Civil society stakeholders in the South-South region under the auspices of the Niger Delta Civil Society Forum have urged President Bola Ahmed Tinubu to “revisit the calls for reforms in the administration of the constitutional 13 percent Derivation Fund by establishing a presidential board to strengthen accountability and transparency and ensure direct developmental impact in oil-producing communities.”
According to the Forum, the “derivation principle is constitutional, while the Petroleum Industry Act is a separate legislation enacted for entirely different objectives”.
This was contained in a statement signed by its Coordinator, Mr. Ezekiel Kagbala, on Monday.
The Forum, while reacting to a letter by the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) dated April 15, 2026, on the constitutional administration of derivation revenues, maintained that it is an “unparalleled absurdity to redirect statutory funds meant for host communities and then claim that the PIA has addressed their needs.”
The statement added, “The derivation principle is constitutional, while the Petroleum Industry Act is a separate legislation enacted for entirely different objectives.”
The forum posited that the PIA governs the relationship between international oil companies and host communities through the provision of three per cent of operating expenditure for community development, “whereas the 13 per cent derivation fund derives its authority directly from Section 162(2) of the 1999 Constitution (as amended)”.
The statement added, “There is no provision within the PIA that references or replaces the 13 per cent derivation principle.
“Legally, the 13 per cent derivation fund is not mentioned anywhere in the PIA. The derivation principle is tied to the volume of oil production from producing communities and was constitutionally designed as compensation.
“We are compelled to ask whether the Revenue Mobilisation Allocation and Fiscal Commission is unaware of the legal foundation and intent of this constitutional provision.”
While insisting that the derivation fund is compensatory in nature and fundamentally intended to benefit oil-producing communities directly, the forum lamented that the current disbursement structure has exposed the fund to elite capture, alleged misallocation and growing dissatisfaction across the Niger Delta.
