N/Delta Lawmakers Push for 25% Derivation Fund Increase

Atleast nine members of the House of Representatives have introduced a bill to increase the derivation fund from the current 13 percent to 50 percent in a move aimed at securing greater financial autonomy for the Niger Delta region. 

This legislative initiative, which has already passed its first reading, is set for discussion on the House floor next Tuesday.

The proposed legislation seeks to amend Section 162 (2) of the Nigerian Constitution by removing the existing paragraph and replacing it with a new provision that mandates a minimum of 50 percent of revenue from all natural resources and value-added tax (VAT) to be allocated based on derivation.

Lead sponsor of the bill, Mr. Iwaji-Inombek Abiante, representing Andoni/Opobo/Nkoro federal constituency of Rivers State, emphasized that the initiative is designed to foster development across Nigeria’s 36 states where mineral resources are extracted. He argued that the increased allocation would not only benefit the Niger Delta but also enhance national development.

Abiante described the current 13 percent derivation rate as inadequate, contributing to illegal exploitation of resources and environmental degradation. He stressed that passing the bill would combat oil theft, illegal mining, and pollution, leading to more significant investments in social, economic, and security infrastructure.

He called for a united front to amend the revenue sharing formula, citing the historical context of previous constitutions from 1960 and 1963 that supported higher derivation rates. “Let us indeed renew the hope not only of our founding fathers but also that of generations after us,” he stated.

Abiante also added that incorporating VAT revenues into the derivation formula would promote competition among states, making them more attractive for investment and boosting overall productivity. He framed the initiative as aligned with the principles of equity and justice, ensuring that states contributing to the nation’s wealth receive a fair share of the benefits.