By Constance Meju
A survey to determine how the 13 percent derivation fund running into billions of naira accrued to Delta State has impacted development in the oil and gas producing areas of the state has revealed deep dissatisfaction of the host communities with services by the government and recommended an immediate statewide needs assessment and a commitment to improve the provision of social amenities to the people.
The report titled, ‘Report of Survey on the Use of 13 Per Cent Derivation Fund in Selected Niger Delta States’, conducted by Kebetkache Women Development and Resource Center based in Port Harcourt and funded by the Ford Foundation, covered 1999 -2012 and sought to examine how the quantum of funds specifically allocated to states in the oil region has impacted the lives of host communities and how institutions set up to manage the fund have fared, where set up. Between 20143 and 2017, Delta State received N710billion from the federation account making it the third highest revenue earner after Akwa Ibom, N964.9billion and Rivers State, N737.3billion.
The study covered Akwa Ibom, Bayelsa, Cross River, Delta and Rivers states and samples were drawn from two local governments in each state representing one located in the capital and another in an oil host zone. A hundred persons were sampled as respondents in each state.
Objectives of the study were: to examine the performance of state governments in terms of delivery of development to inhabitants of the oil and gas producing areas; to examine the extent to which people of the oil and gas producing areas have benefitted from the derivation fund; to examine institutions established by state governments for the sole purpose of managing the derivation fund and, to examine the peoples’ view on how to make governance of derivation resources pace transparent and accountable to the people of the oil and gas producing areas.
Overall, responses from the respondents reveal that governance of the derivation fund has not made significant impact on the oil bearing communities despite the huge revenue accruing to the states over the years and succession of governments and corruption were mostly blamed for this. The derivation fund though considered minuscule, has grossed N7trillion in the last 13 years (1992-2012) but, “its impact remains largely unnoticed in the oil bearing communities which have continued suffer neglect and deepening improvement.
Also, whereas the states are to set up institutions to specifically manage the 13 per cent derivation fund, only Delta State among the four states in the study area, has a commission set up to specifically manage the fund.
There is also, a general dissatisfaction with the performance of the affected state governments resulting in a call by the communities for a re-routing of the derivation fund through the state governments to a proposed derivation fund commission.
In Delta State, the survey focused on Oshimili South Local Government in the state capital, and Warri South Local Government Area and 98 of the 100 questionnaires administered were returned and used for analysis. Ten communities were sampled in all-Okwe, Ako-Amakun, Oko-Anala, Asaba and Oko-Obiokpu in Oshimili South LGA and Ubeji, Milla Waterside, Egbokodo Itsekiri Warri, Ugbuwangwegne and Ogunu from Warri South LGA.
From the responses and focused group discussions, it was revealed that availability of social services to both oil and non-oil producing LGAs in the state is still low despite the 13 per cent derivation fund; though a major contributor to the oil wealth, Warri South local Government Area lacked social amenities.
Respondents said, “most of the available social services facilities are either inadequate or in a sorry state”. They listed in the order of importance, needed services as electricity, education, employment, portable water and healthcare.
Good governance is about service delivery but the state government merely crossed the pass mark as it scored an average of 50.38 per cent in the provision of social amenities with health care facilities availability ranking highest at 8.60 per cent, educational facilities services 63.50 per cent, electricity 50 and public transport 50 per cent.
According to the respondents, the Delta State government fell short in the provision of portable water (37.40 per cent), and employment (18.40 per cent).62.20 per cent of the sampled opinions said portable water was not available in their communities/neighbourhood, 36.50 per cent said no to availability of educational opportunities while 49 per cent scored government low on provision of electricity.
Poor provision of electricity was however, attributed to the ineptitude of power distribution companies although 22.4 per cent blamed the absence of transformers and electric poles.
As important as water is to life, coupled with the fact that pollution from oil and gas activities has greatly reduced natural safe clean water accessible to oil communities, this basic social service is hugely unavailable in Delta State. 62.20 per cent of respondents said portable water was not available in their communities or neighbourhoods. Only 27 per cent of the entire Niger Delta populace according to the survey, have access to clean and portable water due to ground and surface water pollution arising from petroleum industry operations and other challenges in the region.
Delta State Government performed better in the field of education as only 36.50 per cent of the respondents do not agree to availability of educational opportunities.
With regard to other social needs, 83.70 per cent of the respondents would like to such services as electricity, educational opportunities and facilities, employment opportunities, portable water and improved healthcare in their localities.
Overall, 82.70 per cent respondents rated the state government a failure in the provision of social services while only 17.30 per cent rated the government good in the delivery of social services.
Respondents from Warri South, the oil producing local government are more dissatisfied with government performance in relation to provision of social amenities while 54.3 per cent of the 81who failed to rate the state government ‘good’ in social service provision were resident in that LGA against 37respondents from Oshimili South. Among the 17, who, rated government ‘good’ in social service delivery, four were from Warri South and 13 from Oshimili South.
Respondents blamed poor government social delivery on successive bad governments (48 per cent), corruption (17.30 per cent) while 24.5 per cent had no opinion on the matter.
According to the survey findings, “Unemployment, poor social services (healthcare and education), and poor infrastructure”, were given as the three major reasons for dissatisfaction with the Delta State government and the urgent needs expected to be addressed are, “employment, social services (healthcare, education, portable water, etc.)
The study also revealed a level of difference in education attainment between residents in the two LGAs- while majority of the respondents from Oshimili South completed secondary education, only a few did in Warri South and while majority of the people in the state are civil servants, in Warri South, the major means of employment are the private sector and self-employment in trades.But with regard to shelter, more persons in Warri South live in own duplex apartments while more in Oshimili South share rooms. This may not be unconnected to engagement in business opportunities offered by oil operators in that area.
Although Warri South Local Government Area is an oil and gas producing area, education attainment there is low as from the study most respondents completed only primary education with only 10 of the 16 (20.83per cent) of the respondents completing only primary school education against respondents from Oshimili South’s record of 59.93 per cent (33 of 56) who attained post-secondary education.
It was clear that the people understood what 13 per cent derivation is from both LGAs though, not all the respondents were in agreement on how it should be spent. While majority feel it should be spent on oil and gas communities alone, a few feel it should touch all parts of the state.
The major fall out of the dissatisfaction with government provision of services lies in the non-impact of the Delta State Oil Mineral Producing Communities Commission, DESOPADEC set up by the state government to specifically manage the derivation fund and spread development to the grassroot oil communities.
The state is the only state of the four covered by the study, which has set up such a commission and allocates 50 per cent of the fund to it, but nothing significant has been recorded since its inception.
The report states: “Though majority of the participants are aware of the establishment of an agency/constitution (DESOPADEC) by law to receive and administer exclusively a percentage (50 per cent) of the 13 per cent derivation fund accruing to the state, the general perception is that DESOPADEC since its establishment over 10 years ago, is yet to fulfill its mission as government presence is still not adequately felt in mostly the oil producing LGAs”.
With this disappointment over management of the fund, majority of the respondents want a new approach to the disbursement of the derivation fundto ensure the money is expended on impactful projects for the people. Currently, the fund goes directly to the state government from the Federal Allocation Commission, FAC.
“The participants endorsed approaches like direct disbursement of 13 per cent derivation fund to the oil producing communities, sharing of 75 per cent of the 13 per cent derivation fund to developing oil producing LGAs while the remaining 25 per cent (goes) to developing the rest of the state by the state government and establishing a body to represent all wards to monitor and supervise the utilization of the 13 per cent derivation fund,” the report stated.
Moving forward, the survey noted that a sound management of resources which engenders development outcomes is a key indicator of good governance and that from responses gathered, the people of Delta State are yet to experience good governance despite huge financial resources ploughed into the state through the derivation fund.
To achieve the much yearned for good governance, it recommended the immediate conduct of a statewide need assessment on social amenities by the Delta State government advising that to do so effectively, “consultative meetings with communities on project/programme needs should be done extensively” and as fast as possible.
It called for the declaration of a state of emergency in the area of provision of social amenities to bring about serious commitment by the state government through prioritizing construction of new social facilities, completion of on-going projects and renovation of existing ones in bad shape.
In the area of transparency and accountability, the study recommended regular (monthly or quarterly) release of detailed reports on revenue received by the state to the public as well as financial details of planned projects and programmes to help stakeholders in the communities and civil society organizations effectively monitor and evaluate activities of government agencies and development intervention institutions in the state.
On the more knotty issue of appropriate institution to effectively manage the derivation fund, the survey stated that leaving it to DESOPADEC as a statewide body could be cumbersome make achieving objectives and delivery of mandate difficult over a shortest period of time and recommended, “the establishment of specific state development intervention institutions to attend to the development needs of specific areas of the state like, ‘Riverine’ and Upland Areas with DESOPADEC playing the coordinating role”.
To ensure development institutions perform credibly, the study further called on the state government to not only state financial commitments to institutions like DESOPADEC but also endeavor to achieve prompt 100 per cent disbursement of funds.
It also recommended a review of acts establishing development intervention institutions in the state as well as punitive measures for officials found fraudulent.
It noted, “It has become common knowledge that ineffectiveness of existing development intervention institutions are not met with stiff punishment. Poor coordination of projects and sharp practices among officials of existing development intervention institutions, among others, have mitigated against delivery of mandate. Reviewing the act establishing existing development intervention institutions such that it should spell out stiff punishment for negligence of duty by management and board of institutions, misappropriation of funds, poor monitoring of projects, abandoning of projects and poor coordination by institutions (are therefore necessary)”.
A validation exercise for the research took place at the Ford Foundation headquarters, Lagos on November 6, 2019. An identified general problem was an envisaged difficulty in arriving at the best channel for an alternative disbursement of the derivation fund in view of the evident failure of community leadership structure in the region.
