Commissioner Explains How Akwa Ibom  Spent Oil Derivation Arrears



Finance Commissioner in Akwa Ibom State, Mr. Linus Nkan has  said that the 13 per cent derivations arrears released to the state was used to build key infrastructure as monthly allocations from the Federation Account has not been enough to fund numerous projects embarked upon by government.
Nkan at a press conference yesterday, disclosed that Akwa Ibom State has since 2021, received seven tranches of the 13 per cent arrears paid to oil bearing states in Niger Delta region of the country.
According to Nkan, 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 has not been enough to fund numerous projects embarked upon by the Governor Udom Emmanuel administration.
He said, “In 2021, the sum of 160,000,000,000 Naira was remitted to the state account. In 2022, the projected income from this source was 41,434,000,000 Naira but as at Q3, the sum of 26,000,000,000 Naira 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 193,000,000,000; in 2022 the revised provision was  41,434,000,000; in the 2023 budget, the estimate for this line item is 100,000,000,000.
“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 FAAC, 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 are captured in the statutory Accountant General’s audited report for 2021 and 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 .
He said further, “We therefore urge the entire public to ignore the various figures bandied around on various media platforms, as those are nothing more than fiction.
“With the implementation of the International Public Sector Accounting System (IPSAS), it is impossible for any unaccounted expenditure to occur. It is also worthy to point out that the state’s budgets and annual reports must first be reviewed by the World Bank and it is practically impossible that financial infractions can skip their attention”.


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