N-Delta Civil Society Forum Urges FG to Establish Derivation Boards, Correct 13% Implementation Error
By Tessy Ogbemi
Abuja, Nigeria — The Niger Delta Civil Society Forum (NDCSF), Edo State chapter, has called on the Federal Government to immediately reform the method of disbursing the 13 percent derivation fund by paying it directly to oil, gas, and mineral resources-producing communities rather than through state governments.
The appeal was made in a statement issued in Abuja on Sunday, November 30th, 2025, by the Edo State Coordinator of NDCSF, Comrade Desmond Monday Igwemon, and circulated to newsmen.
Igwemor stressed that Section 162, Sub-section 2 of the 1999 Constitution clearly mandates that the 13 percent derivation fund is designed exclusively for the development of oil- and gas-producing communities. He noted that the fund serves as compensation for the extensive loss of fishing rights, farmlands, and livelihoods resulting from decades of oil and gas exploration across the Niger Delta.
He further highlighted that the Nigerian Extractive Industries Transparency Initiative (NEITI) defines the 13 percent derivation as a constitutionally backed financial incentive meant to reward host communities for their production input and to encourage cooperation and peaceful coexistence for optimal crude oil and gas production.
“Although some states have created oil-producing area development commissions to implement community-based projects, the reality is that many of these commissions operate like private enterprises under the control of state governors,” Igwemor said. “They have been politicized, underfunded, and, in many cases, rendered completely ineffective.”
He argued that these systemic failures underscore the urgent need for President Bola Ahmed Tinubu to restructure the framework by which the derivation fund is managed. According to him, the 13 percent derivation is listed under Item 39 of the Exclusive Legislative List, which places all oil and gas matters solely under the jurisdiction of the Federal Government.
“This means that only the President has the constitutional authority to correct the long-standing anomaly in the administration of the derivation fund,” he said. “The current practice of paying the fund through state governments is unconstitutional, ineffective, and contrary to the intention of the drafters of the Constitution.”
Igwemon recalled that during the administration of former President Shehu Shagari, derivation funds were paid directly to host communities through derivation boards, a model he said ensured accountability and visible impact.
He insisted that since oil and gas remain on the Exclusive Legislative List, state governments have no legal authority to act as intermediaries in the management of derivation funds. The Forum described the ongoing practice as a clear violation of two critical constitutional provisions:
1. The Separation of Powers, which reserves oil and gas governance exclusively for the Federal Government.
2. Section 162(2) of the 1999 Constitution, which defines the 13 percent derivation as a first-line charge on the Federation Account.
“As a first charge, the 13 percent derivation fund must never be routed through state governments or any third-party channels,” the Forum emphasized. “It must be paid directly to oil and gas-producing communities through democratically constituted derivation boards to ensure transparency, development impact, and justice for the people whose lands and waters bear the burden of Nigeria’s wealth.”
The NDCSF urged President Tinubu, the National Assembly, and relevant federal agencies to initiate immediate reforms to correct what it described as decades of constitutional misinterpretation and injustice against oil-producing communities in the Niger Delta.
