Mulade Urges Tinubu, NASS to Enforce Direct Payment of 13% Oil Derivation to Host Communities

Renowned Niger Delta environmentalist and peace advocate, Chief (Comrade) Sheriff Mulade, Ph.D, has called on President Bola Ahmed Tinubu, the National Assembly, and the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC) to urgently restructure the 13% oil derivation policy to ensure that the funds are paid directly to oil-producing host communities rather than to state governments.

In a strongly worded statement issued in Warri, Mulade, who is also the Ibe-Sorimowei of Gbaramatu Kingdom, described the current payment arrangement as a misdirection of justice and development, accusing state governments of diverting and mismanaging funds meant to improve the lives of oil-bearing communities.

Mulade stated, “The 13 percent derivation is not ghost money — it has a source, and that source is the Niger Delta host communities where the oil is extracted from. Failure to pay the funds directly to these communities negates the principles of fairness, transparency, and the original intent of the derivation policy.”

Mulade decried what he described as decades of abuse and political manipulation of the derivation funds by successive state administrations, saying that despite trillions of naira received under the scheme, oil-producing areas remain impoverished, underdeveloped, and environmentally devastated.

“The state governments have consistently misappropriated or politically manipulated the 13% derivation funds. The oil-bearing areas still suffer from poor infrastructure, abandoned schools, polluted rivers, and communities cut off from the rest of the state.” He said.

The activist emphasized that the derivation principle was designed to compensate host communities for the environmental degradation and economic loss caused by oil exploration — not to serve as a political tool for governors.

Proposing a practical alternative, Mulade urged the Federal Government to restructure the payment mechanism by creating a consortium-led development model where funds are tied directly to visible infrastructure and human capital projects.

“The Federal Government should enter into consortium agreements on behalf of the host communities and pay 70% of the 13% derivation funds directly to construction companies to handle mega road and bridge projects linking the creeks to the uplands,” he proposed.

“The remaining 30% should go into human capital development through the Host Communities Development Trust (HCDT) as provided by the Petroleum Industry Act (PIA).”

Mulade argued that such an arrangement would guarantee transparency, ensure value for money, and deliver tangible development to the Niger Delta region.

“The current practice only empowers state governors to turn the derivation funds into a political conduit pipe — a reward system for political allies and personal enrichment,” he lamented.

Mulade paid tribute to Chief Dr. Wellington Okrika, the Bolowei of Gbaramatu Kingdom, whom he described as the father of the 13% derivation struggle, noting that it was through his advocacy that the policy was enshrined in Nigeria’s fiscal framework.

However, he expressed disappointment that the spirit of the derivation principle had been betrayed by successive administrations, as governors continue to “feed fat” on funds meant for the communities without recognition of Okrika’s sacrifice or any significant development in the creeks.

“This is not only immoral but also unconstitutional. The 13% derivation was created to directly benefit the people who suffer the consequences of oil exploration, not to finance political ambitions,” Mulade added.

Mulade called on President Tinubu, the National Assembly, and the RMAFC to initiate an immediate review of the 13% derivation payment framework, including a possible constitutional amendment or executive order mandating direct disbursement to host communities.

“If President Tinubu truly wants to correct injustices and promote equity in the Niger Delta, he must ensure that the 13% derivation reaches the people for whom it was created. This is the only way to rebuild trust, promote peace, and achieve sustainable development in the oil-producing areas.” Mulade said.