NIGERIA: DECLINE IN DERIVATION FORMULA 1953-1999 

 It is important to note that between 1953 and 1959, under the British Colonial Government, oil revenue allocation was 100% to the region from which it was derived; but it was understandably reduced to 50% at independence, 1960-67. There was a further minor cut to 45% in 1967-75 during General Yakubu Gowon’s regime.

 General Murtala/Obasanjo in 1976-79 precipitated a drastic decline to 20%. Alhaji Shehu Shagari, in 1979-83, instituted more far-reaching reduction to the derivation formula to a mere 2%. General Muhammadu Buhari in 1984-85, perhaps, relying on North’s spurious contention that by virtue of its funding of oil exploration in Nigeria and its right of ownership of 72% of Nigeria’s land mass which entitles it to the entire continental shelf of Nigeria, thus giving the North right to Nigeria’s oil (on-shore and off-shore), cut derivation to its lowest ever, 1.5%. General Ibrahim Babangida (1985-1999) appeared to have harkened to Niger Delta agitations and “generously” doubled Buhari’s 1.5% to 3%. Generals Sanni Abacha/Abdulsalami Abubakar provided for a minimum of 13% in the 1999 Constitution; and General Obasanjo in his second coming in 1999, implimented that minimum and no more.¹¹    

It does appear that as soon as the uncivil war was over, Niger Delta got “rewarded” for their loyalty to the Federal government with frequent downward review of the derivation formula.