13% derivation arrears: Funds were subsumed under budgets – A’Ibom Finance Commissioner

Akpan Umoh, Uyo

The Akwa Ibom State Commissioner for Finance, Mr Linus Nkan, has explained how it spent the 13 per cent oil derivation refunds made by the Federal Government to oil-producing states.

Nkan in a press conference on Monday disclosed that the state has since 2021 received seven tranches of the 13 per cent arrears.

According to him, the refunds were subsumed into the state’s annual budgets which have been used for key capital projects as the monthly allocations from the Federation Account have not been enough to fund numerous projects embarked upon by the present administration.

“In 2021, the sum of N160 billion was remitted to the state account. In 2022, the projected income from this source was N41.43 billion but as of Q3, the sum of N26 billion has been received.

“In line with proper financial records keeping and public finance transparency, the refund was reflected in the 2021 budget.

“As other Exceptional income: 13% derivation revenue arrears, which was revised to the tune of N193 billion in 2022 the revised provision was N41.43 billion in the 2023 budget, the estimate for this line item is N100 billion 

“A simple calculation of these figures will reveal the sustainability thinking disposition that guides the governance of our state.

“The agitation for the refund of the arrears which were deducted from the earnings due to the oil-bearing states was undertaken by the affected Governors, directly and through their officers at the Federation Accounts Allocation Committee which agreed with the very detailed submission and calculated the sums accruing to the states.

“However, due to the large amount involved and the inability of the Federal Government to pay all at once, it was agreed that the payments be made in tranches quarterly, over a period of five years.

“The report of judicious application of this income and other incomes to the state is captured in the statutory Accountant General’s audited report for 2021 and the same will be reflected this year. 

“There is, therefore, no reasonable cause for the activation of alarmist tendencies on the state of finances of the state, because the Governor is conscious of the judgement of history and posterity and is doing everything to earn a copious mention on its golden pages,” Nkan said.

Nkan urged the entire public to ignore the various figures bandied around on various media platforms, as those are nothing more than fiction. He added that with the implementation of the International Public Sector Accounting System (IPSAS), it was impossible for any unaccounted expenditure to occur.