Market News

Edo, Anambra, Abia and Ondo also posted declines, with Ondo cutting the sharpest proportionally, from N74.03bn to just N11.76bn. Rivers State, however, bucked the trend as the only oil-producing state to record an increase in domestic debt.

Its obligations rose from N225.51bn in June 2023 to N364.39bn by March 2025, an expansion of more than 60 per cent. The state’s rising debt profile contrasts with the broader pattern among its peers, even as it remained one of the top recipients of derivation allocations in the period.

Debt repayment

The revenue picture from the states’ budget implementation reports also highlights the weight of debt repayments on oil-producing states within the same period. Available records show that the nine oil states generated a combined N1.39tn as Internally Generated Revenue between the third quarter of 2023 and the first half of 2025.

When set against the N610.84bn in domestic debt repayments recorded between June 2023 and March 2025, it means that close to 44 per cent of the internally generated revenue of these states was effectively absorbed by loan repayments within that period.

The proportion shows how much of the states’ own earnings were channelled into reducing debt rather than financing new projects. The PUNCH observed that the percentage could be even higher once the Debt Management Office releases figures for the second quarter of 2025.

A closer look at the IGR numbers shows that Rivers State reported the highest inflows at N507.23bn, followed by Delta with N250.36bn, Akwa Ibom with N134.81bn, Edo with N132.51bn, and Bayelsa with N101.85bn. At the lower end, Ondo generated N68.83bn, Abia N69.87bn, Imo N47.51bn, and Anambra N73.04bn.

However, the reported totals do not capture the full picture. Bayelsa and Edo had no figures published for Q3 2023, while Rivers and Anambra had yet to release their IGR reports for the first half of 2025. The absence of these data points means that the actual combined IGR of the oil-producing states is higher than the N1.39tn currently available, which in turn implies that the share of revenue consumed by debt repayments may be lower than the present estimate of 44 per cent.

Even with the gaps, the figures highlight a structural challenge. While derivation allocations delivered record inflows to these states, their own revenue mobilisation remains weak compared with their fiscal needs. For smaller producers such as Abia, Imo, and Ondo, the size of their debt repayments relative to their reported IGR shows how dependent they remain on federally shared oil income rather than their own tax base.

N1.67tn derivation revenue

Findings by The PUNCH showed that oil-producing states in Nigeria received a total of N1.67tn as 13 per cent derivation allocation within a two-year period covering July 2023 to June 2025. This is according to data released by the National Bureau of Statistics based on Federation Account Allocation Committee disbursement reports.

The figures reveal a sharp rise in allocations over the period, with the first half of 2025 alone accounting for more than 40 per cent of the entire sum.

The derivation principle guarantees that 13 per cent of oil revenue earned from natural resources produced in a state is set aside for that state.

For decades, it has been both a fiscal lifeline and a source of contention in the politics of resource control. The figures provide a striking snapshot of how much the oil states earned in the first two years of President Bola Tinubu’s administration, and they raise questions about what use has been made of the windfall.

The PUNCH observed that in the second half of 2023, the nine oil-producing states collectively earned N257.85bn. Delta State received the highest allocation of N85.23bn, followed by Akwa Ibom with N51.60bn, Bayelsa with N47.32bn, and Rivers with N47.23bn.

Together, these four accounted for more than 90 per cent of the total, while the smaller producers — Edo, Ondo, Imo, Anambra and Abia — took home relatively modest amounts. Abia, for example, received just N1.78bn across six months, while Anambra earned N2.49bn, underscoring the imbalance of production and revenue within the federation.

By the first half of 2024, allocations had increased significantly to N342.56bn, representing a 33 per cent jump compared with the preceding six months. Delta again topped the list, securing N113.78bn. Akwa Ibom collected N70.01bn, Bayelsa N64.04bn, and Rivers N58.78bn.

The smaller states, though still far behind, also recorded growth. Edo received N11.90bn, Ondo N10.05bn, Imo N5.72bn, Anambra N4.13bn, and Abia N3.19bn. The second half of 2024 pushed the total even higher to N379.05bn. This increase was largely driven by a surge in December, when disbursements peaked at N121.85bn, the highest monthly figure recorded up to that point.

Delta took the largest share at N119.19bn, while Bayelsa, Rivers, and Akwa Ibom each received above N70bn. Edo collected N11.14bn, Ondo N10.04bn, Imo N7.84bn, Anambra N5.93bn, and Abia N4.01bn. The highest surge came in the first half of 2025. In just six months, the oil-producing states collectively received N688.03bn, nearly double the entire allocation of the previous half year.

Delta State alone earned N202.07bn, eclipsing what it had received in the whole of 2023.

Related News

•  Nestlé empowers 2600 food vendors across 11 states
•  Your potbelly won’t fit in firefighting gear, FFS warns recruits
•  Nkechi Blessing escapes injury as ceiling collapses in Lekki home

Bayelsa followed with N146.32bn, Akwa Ibom with N136.26bn, and Rivers with N130.97bn. For the smaller producers, it was also their strongest showing yet. Edo collected N21.53bn, Ondo N16.97bn, Imo N15.18bn, Anambra N9.18bn, and Abia N9.55bn.

Looking across the two years, the concentration of wealth in the top four states is unmistakable. Delta received a total of N520.27bn, Bayelsa N332.05bn, Akwa Ibom N330.27bn, and Rivers N309.77bn. Together, these three biggest earners — Delta, Bayelsa, and Akwa Ibom — accounted for roughly 71 per cent of the N1.67tn shared.

Rivers pushed the collective share of the top four to about 90 per cent, leaving the remaining five states with just N140bn between them. Edo received N54.47bn over the two years, Ondo N45.50bn, Imo N31.88bn, Anambra N21.74bn, and Abia N18.52bn.

While the increased inflows have given state governments more fiscal room, the question of utilisation remains unresolved. Analysts argue that despite record allocations, many of the oil-producing states continue to face severe infrastructure gaps, high poverty rates, and environmental degradation.

The Niger Delta, the source of the wealth, is still plagued by underdevelopment, with residents often complaining that oil funds vanish into recurrent expenditure or patronage networks instead of being channelled into visible projects.

Critics question spending

Publicity Secretary of the Edo State chapter of the Peoples Democratic Party, Chris Nehikhare, criticised the state government, saying that there has been little or no improvement despite a rise in internally generated revenue and derivation funds.

Nehikhare said Edo received billions in derivation allocations between January and June and in IGR, yet residents have seen no tangible improvement in infrastructure, social services, or economic opportunities. He alleged that civil servants and teachers in the state were now experiencing delays in the payment of salaries, while the reported growth in IGR had not translated into any visible development.

According to him, hardship, unemployment, and infrastructural decay persist across the state. “Edo people are yet to see any tangible improvement in infrastructure, social services, or economic opportunities.

“The state civil servants and teachers now experience a delay in salary payments. The so-called IGR growth is questionable, as it has obviously not translated into visible development or relief for our citizens. Instead, hardship, unemployment, and decay persist, proving that the government’s revenue claims are more about propaganda than performance,” he said.

The Delta State Government earlier confirmed that it receives the 13 per cent derivation fund on a monthly basis from the Federation Account Allocation Committee. The State Commissioner for Finance, Chief Fidelis Tilije, told The PUNCH that the fund is remitted monthly into the state’s account.

Tilije said the inflows had strengthened the state’s finances, noting that the government had not taken any new loans since May 2023. “Rather, we have been reducing what was owed before. In terms of contractors’ payment, we are doing very well. We are not owing any contractor as I speak. Our IGR has also gone up,” he added.

But the commissioner’s remarks drew criticism from the Chairman of the Delta Obidient Elders Forum, Mr Chris Biose, who accused the Governor Sheriff Oborevwori-led administration of lacking transparency.

“Let me tell you the truth, this government lacks transparency. Citizens have been kept in the dark; there is no accountability. They should tell us how much they have received from the 13 per cent derivation and IGR, and how it is being spent. The money belongs to the people of Delta State, not Sheriff Oborevwori and his associates,” Biose said.

The Deputy Publicity Secretary of the All Progressives Congress in Anambra State, Chief Godwin Ezeh, has criticised the state government, saying there is little to show for the 13 per cent derivation funds received since Anambra became an oil-producing state.

Ezeh, who spoke in Awka, said the oil community of Ogwuaniocha in Ogbaru Local Government Area had remained desolate and abandoned despite being the basis for Anambra’s qualification as a beneficiary of the derivation fund. He argued that the situation reflects the state government’s failure to utilise the funds for the benefit of the oil communities and the wider population.

He accused the Governor Chukwuma Soludo-led administration of compounding the problem through what he described as an increasing appetite for borrowing and aggressive taxation of residents, despite the inflow of derivation funds.

“We are aware that the current Anambra State government has received huge amounts as 13 per cent derivation since President Bola Tinubu assumed office. Yet, despite this, the government continues to overtax poor people in the name of IGR,” Ezeh said.

According to him, the 13 per cent derivation ought to provide tax reliefs to small businesses and reduce the financial burden on ordinary citizens. “Instead, residents are suffocated with levies on a daily basis, while nothing is being said about the derivation funds. In other states, people enjoy some tax benefits from the derivation, but here in Anambra, even the oil community of Ogwuaniocha has been left abandoned since the discovery of oil,” he added.

A sociopolitical activist in the South-South, Comrade Austin Ozobo, has urged the Federal Government to pay the 13 per cent derivation funds directly to oil-producing communities in the Niger Delta rather than through state governments. Ozobo, who spoke with The PUNCH, said direct payment to communities was necessary to ensure proper development and prevent what he described as the “misappropriation of funds by Niger Delta governors.”

He expressed concern over the management of the billions of naira recently released to Delta, Bayelsa, Akwa Ibom, Rivers, Edo, Ondo, Imo, Abia, and Anambra states as derivation funds. According to him, corruption had long undermined the purpose of the allocation, which was meant to address the environmental and economic challenges caused by oil exploration.

“It is appalling that various governors of the Niger Delta states have been blindfolded by corruption, leading to the embezzlement of huge sums in the past,” he said.

He argued that despite huge derivation inflows and improvements in IGR following subsidy removal and higher taxation, most Niger Delta states still depend heavily on fed