August 17, (THEWILL) — Nigeria’s nine oil-producing states amassed a total of N781.83 billion as statutory13 percent derivative fund from the Federation Account Allocation Committee (FAAC) in the first six months (H1) of 2025, according to data by the National Bureau of Statistics (NBS). The figure constitutes a 128.83 percent increase on the N440.17 billion difference between the two periods.
The 13 per cent derivation fund is a constitutional provision ensuring that states producing crude oil receive additional allocations from the Federation Account. The principle is meant to address the effects of oil extraction, foster local development, and reduce infrastructural deficits in these regions.
The derivative fund gives the states a huge financial advantage over their peers and leaves them with sufficient resources to play with. Despite the huge resources accruing to them, the oil-producing states have not shown any remarkable difference from their peers who do not enjoy such privilege.
Details of the NBS reports showed that Delta stands out among the nine states with the largest share of derivative funds. It received N228.62 billion in H1 2025 against N113.78 billion in the previous year showing a difference of N114.84 billion or 101 percent increase.
Akwa Ibom, which received N70.01 billion in H1 2024, amassed N155.68 billion this year – a surge of N85.67 billion or 122.3 percent increase.
Bayelsa pooled N165.90 billion in H1 2025 against N64.04 billion in the corresponding period last year, showing an increase of N101.86 billion, which represents a rise of 159 percent.
Rivers experienced the same growth trajectory with N89.9 billion increase in H1 2025 constituting a 153 percent over N58.78 billion recorded in H1 2024 against N148.68 billion in the review period.
Edo, which was allotted N11.90 billion in H1 2024, recorded a significant surge of N23.44 billion in the first six months of 2025, translating to an increase of N11.54 billion or 96.97 percent rise.
Ondo received N19.72 billion in H1 2025,b compared to N10.05 billion in the preceding year – showing a positive difference of N9.67 billion or 96.2 percent increase.
The single-digit recipients in H1 2024: Imo, Abia and Anambra, experienced a significant upsurge in the review period.
Imo recorded an increase of N12.1 billion to hit N17.82 billion in H1 2025 against the relatively paltry N5.72 billion received in the previous year – an increase of 211.53 percent.
Abia, which received the least in H1 2024 – N3.19 billion, experienced a surge of N7.88 billion in H1 2025 to hit N11.07 billion, constituting a jump of 247 percent.
Anambra earned an increase of N6.8 billion in H1 2025 over N4.13 billion it received in H1 2024 showing a 164.6 percent rise over the previous year’s corresponding period.
Despite the huge revenue, none of the oil-producing states recorded a dime in foreign investment in Q1 2025, according to the Capital Importation report by the NBS.
Nigeria, in the first quarter of 2025, recorded a total capital importation of $5.642 billion, which is 67.12 percent higher than the $3.376 billion recorded in Q1 2024 and 10.86 percent higher than the $5. 089 billion recorded in Q4 2024.
Of the total investments, Portfolio Investment ranked top with $5.204 billion, followed by Other Investments at $311.17 million and foreign direct investment stood at $126.29 million.
Out of the five states that recorded capital importation during the quarter, Abuja (FCT) remained the top destination with $3.047 billion, accounting for 54.11 percent of the total capital imported. Lagos State followed with $2.564 billion (45.44 percent), and Ogun state with $7.95million (0.14 percent). Others were Oyo and Kaduna States with $7.81 million and 4.06 million respectively.
Of particular concern is Imo. Despite housing the largest natural gas reserves and significant crude oil deposits in Nigeria, the state attracted zero foreign investment in five years, between 2020 and 2025, according to data by the NBS.
The statistics agency in its quarterly Capital Importation reports showed that, after recording the sum of $3 million in 2019, Imo had no dime to its name by way of investment inflow to the state till date.
The reports further revealed that Imo is the only oil-producing state in the South-east region that attracted no foreign investment for the five years, unlike its two counterparts – Anambra and Abia states which achieved a total of $51.48 million and $210.12 million, respectively.
The reports did not offer details of the investments to the states by sectors and products. However, Abia recorded the highest bulk of $150.09 million investment inflow in the third quarter of 2023, after the inauguration of Mr Alex Otti as the elected 4th governor of the state in May 2023.
Imo’s unimpressive situation is more worrying on the ground that the state is known for its largest natural gas reserves in the country and in West Africa, which is the source of huge revenue to the Nigerian government.
Imo gas feeds many households and large establishments in some parts of Nigeria. Also, the widely celebrated NNPC’s 615 km AKK Gas pipeline project from Abuja to Katsina through Kano and beyond, via the gathering facilities in Kogi state, will be fed largely with gas sourced from Ohaji-Egbema Local Government Area of Imo State, known for its abundant gas deposit.
Nigeria has nearly 300 trillion cubic feet of natural gas reserves, ranking 9th in the world, with Imo holding the largest reserve of 200 trillion cubic feet of gas deposits.
Industry experts confirm that Imo’s huge oil and gas deposits constitute an unprecedented economic asset that no other South-east state can boast of. For Imo to be lacking in foreign investment in oil, gas and other natural resources is considered a huge disappointment.
Among the major gas facilities in Imo is the ANOH Gas Processing Plant development at OML 53 (and adjacent OML 21) operated by Seplat Energy, which the firm said would drive the next phase of its growth in expanding the gas business. The project which comprises a Phase One 300MMscfd midstream gas processing plant has since been commissioned.
The gas plant located in OML 53, Niger Delta, is expected to deliver dry gas, condensate, and Liquefied petroleum gas (LPG), and otherwise known as cooking gas, to customers locally and internationally.
Industry experts say it will help the country to accelerate its transition away from small-scale diesel generators to cleaner, less expensive fuels such as natural gas for power generation. With such a significant project, stakeholders are concerned that Imo would be shunned by strategic investors, especially in the oil and gas sector.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
