No Need for Deltans to Quarrel Over 13% Derivation

I did not wish to take part in the ongoing “palaver” as to how to disburse the “13% derivation” money payable to oil producing States from the Federation Account, but for the fact that I was once deeply involved in precisely the same type of “palaver” and my experience and views may assist in resolving the problem.

I was Senator in the Second Republic (1979-1983). It was I who, in Senate, moved the Amendment to the Revenue Allocation Bill of 1980 sent to the National Assembly by President Shagari which resulted in the payment for the first time of “derivation’ money from the Federation Account to oil producing States of the Federation. This was in 1980 at the Committee of the Whole House convened to consider clause by clause the provisions of the Bill. That amendment was not on the Order paper as it ought to have been, but I moved it all the same, such was my concern for the oil producing communities of the Federation. I had lobbied the UPN members of the National Assembly, at a combined meeting of
UPN Senators and Members of the House of Representatives. After my speech, adducing reasons why we from the oil producing communities should be allocated on the basis of derivation a percentage of the revenue in the Federation Account, my colleagues unanimously upheld my argument and agreed to support me in my quest to get a “fair treatment” for those of us from the oil producing communities.

“Fair treatment” for the oil producing communities was the theme of my address and subsequent motion in the Senate. I also had a word with the Senate Leader, Dr. Olusola Saraki, a good man, to enlist his support for my quest for “fair treatment” of the oil producing communities.

As I said earlier on, when the Order paper showing proposed amendments to the Bill came before the Committee, there was no mention therein of any amendment to the Bill to incorporate the principle of derivation in favour of the oil producing communities. I felt badly disappointed. Come what may, I decided to move and did move. There was a dead silence. I looked at Dr. Saraki the Senate Leader and then at Dr. Wayas, the Senate President. I can hear the voice of Dr. Wayas Senate President ringing in my ears as I write. Said he in a loud and clear voice: “Distinguished Senator Atake has moved that 1.5% of the Federation Account be paid to oil producing states. Those in favour say Aye. The response came equally loud and clear “Aye”. I had won the first battle to get a measure of fair treatment for the oil producing States and Local Government Councils.

As soon as the proceedings at the Committee were concluded we moved into the full sitting of the Senate. The Bill as amended was put to the Senate for approval or disapproval. By a voice vote the Bill as amended was approved by the Senate. I had won the second leg of the battle aforesaid, thanks to my colleagues in Senate. in particular to the good man Dr. Saraki and to Dr. Wayas.

Two things happened thereafter: Firstly, there were differences in the Bill as passed by the House of Representatives and the Senate. Both Houses in such a case must by the provision of the Constitution resolve the differences at a Committee called a Joint Finance Committee which must be composed of equal number of members from the two Houses. The Bill accordingly was sent to the Joint Finance Committee to resolve the differences.

Let me explain that also by the provision of the Constitution the proceedings and decision of the Joint Finance Committee (or of any other committee of the Senate or the House of Representatives) must be returned to both the Senate and the House of Representatives either sitting jointly or separately for deliberations and approval. No Committee of the National Assembly, not even a Committee of the Whole House, has the power to pass a Bill into law. That is the function and prerogative of the National Assembly. A Bill becomes law when it is passed by the National Assembly, that is to say, by both the Senate and the House of Representatives and assented to by the President of the Federation. If the President refuses or withholds assent then after a prescribed number of days the National Assembly can pass the Bill into law by the “yes”
vote of two-thirds of its members and the assent to the President will no longer be required.

President Shagari’s Revenue Allocation Bill of 1980 under discussion went to the Joint Finance Committee as said above. Unfortunately, I was not a member of the Committee and so could not at that Committee draw attention to a grave error on the part of that committee. I was particularly interested in that committee because of the 1.5% “derivation” principle in the Bill as passed by the Senate. I went to Warri for a few days to attend to some urgent family affairs. While there it came to my knowledge that the Joint Finance Committee had effected some amendments to the Bill, which of course they were entitled to do in their attempt to resolve the differences aforesaid. The thorny point however was that instead of returning the Bill to the National Assembly, that is to say to the Senate and the House of Representatives for ratification or otherwise there was a move to send the Bill straight from the Committee to President Shagari to be signed into law. That is the grave error which I mentioned above. It is unconstitutional to do so.

I immediately forwarded two letters by courier to the Senate President Dr. Wayas and to the Speaker of the House of Representatives. I pointed out in the letter that the amendments made by the Committee are at the very highest recommendations of the Committee and that the Constitution makes it clear that the Committee could not pass a Bill into law. I referred to the relevant section of the Constitution. I requested that they, the Senate President and Speaker of the House should cause the Bill as amended by the Committee to be returned to us at both Houses for deliberations and passing.

When I returned to Lagos, I gathered that President Shagari had signed the Bill into law and I was quite surprised. And when I got to Senate the next day the Bill as amended by the Committee was in my Senate letter Box. I read it and what struck me forcefully was Section 2 of the Bill which provided that the “derivation” money for which I had lobbied and fought so hard and which I had envisaged would be paid to the oil producing communities was to be paid into a “fund to be administered by the Federal Government for the development of the mineral producing areas of the states”. The implication was to me clear. President Shagari’s Federal Government wanted to appropriate the “Derivation” money to its custody and control and to disburse it as it pleased them instead of allowing the money to go to the State Governments and Local Government Councils as provided for in the Constitution. That no doubt as I saw it, was why the Bill was sent straight from the Joint Finance Committee to President Shagari to be signed into law. It was an attempt to prevent us in National Assembly from subjecting the Bill as amended by the Joint Finance Committee to further deliberations.

I immediately proceeded to the Federal High Court to seek a declaration that, that section of the Bill now called Allocation of Revenue (Federation Account) Act 1981 is unconstitutional, null and void having regard to the provisions of section 149(2)(3) of the Constitution. It is that section and subsections which make provision for how the “derivation money” should be distributed among the States. “Distributed among the States” were the clear wording of the Constitution. That is to say, the money should go straight to the States; not to a “Fund’ to be administered by the Federal Government. It is doing violence to the English Language and the provisions of the Law to say “distributed among the states” is the same thing as paid into a “Fund to be administered by the Federal Government for the benefit of the States”. And in any case we in the National Assembly passed no such law. That was only the recommendation of the Joint Finance Committee which did not come back to us at the National Assembly for us to say “Aye” or “Nay”.

In addition to the main suit, I also filed an application (Motion) asking the Court to restrain the President from operating the provisions of his Revenue Allocation Act 1981 pending the determination of the substantive suit. I filed an Affidavit of Urgency with my application (Motion). I made the President and the Attorney General of the Federation Defendants to the suit.
The Motion came up for hearing before the Chief Judge of the Federal High Court, the Honourable Justice Fred Anyaegbunam. The Attorney General, Chief Richard Akinjide SAN, appeared for the President and himself. My arguments before the Court as those reading this write up can guess was simply that Section 2 of President Shagari’s Revenue Allocation Act 1981 is inconsistent with section 149(2)(3) of the Constitution; and so the provisions of the Constitution should prevail.
Court, please restrain the President from operating the Act until the substantive suit is finally determined.

At the conclusion of arguments the court adjourned Ruling to a date I cannot remember now. But what I want to say is that between the day arguments were concluded and the day ruling was to be delivered, I saw on television President Shagari conferring on the trial Judge the National Honour of Officer of the Federal Republic of Nigeria. I smelt a rat. How could a defendant in a suit before a judge elect to confer an honour, National or otherwise, on the Judge during the pendency of the suit, particularly when a crucial ruling in the suit was pending. In my view it was simply not right. This President was at it again: first he attempted to appropriate States derivation money to his Federal Government. Now he is conferring honour on the Judge who was trying the validity of his conduct; why did the Judge accept this honour when the President was a party to a suit before him. It was all too suggestive. The timing was wrong, very wrong.

And so on the day of the ruling I told of the Judge to disqualify himself from further hearing of the case and to restrain himself from delivering his ruling on my motion. He refused to do so and proceeded to rule against me. I filed an appeal against his ruling. The first point I took, that is to say, my first ground of appeal was that there was a likelihood of bias against me in the suit because the Judge had received gratification in the form of a National Honour from the President who is the 1st Defendant in the Suit before him.

Now people have often asked me must not Judges be awarded National Honours. My answer has always been; they should but only as is done in the United Kingdom from which we borrow our judicial system. There in the U.K when a person AB is appointed a Judge of the High Court, he is honoured with a Knighthood. He is addressed Sir AB. It is automatic; not conferred on him when the U.K Government is a party to a suit before him. When Sir AB is elevated to the Court of Appeal he gets another honour. He is addressed Lord Justice AB. It is automatic. And when Lord Justice AB is further elevated to the highest court of the Land, the
House of Lords, he is further honoured with a peerage. He becomes a Peer of the Realm. He is addressed Lord AB. It is automatic. That is what we should do in this country. It removes Judges from the category of people suspected of lobbying and begging for National honours.
A Judge like Ceasar’s wife must be above suspicion. All High Court Judges should be honoured automatically with an OFR. All Appeal Court Judges should be honoured with a higher National Honour. And all Supreme Court Judges should be honoured with a much higher National honour. All honours to be automatic and to be from the date of appointment.

However, when next I appeared before the trial Judge he asked me to withdraw that ground of appeal within five minutes and apologise for filing it or else he would send me to prison for contempt of his court. He was looking at his wrist watch. I was surprised. He gave no reason for asking me to withdraw the ground. In the law of contempt of court he ought to. I was shocked. It is unprecedented for a judge to ask an appellant to withdraw a ground of appeal against his judgement, order or ruling. What was the court coming to; a Star Chamber, a Court in old England where for no justifiable reason people were just thrown into prison? I made up
my mind that I would not withdraw the ground of appeal. I chose to be sent to prison. At the expiration of five minutes by his wrist watch, the learned Judge said he committed me to prison for contempt of his court.
To underscore the point I am making about a Judge asking an Appellant to withdraw his ground of appeal against the Judges’s judgement, order or ruling let me narrate an incident that took place at the Supreme Court when I eventually appealed my committal for contempt by the learned Judge. The Judges of the Supreme Court were very hostile to me. One was shouting at me “justify the ground, justify the ground while I was addressing the Court on the proper procedure for committal for contempt in the face of the court. You would have thought he was the Appellant and that I had no right to argue my appeal the way I thought fit as long as I was within the Rules of Court. But I obliged him.

One of the judges however had the calm of mind to ask me two relevant questions. “Atake” he said, “look at page ‘A’ of the copy of proceedings”. I did. You are recorded as having withdrawn a Statement credited to you therein”. I said “yes, my Lord”. Why did you do that”? “Because the judge asked me to withdraw it”, I answered. “Now turn to page “X” I did. “The Judge asked you to withdraw the ground of appeal. Why did you not?” “I and answered very firmly, “My Lord, that is my ground of appeal against the judge’s ruling. I submit that it is not permissible for a Judge to ask an Appellant to withdraw his ground of appeal against a Judge’s ruling”.
On hearing this the Supreme Court Judges looked at one another. They rose and retired from the Court. I wondered what was happening. When they returned they began to apologise for being hostile to me. It then dawned on me that they appreciated and approved of my reason for refusing to withdraw my ground of appeal. They must have thought initially that I just wanted to defy the judge. Far be that from me.
However, believe it or not I walked “tall” from the Judges court to the Black Maria to be taken to prison. I asked the police officers to open the door of the Black Maria for me to get into it. They refused. I told them I had been committed to prison for contempt of court. One of them said “Oga we know. Una be big people. Inside the Black Maria he hot well well. We no de go now. Go sit down for registry. When we want to go we go come tell you. If you go inside the Black Maria now and the heat kill you, na we small people dem go hold”. That is the pidgin English for “it is hot in the Black Maria. Go sit in the registry. If you sit in the Black Maria now and you get suffocated it is we the “small men” who would be held accountable. We will come for you when we are ready to move”.
In the event that happened however, he did not have to come for me; because when the judge rose he sent for me in his Chambers. I went. In there I met two members of the bar. I did not know what took place before I got into the chambers. I later understood however that the
two lawyers had intervened in the matter and the Judge had decided to give me more time to consider whether or not I would withdraw the ground of appeal and apologise. That his view was that I had accused him in the ground of appeal of receiving a bribe in the form of a National honour. Why he did not tell me that in court, to get my explanation, I do not know. The law of Contempt of Court demands that he should have told me of his grievance and get my explanations before proceeding to commit me. That is the law as I know it.

In any case I was released on bail in my own recognisance and I went to my official residence at 1004, Victoria Island, Lagos. This was on a Friday afternoon. The newspaper reported the next day that I had been sent to prison. The telephone in my residence buzzed virtually every twenty minutes. There were calls from my erstwhile colleagues on the Bench and from members of the Bar who knew me on the magisterial Bench in Lagos. I assured them all that I would apologise to the Judge the following Monday. The judge had shown respect for me by retreating from his stance of “five minutes or else” to “four days or else” and having regard to the respect due to the Judge on the Seat of Justice and in particular to the respect due to the institution called “The Judiciary” and I being a former Judge it was only decent to apologise to the Judge no matter what I thought of him. He deserved reciprocal respect from me. I must not appear uncompromisingly defiant. I had made my point.

However the substantive suit filed by me was never heard by the Judge, because when I naturally reported the incident to the Elders of the UPN (Unity Party of Nigeria) in the then Bendel State and told them my views on Presidént Shagari’s Revenue Allocation Act 1981 and in particular that we in the National Assembly did not pass any such Act, the Bendel State Government decided to file a suit at the Supreme Court in its original jurisdiction challenging the validity of Section 2(2) of the Act. Indeed Bendel State challenged the entire Act. It was therefore decided that my suit before the Federal High be adjourned to abide the decision of the Supreme Court. That is to say, if the Bendel State won its case, I should be adjudged a winner in the Federal High Court. If the Bendel State lost in the Supreme Court I too would be pronounced a loser in the Federal
High Court.

Eventually the Supreme Court gave judgement and declared President Shagari’s Revenue Allocation Act 1981 illegal, unconstitutional, void and of no effect; for the simple reason that the proceedings and decisions of the Joint Finance Committee should have been returned to us at the National Assembly and not sent straight to President Shagari to be signed into law. Dr. Wayas and Chief Ezoke Senate, President of the Senate and
Speaker of the House of Representatives respectively should have heeded my advice and have the proceedings before the Joint Finance Committee returned to us at the National Assembly.

Entered Governor Ambrose Ali. That was the next thing that happened.
One day Governor Ambrose Alli invited us Senators and Members of the House of Representatives from Bendel State to dinner at Bendel House, Victoria Island, Lagos. It was a sumptuous dinner and we all had a pleasant evening; that was before Governor Alli told us what no doubt was was his real aim for inviting us to dinner. He said in short that he would appreciate it if we would allow the derivation money to be disbursed by the State. Again poor blunt Atake had to come in. I asked him how he intended to disburse the money. He replied that he would later tell us how. I told him he was putting the cart before the horse. He must first tell us how he would disburse the fund before we consider his request. That of course led to the “palaver” between Governor Alli and me. I reported him to the Elders of the UPN in Bendel State. I was later told that Governor Alli would found a University in Bendel State and would establish a campus of the University in Warri.

Governor Alli did found and establish a University in his home town Ekpoma. But up to now I have not seen a campus of the University in Warri. Neither am I aware of any project that he executed in the riverine area of the State with the “derivation money”. And it is the riverine area that produces the bulk of the oil for which the derivation money was allocated to the State and Local government councils.

The last thing that happened was that at the end of my tenure in Senate (1979 to July 1983) the Unity Part of Nigeria Elders invited me to run for a second term. I refused. I held them to the assurance they gave me that I would be in Senate for only one term. I had no political ambition. I was pressed to run for the Senate. I was not happy in there. Fellow Senators who promised to support me in my quest to have a percentage of the Federation Account allocated to the oil producing communities deserted me on the floor of the Senate. I was put up by the Unity Party of Nigeria (UPN) Elders to contest against Dr. Joe Wayas, for the Presidency of the Senate. I gathered that one or two of my fellow UPN Senators voted against me after they had assured the Party they would vote for me. l could not understand the way of politicians and wanted to resign from the Senate. But UPN Elders would not hear of that, “Stay on, it is only for four years”, they said. I stayed on. After four years I was happy to be out of Senate.

Indeed I would have thought I had wasted four years of my life in Senate but for the little measure of fairness I was able to get for the oil producing states by way of “derivation”. President Shagari’s Revenue Allocation Act 1981 having been declared unconstitutional and of no effect, he proceeded to give a lower percentage of the Federation Account to the oil producing states on the basis of derivation. That percentage was later increased to 1.5% as moved by me in Senate. I was pleased.
Now we have 13% derivation. As I told Military Head of State, General Abubarkar, it is a “big jump” from 1.5% to 13%. We hope to have a higher figure. That should be our next focus on this derivation matter; Not an internecine “palaver” over its disbursement.
The first lesson I think we should learn from my account above is the necessity to keep within the provisions of the Constitution on this derivation and indeed on all other matters. The second lesson is the necessity for State Governors to be absolutely impartial in their duty to the people and the Local Councils on this derivation matter and
indeed on all affairs of the State.

The Constitutional provisions on this Derivation matter as far as it concerns States and Local Government Councils, are in Section 162 Subsections 1 to 8 of the 1999 Constitution. Subsections 1 and 2 enjoin the Federal Government to maintain a Special Account called the Federation Account. Into this Account, the Federal Government must pay all revenues collected by it except proceeds of the income tax of the Army, The Police, The Ministry of Foreign Affair and residents of the Federal Capital Territory. From this Account the Federal Government must allocate funds to the other two tiers of Government namely the State Government and the Local Government Councils on a formula prescribed by the National Assembly. In determining that formula the National Assembly must take into account certain allocation principles viz: population, equality of States, internal revenue generation etc. There is a proviso to Subsection 2 of Section 162. It is that proviso which enjoins the National Assembly to take into consideration the principle of “derivation” while prescribing the formula for distribution of the money in the Federation Account. The Constitution fixes the derivation figure at not less than 13% of the total revenue accruing to the Federation Account
directly from any natural resources; in this case oil revenue. If therefore, the revenue accruing to the Federation Account from oil in Delta State is
=N=100.00, the Federal Government must set aside =N=13.00 to be allocated to the State in addition to its normal allocation. The Federal Government will carry out the same exercise in respect of all oil producing States. The result is that every oil producing state knows how much money is due to it from the Federation Account on the basis of oil revenue it contributes to the Federation Account. It has been worked out and
certified by the Auditor General of the Federation pursuant to section 168(1) of the Constitution. The total amount due to all the oil producing States on the principle of derivation is then deducted from the Federation Account. The balance of the money in the Federation
Account is by Subsection 3 then distributed among the Federal Government, State and the Local Government Councils in each state these being the three TIERS of Government in the Federation. I have written tiers in capital letter for a purpose which I will discuss later. Each
State now has a lump sum and so do the Local Governments in each state.

So far we have dealt with section 162, subsection 1 to 3. We shall now proceed to subsection 4.

Subsection 4. The lump sum due to States by subsection 3 is then distributed among the States. The money due to each oil producing state on the basis of derivation as stated above is then added on to the share of each oil producing State. This is the advantage oil producing States have over non-oil producing States. One sees therefore that oil producing States have allocated to them two types of money from the Federation Account namely: (i) Money allocated on the basis of the principles of allocation in subsection 2, namely, population, equality of States, internal generation of revenue, land mass etc. All the States in the Federation are entitled to a share of the money in the Federation Account on that basis.
(ii) Money allocated on the basis of “derivation from oil revenue”. Only oil producing States are entitled to a share on that basis.

Subsection 5. The lump sum due to the Local Government Councils in each State by reason of subsection 3 (three) above is allocated to the State concerned. That is to say, that the amount due to all the Local Government Councils in Delta State is allocated to the State for the benefit of the Local Government Councils. Delta State then becomes a Trustee of the money due to its Local Government Councils from the Federation Account. That money does NOT belong to the State. It belongs to the Local Government Councils.

If one looks at section 313 of the Constitution one sees that Revenue is
allocated between:

(a) The Federal Government and the States
(b) Among the States
(c) Between the States and Local Government Councils and lastly:
(d) Among – Local Government Councils.
It appears therefore that the Local Government Councils must look to the States for the derivation money. This view appears to be reinforced by sub-section 6. Subsection 6. Each State must maintain a special account called the “State Joint Local Government Account”. Into this Account the State must pay all allocations due to all the Local Government Councils from:

(1) The Federation Account and (2) The Government of the State itself.
One sees therefore that in keeping with its making State Governments Trustees of the money due to Local Government Councils from the Federation Account the Constitution directs State Government to maintain a “Special Account”, (the Joint Local Government Account) into which the State Government must pay two sets of money namely:

(i) Money due to Local Government Councils from the Federation Account
(ii) Money from the State Government itself. That is to say, the amount added to the normal allocation due to the State by reason of Subsections 4 and 5 of section 162.
That is the money due to Local Government Councils on the basis of derivation. To be precise, Delta State must maintain “The State Joint Local Government Account” into which it must pay the two sets of money above mentioned. What appears to be the scheme of the Constitution therefore is that money due to Local Government Council from the Federation Account on the basis of derivation must be paid to the Councils by the State Governments. This view has reinforcement in subsection 7 which again enjoins each State to pay to Local Government Councils in its area of jurisdiction a proportion of its total revenue. The money to be paid to Local Government Councils by reason of that subsection is from the States normal revenue as distinct from payment to Local Government Councils in sub-section 6 which is payment of the Derivation Fund in the States custody.
In subsection 6, the Constitution says the State Government must pay ALL ALLOCATIONS to the Local Government Councils of the State into a SPECIAL ACCOUNT, (Joint Local Government Account). Subsection 7 says the State Government must pay Local Government Councils in its area of
jurisdiction a proportion of its total revenue in a manner prescribed by the National Assembly.

Now the Constitution has used two different. words in dealing with the Revenue Allocation matter namely; (i) Allocate and (ii) pay. You will be surprised what heavy weather lawyers will make of these two words while construing section 162(1-8) of the Constitution. The Constitution has used a third word “Distribute”(see Subsection 3 and 4).
When the Constitution wants money from the Federation’ Account to be shared:
(a) among the Federal Government, the State Government Local Government Councils
(b) among the State Governments and
(c) among Local Government Councils, it uses the word “Distribute”.
When the Constitution wants the share of Local Government Councils to be given in trust to the State Governments it uses the word “Allocate” (see Subsection 5).
When the Constitution directs how the money due to Local Government 19 Councils in the custody of State Government should be kept it uses the word “pay”. The State Government must pay Local Government Council money in its care into a State Joint Local Government Account.
Subsection 7 I repeat says each State Government must pay to Local Government Councils in its area of jurisdiction a proportion of its total revenue. Now it is clear to my mind that Local Government Councils money in the custody of State Governments is not part of
the Revenue of State Governments. It is a “Trust Fund”. The States are Trustees of the Fund. The Fund belongs to the Local Government Councils. That Trust Fund is made up of (i) Money normally due to Local Government Councils under subsection (2) of Section 162 and (i) money due to the Councils on the basis of Derivation under the proviso to subsection 2.
That is where subsection 8 comes in. The amount standing to the credit of Local Government Councils in each State shall be Distributed among the Local Government Councils in the State in the manner prescribed by the State House of Assembly and NOT by Governor of the State. The Governor is the Chief Executive of the State. He knows or ought to know the amount due to the Local Government Councils of his State on the basis of derivation. He has got or can get the figure from the Auditor General. It is the Governor who should put a proposal to the State House of Assembly on how to distribute the Fund among the Local Government Councils in his state. It is he to tell the House of Assembly the proportion of the Fund which is got on the principle of Derivation. That proportion of the State Joint Local Government Council goes exclusively to oil producing Local Government Councils. It is true that Subsection 8 of Section 162 has not said so expressly. It only says that the Fund to the credit of Local Government Councils should be distributed among the Councils. But there is that proviso to subsection 2 which speaks of 13% derivation. That proviso must be seen to run throughout the scheme of distribution of the Fund in the Federation Account at all levels.

You no doubt remember the election petition between Chief Awolowo and Alhaji Shagari in 1979. That was when this country came face to face with what lawyers call the literal, rule of interpretation of statues. It means simply that we should interpret laws and documents sticking to the words used in the law or documents when there is no ambiguity. That was why- the Supreme in Count said there is a Reaction of a State. I was in court when the judgment was delivered. I was agitated. Could there be 2/3 of a State? The Supreme Court said there could be; not territorially but in respect of the votes cast in the State.
That is where in a reverse position we stand on the distribution among Local Government Councils. Subsection 8 speaks simply of distribution among Local Government Councils. Literally construed no Local Government Council should be excluded. But there is at least an exception to the literal rule of interpretation. When from the frame work of the relevant law (legislation) the true interpretation of that law can be achieved other than by relying on the literal interpretation one is permitted to move out of the region of the literal rule of interpretation.
In this regard the whole of the frame work of section 162 and its various sub-sections must be looked at in order to arrive at the true intention of the Constitution in subsection 8. As I said the proviso to subsection 2 of Section 162 is the guiding light. It controls the distribution of Fund from the Federation Account.

State Governments which do not produce oil are not entitled to a share in the Derivation Fund. Similarly, Local Government Councils which do not produce oil are not entitled to a share in the derivation Fund. That is the true intention of the Constitution in subsection 8 read together with the provision of subsection 2. And that is where the communities in the oil producing Local Government Councils come in. It is they who inhabit these Council areas. It is they who suffer from the exploration and exploitation of oil and gas in their God given land. When I was moving for 1.5% derivation in 1980 it is the communities of Itsekiris, Isokos and Ijaws I had in mind even though other oil producing communities in the Rivers and Cross River States would benefit. It was – the Itsekiris, Isokos and Ijaws who voted me into Senate. Derivation Fund in Delta State is their Fund.

The Fund is not meant for any individual. The Governor of the State should in participation with the beneficiaries of the Fund lay out a plan for the development of the Local Government areas concerned. These Local Government areas are mostly in the riverine parts of the State. Those areas or parts do not lend themselves easily to schemes of developments on account of their terrain. There will be bridges to be constructed; water and Electricity to be supplied; Hospitals and schools to be built; Towns and villages destroyed by restive youths to be rebuilt. etc. There are a lot of things to be done. Fortunately, NNDC will also come to the aid of the oil producing Local Government Council areas. The fact that they have 13% derivation does not preclude them from enjoying the benefits of NNDC or from enjoying development schemes from the State’s own revenue.
The point I am out to make however is that the Derivation fund is the money of the oil producing Local Government Councils and their inhabitants or communities. It is not the Fund of the State Government. The State Government has its own revenue allocated to it on the basis of population, equality of State, internal generation of Revenue, land mass, terrain and population density and possibly from grants by the Federal Government under section 164(1) of the Constitution.
State Governments tend to treat Local Government Councils as if they State Civil Service or parastatals thereof. That is wrong. Local Government Councils are a distinct TIER of Government. Let their Derivation Fund go to them according to the quantum of production
for their development. That is the logic of the Derivation principle. No need to quarrel.

The last thing I wish to say is that State Governors have said the Derivation Fund paid so far is from January 2000. That it ought to be from May 1999. I share their view. If the Federal Government has not paid the sum due to States from May 1999 to December 1999. I will say that is the problem and headache of the Federal Government. The amount is due and is a charge on the Consolidated Fund of the Federation by reason of Section 167 of the Constitution. The Federal Government should pay from that Fund the amount due to the State from May to December 1999.

Justice F. O. M. Atake is a Retired Judge of the High Court of Mid-Western Nigeria and was a Senator in the 2nd Republic (1979-83).