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Derivation Arrears: Policy Alert Insists Akwa Ibom Received N184.05 billion  Payments in 2021

Derivation Arrears: Policy Alert Insists Akwa Ibom Received N184.05 billion  Payments in 2021

…Says State Government Must Come Clean

By Ekemini Simon

Following recent denial by the Akwa Ibom State Governor, Mr. Udom Emmanuel that the State government did not receive refunds on the 13 percent derivation arrears, Policy Alert, a Civil Society Organisation promoting fiscal and ecological justice in the Niger Delta, has insisted that Akwa Ibom State received the payments in 2021.

The organisation has called on the Akwa Ibom State Government to provide details on where the state government got N171.2 billion and N12.18 billion it received as exceptional income during the third quarter and fourth quarter of 2021.

It could be recalled that Governor Udom Emmanuel during the weekend while responding to questions during the media interaction “The Governor Speaks”, had said, “From 2018, there has not been any further refund from the Federal Government. I don’t know if people are counting the court judgment on the 13 percent derivation arrears which has not yet been implemented. Even then, people need to ask how much we were earning as 13 percent derivation as of then. When the issue was brought to the Federal Executive Council, they said they will pay it in five years.”

Policy Alert on November 1, 2021, had issued a statement that the Akwa Ibom State Government had received N171.2 billion as thirteen percent derivation arrears during the third quarter of the year, linking the payment to a series of court judgments in favour of four Niger Delta states on arrears of derivation payments from Production Sharing Contracts. Weeks later, the organisation also called on the benefiting states to resist the temptation of using the refund judgment as a guarantee for commercial bank loans.

In a statement issued by the organisation on Monday, February 14, 2022, the Executive Director of Policy Alert, Tijah Bolton-Akpan, said the denial by the governor is surprising as financial documents published by the state government confirmed the payments as stated.  

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Bolton-Akpan said, “We stand by our earlier position that the state government had received such payments as 13 percent derivation. This was confirmed in the 2021 third-quarter budget appraisal report published by the Akwa Ibom State Government which clearly indicates that the state received N171.2 billion under ‘Other exceptional income: 13 percent derivation revenue arrears’. We also use this opportunity to inform the public that in the fourth-quarter, the state received a further N12.81 billion refund as derivation arrears, bringing exceptional income received under this heading in 2021 to a total of N184.05 billion.

“It was apparently in expectation of these payments that the state revised its expected revenue on this budget item from N61.10 billion to N193 billion in September 2021.”

He added, “It is therefore not just curious but potentially misleading to publicly deny that the state has received these funds despite documentary evidence to the contrary. This is indeed a red flag and suggests that something is amiss. Fiscal openness goes beyond publishing what we spend public funds on. We must also be transparent and accountable on the sources of these funds. It is expedient for the State Government to come clean on the true source of the N184.05 billion exceptional income in 2021 if it is not derivation refunds as captured in the state’s fiscal documents.”

He called on accountability institutions especially the Office of the Auditor-General and the State House of Assembly to further investigate the issue.

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