"Stop The Payment Of 13% Derivation Through Governors" - HOSCO Tells Buhari

NATIONAL leadership of Host Communities of Nigeria, HOSCON, has told President Muhammadu Buhari to stop perceived illegal and unconstitutional payment of 13 percent derivation fund through state governors who are third line charge on the Federation Account and pay same directly to the host communities through the proposed Presidential Derivation Committee, PDC and State Implementation Committees, SIC.

National Director of Media and Publicity of HOSCON, Chief Monday Whiskey in a statement said: 

“It is illegal and unconstitutional for governors of the South South states and their state Assemblies to legislate on oil/gas 13 percent derivation fund which is first line charge on the Federation Account.

Whiskey in the statement said: 

“The Prince Mike Emuh and the entire leadership of HOSCON are happy that governors of the South South have confirmed that 13 percent derivation fund is a first line charge on the Federation Account as contained in their recent press statement.

“This is very pleasant to the oil/gas producing communities. Of a truth, 13 percent derivation fund is the only first line charge on the Federation Account. The Federal Government is second line charge, the state government is third line charge while the local government is fourth line charge.

“This is the position of the law as confirmed by the revenue formula.

Therefore, it is illegal and unconstitutional to pay the 13 percent derivation fund which is first line charge through state governors third line charge on the Federation Account. Section 162(2) of the 1999 constitution as amended ‘provided that the principle of derivation shall be constantly reflected in any approved formula as not being less than 13 percent of the revenue accruing to the Federation Account directly from any natural resources”

“These position of the constitution made it very clear that 13 percent derivation fund is provided for constitutionally and exclusively for the oil/gas producing communities primarily as compensation for lost of fishing rights and productive farmlands as a result of oil/gas exploration and production activities.