Delta State Government has revealed that the federal government has approved payments of N240 billion as crude oil derivation arrears since 2004, citing that it has received tranche payments of over N14 billion so far.
This was disclosed in a statement by Delta State commissioner for finance, Chief Fidelis Tilije, on Monday.
He added that the state’s total debt profile currently stood at N272 billion as Niger Delta states, led by Rivers State, revealed they are using derivation arrears to boost infrastructure.
Tilije noted that the N240 billion refund from the Federation Accounts Allocation Committee (FAAC), was not a loan but the state’s share of 13 percent crude oil derivation arrears from 2004 till date.
- He said, “The total debt profile of Delta State as we speak is N272 billion. Out of this, N84 billion is due to contractors, and pension arrears are about N27 billion.
- “The rest are the debt profile, most of that was actually inherited by the Ifeanyi Okowa-led administration.
- “And in these past months, we have a total expected refund of N240 billion with respect to the 13 percent oil derivation refund to nine states that is ongoing.
- “We had initially wanted to phase out many legacy projects that we wanted to complete, we approached the State House of Assembly and got approval to discount N150 billion, which we pruned to N100 billion as a bridging finance facility from the N240 billion.
- ”I did say recently that out of this N240 billion that is expected from FAAC receipts, Delta has received N14.7 billion in three quarterly installments.”
He added that out of the N100 billion bridging finance, Delta State has accessed N30 billion from the commercial market.
He also noted that if the state government had totally taken or fully discounted the N240 billion FAAC refund, the next successive government will fall back to the experience Gov. Okowa had in 2015.
“So, unlike the other oil-producing states that fully discounted their refunds, Okowa decided to be his brother’s keeper, take a percentage of the N240 billion and leave the rest for the incoming government to access over a period of four years.
- “Besides, if we had gone ahead to discount the N240 billion in full, we would have been able to clean up all our outstanding debt,” he added.
For the record: Recall Nairametrics reported last week that the governor of Rivers State, Nyesom Wike disclosed how he managed to finance the numerous projects in the state currently being commissioned by several political leaders across party lines.
He said the projects were financed with accumulated 13% derivation funds, which Rivers and other Niger Delta states were owed since 1999. The funds were recently released by the presidency.