Nigeria And The Politics of 13% Derivation
By: Nurudeen Dauda
Permit me to state that I do not have any problem with Gov Bago’s demands for 13% derivation for Niger state from FG for generating power, but it is however apt to know the power generation mix of Nigeria. In Nigeria we currently rely largely on “Gas power plants” to generate electricity. By my records about 80% of our electricity generation is through “Gas power plants” only about 20% of our generation is through “Hydro power plants”.
In my thought, there are a lot of unresolved issues on 13% derivation. It is apt to state that, right from the day we refused to “properly treat” the issue of “Onshore” and “Offshore” dichotomy in the allocation of 13% derivation of oil revenue to oil producing states was the very day we began to short- change the non-oil producing states of Nigeria.
It is alleged that about 80% of the Nigeria’s crude oil resources are “Offshore” which means by international law is a resource that belongs to the federation as a whole not the states where it is being extracted from. Only about 20% of the crude oil resources in Nigeria is “Onshore”. The 13% derivation of oil revenue to oil producing states is supposed to be on the only 20% Onshore crude oil resources not the entire crude oil resources. In Nigeria of today, 13% derivation of oil revenue to oil producing states is being deducted on both “Offshore” and “Onshore” oil resources without any dichotomy.
Revenue allocation formula in Nigeria remains a very contentious “issue” that has not been properly resolved. Some Nigerians were of the opinion that “population”, “landmarks”, and number of local governments should be given priority in terms of revenue allocation while others who are mostly from the oil producing states prefer “derivation” as the most important factor for revenue allocation. There are advocates of resource control in the country and or at least the increase in the derivation revenue to 50% who are mostly people from the oil producing states.
In my observation, every state of the federation has one form of resources or the other ranging from landmarks, fertile land for agricultural activities, solid minerals resources, and crude oil resources etc. It is sad to note that, as a country we neglect our various natural resources which are spread in virtually every state of the federation. It is high time we have a rethink!
In my thought, whether resources control or whatever it is high we agree on what will lead to the maximum utilization of our various resources for the benefits of our people. It is high time we come out with laws that will encourage every state of the federation to harness its resources for the benefits of the people.
However, of the two main sources of power generation plants operating in Nigeria: (1) Hydro-Electric and (2) Thermal or fossil fuel power plants. There have been two main types of fossil fuel/thermal power plants in the country: (i) Coal-fired and (ii) Natural gas-fired.
Out of about 22 power generating stations in Nigeria only 3 :(1) Kainji (2) Jebba and (3) Shiroro are Hydro-Power Stations while the remaining 19 are THERMAL STATIONS:
(1) Geregu 1 Kogi Sate: 159 MW capacity;(2) Alaoji NIPP, Abia:130 MW capacity;(3) Ihovbor NIPP,Edo Sate:279 MW;(4) Ughelli Delta State:515MW;(5)Sapele 1,Delta state:101MW;(6) Omotosho NIPP, Ondo:226MW;(7)A.E.S, Lagos State:50MW;(8) Asco, Kogi State:50MW;(9) Olorunsogo1,Ogun State:231MW;(10)Okpai,Delta Sate:452MW; (11) Omotosho 1,Ondo State:254;(12) Sapele NIPP, Delta State:166MW;(13) Geregu NIPP, Kogi: 213 MW;(14) Odukpani NIPP, Cross River:100MW;(15)Rivers IPP, Rivers State:50MW;Ibom,Akwa Ibom:529MW;(16) Olorunsogo NIPP,Ogun:194MW;(17) AFAM IV-V, Rivers State; (18) Egbin, Lagos state:1,006MW;and (19) Shiroro Niger Sate etc.
May God bless Nigeria!
Nurudeen writes from Kaduna, nurudeendauda24@gmail.com
