Thus, given the general distrust against election promises by the citizens, the tripodic linkage between campaign promises, election outcomes and post-election governance have constantly remained the subject of scientific inquiry. Essentially, the crux of the inquest has revolved around: inspecting the electoral promises made by politicians and political parties before an election, determining how it largely influenced the outcome of the election and understanding the modalities on ground to faithfully convert these ideas into reality in the post-election governance.
In advanced democracies like the United States and United Kingdom, election avails voters opportunity to objectively scrutinize and analyze the programs of political parties and competence of candidates. Election messages are designed in line with the prevailing socio-economic challenges of the state. In Nigeria, reliance on ethno-religious considerations for electoral decisions as seen in the 2015 presidential elections have polarised voters along religious and ethnic lines. Inciting messages, questionable promises, hate speeches, and campaign of calumny were features of the 2015 presidential electioneering. Absence of issue-based campaign in Nigeria has led to disputed elections, undermined the emergence of competent leadership, exacerbated social crises, and deepened acrimonious relationship among the citizens.
We are not unaware that faith-based organizations and ethnic-based communities have naturally been part of basic consideration in socio-political power play in Nigeria. Our concern is hinged on those demographics that are only theoretically included but practically excluded in the scheme of administering their lives and that of their progeny. They are those that we have earlier stated – the physically disabled, youth, women, displaced people, people in the rural communities, illiterates, etc. These are groups that have constitutional rights to be included in the scheme of political considerations but have no specific rights that are justiciable, that could be asserted, when such people are excluded in the act of governance. We recognize that faith-based tendencies and ethnic affinities have been adequately taken care of as primordial conditions for elections and appointments as government functionaries, albeit we disagree with using religion or ethnicity as parameter for selecting candidates for elective and appointive political offices and responsibilities. It is our belief that the principle of merit should primarily be upheld towards ensuring that it is only the most qualified in terms of technical knowledge, cognate experience and good quality of mind that are the reasons why a person is elected or appointed to serve the appropriate position of authority.
In order to ensure social inclusion in the electoral process, voters must be given information about how to register, where to register and when the registration centre is open. Women, youth, people living with disability, internally displaced people etc. may also need encouragement to register, in particular where cultural norms imply that elections are a male domain, where there is illiteracy or where there is widespread political apathy. In most countries with high illiteracy rates, women constitute the largest proportion of illiterate voters. In some contexts, it will also be necessary to ensure that information is provided in local languages.
Why is it important to foster youth political participation?
It’s a known fact that in many political parties, the relationship between youth and the parties is strained. To break a cycle of skepticism and mistrust, youth can develop the skills and motivation to successfully interact with political parties. At the same time, political parties could be encouraged to create space for them by removing barriers to youth involvement. In some contexts, youth wings of political parties have played a central role, by providing a powerbase for young members, retaining and grooming them, and reaching out to young voters.
Participation is a fundamental democratic right. It should be an end in and of itself to remove existing barriers to youth political participation. From a more purely pragmatic perspective, if young people have the perception that formal political processes are not accessible and/or attractive for them; this can shape their attitudes for a lifetime, with potentially long-lasting negative impacts on a country’s political culture.
It has been found that in new and emerging democracies, the inclusion of youth in formal political processes is important from the start.
Through their active contributions, democratic values can come to life, paving the way for the overcoming of authoritarian practices. In countries where youth led protests have forced authoritarian regimes from power, significant frustration is likely to arise if youth are not included in new formal decision-making procedures. This might have a destabilizing effect on democratization.
Further evidence suggests that youth are more inclined to participate in informal political processes. Activism, protests and campaigns are common avenues; youth are often driving forces behind reform movements. In the current world and throughout history, there are many examples of powerful youth-led protest movements. Youth also tend to get involved in civic, service-oriented activities, such as volunteering for a social cause. Many young people are more inclined to join a tree-planting project, for example, than to join a political party talking about planting trees in the future.
We would therefore make the following recommendations based on the unanimous opinion from our consultative meetings with the CSOs and FBOs in the state:
1. It is our recommendation based on our findings on the field that there is an urgent need to overhaul the whole gamut of election architecture in Nigeria through aggressive and comprehensive reforms. Firstly, there is need to strengthen the administrative, financial and institutional autonomy of INEC to regulate the use of hate speech during electioneering. In most cases, the Electoral Management Body (EMB) lacked the capacity to punish highly placed public officials who violate extant electoral rules and guidelines mainly due to institutional incapacitation. The institutional weakness no doubt, has hindered effective coordination of the electoral processes by the EMB. Secondly, INEC should be empowered to punish any candidates found to have violated the new electoral law by disqualifying and banning them from participating in elections for a minimum of eight (8) years.
2. The statutory functions of the National Orientation Agency (NOA) should be expanded to undertake the democratic role of political education and enlightenment of the electorate on the borderline between conventional campaign promises and political propaganda. In carrying out this function, the agency must prioritize use of indigenous languages in order to get to wider audience not conversant in English language. By so doing, the electorate would be well-informed on what constitutes a realistic campaign promise and a mere slanderous propaganda targeted at discrediting an opponent unjustly and scoring cheap political popularity. The NOA should also insist that Nigerians deserve the truth and should be told the truth and nothing more, no matter how unpalatable it may appear.
3. The media must be regulated by law to disseminate objective messages during electioneering. Specifically, it must be restrained from being an appendage of a given political party, showing preference for any candidate and serving as tool to disseminate disinformation and hate speeches.
4. The Civil Society Organizations (CSOs) drawn from academia, trade unions, media and social research institutes should jointly conduct background checks on contestants and manifestoes of political parties, and subsequently, educate voters on the qualification of candidates and feasibility of their programs. Most importantly, CSOs should organise and insist on compulsory participation of all candidates in a televised debate. In most cases, presidential candidates abscond from debates and only educate the electorate on the policy direction of their parties during campaign tours. In Nigeria, political campaign tours is an inappropriate means of educating voters since actors utilise the platform to showcase their dancing skills, engage in names calling, and reel out questionable campaign promises.
5. Equivalent media fact-checking tools such as the Politifacts which finds out when politicians are making false claims; Truth-O-Meter that tells the voters whether the politician is saying the truth or not, and Flip-O-Meter that tells when politicians are flip-flopping promises during campaign, should be established in Nigeria.. As a corollary, fact-checker would help political actors to articulate issue-based campaign programmes reflecting the peculiar challenges of Nigerian state rather than relying on disinformation as viable means of accessing political power. The utilization of the fact-checking tools in Nigeria could help to limit hate speeches and spread of questionable campaign messages. Again, it will serve as a viable instrument for deepening democracy in Nigeria. However, the absence of these tools suggests that political parties and candidates are unhindered from coining and spreading controversial electoral promises.
6. Financial flow of political parties in terms of their income and expenditures should be closely monitored and the political actors should be compelled to give blow-by-blow account with verifiable evidence in terms of bank statements, payment receipts, etc. to ensure that they don’t overspend and they should not receive cash donations from their patrons or members. All contributions and payments to their service providers, consultants, etc. should be made through financial institutional transfers. Moreover, no politician should be allowed to distribute cash to electorates or people at the campaign grounds. The distribution of palliatives like food, household items and the rest should be limited to electorates at ward level and it should be tied to the needs of the people. The cost of the palliatives and the expenses incurred to distribute it should be manifestly accounted for. Politicians who have emerged as candidate of political parties should not distribute palliatives at all while aspirants at their ward level can do that in order to ameliorate some of the sufferings of their constituents but as soon as they emerge as candidate of their political party they should not indulge themselves in such things.
7. We would also lend our voice to the call for speedy determination of so many high profile corruption cases dotting the various temples of justice across the country. The cases involving Stella Oduah, former Minister of aviation, Orji Uzor Kalu, former Abia State Governor, Rochas Okorocha former Imo State Governor, Theodore Orji, former Abia State Governor and many other serving Senators still having corruption cases hanging on their necks should be dispensed with as soon as possible so as to serve as deterrents to others.
It is generally believed that corruption is responsible for the perpetual underdevelopment of our country and this had been enabled directly and indirectly by the custodian of the governing instrument which in most cases were not freely given by the citizens through their periodic voting exercises. We believe that this can be corrected if all the available legal instruments are diligently implemented by the wielders of political power imbued by the persistent demand of the citizenry. The citizenry can force the hands of the government officials backward from making corruption a state policy by perpetual monitoring of their activities in and outside of their places of official engagements and questioning them on issues of probity, accountability as well as insisting on the observation of all democratic principles and ethos. This is what CACOL has taken upon itself in collaboration with willing hands in the civil society and the populace to engender with a view to ensuring that corrupt elected officials are not welcome back into their ancestral communities. We believe this will deter others who flaunt ill-gotten wealth from continuing in that trade and ensuring that the innocents of their communities are not polluted to the extent that upcoming political elements will not see corruption as a dignifying career that they could adopt just like internet fraudulent practices is gaining ground among the younger generation.
Thank you for your attention.
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