To benefit from 13% derivation fund
Emmanuel Addeh
Anambra State has officially joined oil-producing states in Nigeria, following an approval granted by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), which has ratified the attribution of 11 oil wells to the state.
With the approval, the South-eastern state is expected to henceforth be eligible to benefit from the 13 per cent derivation fund, which minerals-producing states in Nigeria are statutorily entitled to.
For the state, it has been a long-drawn-out battle to be recognised as an oil-producing state, but with the Department of Petroleum Resources (DPR) insisting for years that the state has not met all the pre-conditions to be added to the list.
Two years ago, the DPR when confronted by the Senate on why the state had not been recognised, insisted that Anambra, Enugu and Kogi States could not be declared oil-producing states until the company prospecting for the commodity scaled up its operations from an oil prospecting to oil mining lease.
But in the approval which was contained in a letter signed by the Secretary to the RMAFC, Mr. Mohammed Shehu, and dated August 24, 2021, the commission stated that Anambra will be eligible for the 13 percent derivation fund immediately it begins to contribute to the federation account.
Addressed to Governor of Anambra State, Mr. Willie Obiano, the letter with reference RMC/O&G/48/VOL/I/55, stated that the decision to designate the state an oil-producing area was taken at the RMAFC’s 139th plenary session held on 27, July 2021.
In addition, the revenue mobilisation body also approved the attribution of Anambra River 1,2 and 3 oil wells to be shared on a 50 per cent basis between Anambra and Kogi states, pending the final delineation of boundaries between the two states.
“I wish to refer to your letter dated 24th March, 2021 on the above subject and to inform you that the commission at its 139th plenary session held on 27th July 2021 approved the attribution of the following oil wells to Anambra State: Nzam-1 oil well, Alo-1 oil well, Ogbu-1 oil well, Ameshi 1, 2, 3 and 4 oil wells, Enyie 1, 2, 3 and 4 oil wells.
“Furthermore, the commission also approved the attribution of Anambra River 1, 2 and 3 oil wells on a 50:50 percentage basis between Anambra and Kogi states pending the final delineation of the boundary between the two states.
“Accordingly, Anambra State will start to benefit from the 13 per cent derivation fund as soon as proceeds from the operation in the abovenamed oil wells starts contributing revenue into the federation account,” the federal agency stressed.
With the inclusion, Anambra has now joined the league of 10 other oil-producing states that are statutorily entitled to the derivation fund.
Akwa Ibom, Rivers, Delta, Bayelsa, Ondo, Edo, Imo , Abia and Lagos States, are the other sub-nationals in the country which have crude oil in their areas.
