Oil-producing states share N341.59bn in H1 2024 amid debt, Infrastructure challenges

Nine oil-producing states in Nigeria received N341.59 billion from the federation account in the first half of 2024 under the 13 percent derivation formula, which allocates a portion of the country’s oil and gas revenue to the states where these resources are extracted.

Delta State received the largest share with N113.78 billion, followed by Akwa Ibom with N70.01 billion.

Despite these allocations, many of these states continue to struggle with high debt and poor infrastructure. Delta and Edo lead in debt burden, with figures of N413.75 billion and N490.67 billion, respectively.

This formula is rooted in Section 162 (2) of the constitution, which mandates that 13 percent of the revenue generated from natural resources, such as oil and gas, should be paid directly to the states where these resources are extracted.

Data from the National Bureau of Statistics (NBS) showed that Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers were states that received the funds in the six-month period.

Analysis of the report showed that Delta received the highest allocation, totalling N113.78 billion — representing 33 percent of the total disbursement.

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Delta is followed closely by Akwa Ibom, which got N70.01 billion or 20 percent of the total disbursement.

Other states include Bayelsa (N64.04 billion), Rivers (N58.78 billion), Edo (N11.90 billion), Ondo (N10.05 billion), Imo (N5.72 billion), Anambra (N4.13 billion) and Abia (N3.19 billion).

In 2022, Delta and Akwa Ibom were the oil-producing states that received the highest amounts from the federation account, with Delta receiving N296.63 billion and Akwa Ibom receiving N222.52 billion.

In the first half of 2023, the nine oil-producing states shared N544.9 billion from the federation account, with Delta receiving the largest allocation of N180.1 billion, followed by Akwa Ibom with N130.8 billion.

Despite receiving these funds, the oil-producing states continue to face significant debt and poor infrastructure conditions.

According to the Debt Management Office (DMO), as of Q1 2024, Edo had the highest debt stock of N490.67 billion (domestic and foreign obligations) compared to other oil-producing states. Delta followed with N413.75 billion debt while Rivers recorded N340.25 billion.

The debt figures for other states were as follows: Imo (N265.98 billion), Abia (N232.17 billion), Akwa Ibom (N199.62 billion), Bayelsa (N182.17 billion), Anambra (N177.08 billion), and Ondo (N123.09 billion).

Concerns have been raised about the management of the funds, with accusations of mismanagement and a lack of accountability, particularly in Delta State.