Kogi State will once again begin receiving the constitutionally guaranteed 13% oil derivation fund following renewed recognition of its oil‑producing status.
This development could mark the end of a long‑running boundary dispute with neighbouring Anambra and Enugu States over contested oil wells in the Anambra Basin.
Mohammed Shehu, Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), disclosed the decision during a high‑level meeting with a delegation from Kogi State led by Governor Usman Ododo.
The meeting, held at the Commission’s headquarters, focused on:
- Kogi’s eligibility for the oil derivation fund
- Optimisation of the state’s resource endowments
- Transparency in the allocation process
Governor Ododo has consistently criticised Kogi’s exclusion from derivation benefits despite its recognition as an oil‑producing state.
The exclusion stemmed from disputes with Anambra and Enugu, which complicated the allocation process.
Background of the oil derivation dispute
In 2021, the federal government confirmed commercial oil deposits in Ibaji, Kogi State, making it Nigeria’s first oil‑producing state outside the Niger Delta. This was later officially reaffirmed by the Nigerian Senate last year.
That same year, Anambra State was also recognised as oil‑producing based on wells in Aguleri, near the Kogi boundary.
Since October 2022, both Kogi and Anambra have received allocations from the 13% derivation fund.
However, Enugu State insists it has been unfairly excluded, arguing that some of the oil wells straddle its territory.
The contested wells in Ibaji (Kogi), Aguleri (Anambra), and parts of Enugu lie in border zones where boundaries remain disputed.
RMAFC’s position
Shehu emphasised RMAFC’s mandate to ensure equity and fiscal justice in revenue distribution:
“Our role is to ensure that every oil‑producing state receives its rightful share of resources, whether from oil, gas, or solid minerals. We will stand firmly with Kogi to provide data, guidance, and technical support to optimise these resources for the benefit of its citizens.”
A multi‑agency committee has now been established, comprising representatives from RMAFC’s Gas Investments and Crude Oil Departments, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the Kogi State Government.
The committee will address technical and administrative issues delaying disbursement.
Why this matters for Kogi
- Revenue Boost: The 13% derivation fund represents billions of naira annually, critical for Kogi’s budget.
- Infrastructure Development: Funds can be channelled into roads, schools, healthcare, and industrial projects.
- Strategic Expansion: Kogi’s recognition expands Nigeria’s oil map beyond the Niger Delta, highlighting inland basins.
- Challenges: The state must address technical capacity, environmental management, and equitable distribution of oil wealth.
The NUPRC delegation confirmed ongoing oil production at OPL 915 (now OML 155) within Kogi’s territory, stressing the importance of infrastructure and security for sustaining investment.
“We look forward to continued engagement with the Commission to ensure that the resources of Kogi State are fully optimised and benefit our people,” said Ododo, expressing optimism about the prospects.
Broader implications
Kogi’s emergence as an oil‑producing state reshapes Nigeria’s energy narrative, which has now extended production beyond the Niger Delta to the North‑central region.
The dispute with Anambra and Enugu mirrors similar resource control battles seen in Akwa Ibom vs. Cross River, Imo vs. Rivers, and now Gombe vs. Bauchi following discoveries in the Kolmani River Basin.
As has been with other issues in the Nigerian polity, how the Kogi dispute is resolved will set a precedent for future inland oil‑producing states outside the Niger Delta.