Business
Omo-Agege Accuses Oil Producing Areas Of Diverting 13% Derivation Funds
The Deputy President of the Senate, Ovie Omo-Agege, has decried the diversion of the 13 percent oil derivation funds by oil-producing states.
Omo-Agege, according to a statement by his Special Adviser on Media and Publicity, Yomi Odunuga, made the remarks when he hosted a delegation of Oil and Gas Host Communities of Nigeria (HOSCON), led by the Amanyanabo of Twon-Brass in the Brass Kingdom and Chairman, Bayelsa State Traditional Rulers Council, Chief Alfred Diete-Spiff.
The Deputy Senate President specifically made a case for 100 percent utilisation of the derivation funds for oil-bearing communities, as against the practice where states release only 50 percent of the money to development commissions in their states.
The Delta Central lawmaker noted that since host communities bear the burden of environmental degradation from the oil industry, it is only fair that all funds be channeled into the development of the affected areas.
Omo-Agege, who chairs the Senate Adhoc Committee on Constitution Review, expressed regrets that the utilisation of the 13 percent derivation funds has become a political tool in the hands of state governors in the region.
He said the diversion of the money has contributed gravely to the underdevelopment of the region as the affected communities can hardly boast of having access to the basic necessities of life.
He said: “I have been discussing this matter with Chief (Wellington) Okrika even before I became a senator. It is fair that the 13 percent derivation is meant to ameliorate the conditions of the people who are most impacted by oil exploration and exploitation. That is the only reason this fund was set aside as a consequence of your agitation which you led for so many years.
“These funds are not meant for the state governments. The state governments are meant to be purveyors to host communities.
“Even in states that have development commissions, they only earmark 50 percent of the funds to the Commission to manage on behalf of the host communities.
“So what happens to the other 50 percent? We have always taken the position from the outset that 100 percent of the funds is meant for the development of host communities because it is not every area that suffers from oil exploration and degradation. But for some reason, it has become a political tool”.
Omo-Agege reiterated his call for gas flaring penalties in the Petroleum Industry Bill to be paid to the host communities and not to the Federation Account, stressing that the annual contribution of 2.5 percent actual operating expenditure by oil companies to the Host Community Development Trust Fund should be increased to, at least, five per cent.
He added that the penalties from gas flaring would be used to ameliorate the living conditions in Niger Delta communities, as they suffer from the environmental impact of oil exploration.
He called on the people in the region to show more than passing interest in the development of the area and hold their leaders accountable.
In his earlier remarks, the Senior Special Assistant to the President on Niger Delta Matters, Senator Ita Enang, called on the Senate Deputy President to intervene in the N98 billion gas flare fund, the controversy surrounding the Pipeline Surveillance Contract, 13 percent derivation payment to oil-producing communities and the need to pass a bill for the establishment of a Derivation Commission.
According to him, the Niger Delta people should be engaged in the surveillance contract to give them a sense of belonging.
He also lamented the absence of development commissions in Rivers, Bayelsa and Akwa Ibom States.
The Central Bank of Nigeria (CBN) yesterday said 33 banks have met new minimum capital requirements under its recapitalisation programme, raising a combined N4.65 trillion to strengthen the financial system.
The apex bank disclosed this in a statement marking the end of the exercise, which commenced in March 2024 and drew participation from domestic and foreign investors.
The statement was jointly signed by the Director of Banking Supervision, Olubukola Akinwunmi, and the Acting Director of Corporate Communications, Hakama Sidi-Ali.
The statement said “Over the 24-month period, Nigerian banks raised a total of N4.65tn in new capital, strengthening the resilience of the financial system and enhancing its capacity to support the economy.”
The regulator said local investors accounted for 72.55 per cent of the funds, while international investors contributed 27.45 per cent, reflecting continued confidence in the sector.
Commenting on the outcome, the CBN Governor, Olayemi Cardoso, said in the statement, “The recapitalisation programme has strengthened the capital base of Nigerian banks, reinforcing the resilience of the financial system and ensuring it is well-positioned to support economic growth and withstand domestic and external shocks.”
It added that while 33 banks have complied with the new thresholds, a few others are still undergoing regulatory and legal processes.
The statement noted, “The CBN confirms that 33 banks have met the revised minimum capital requirements established under the programme.
“A limited number of institutions remain subject to ongoing regulatory and judicial processes, which are being addressed through established supervisory and legal frameworks.
“All banks remain fully operational, ensuring continued access to banking services for customers.”
The apex bank stressed that the exercise was executed without disrupting banking operations, ensuring uninterrupted access to services nationwide.
It further stated that key prudential indicators have improved, particularly capital adequacy ratios, which remain above global Basel benchmarks.
The minimum ratios were set at 10 per cent for regional and national banks and 15 per cent for banks with international licences.
The bank also said the recapitalisation coincided with a gradual exit from regulatory forbearance, a move it said improved asset quality, strengthened balance sheet transparency, and enhanced overall stability.
To preserve these gains, the CBN said it has reinforced its risk-based supervision framework, mandating periodic stress tests and adequate capital buffers for banks.
It added that supervisory and prudential guidelines would be reviewed regularly to strengthen governance, risk management, and resilience across the sector.
“The successful completion of the programme establishes a stronger and more resilient banking system, better positioned to support lending, mobilise savings, and withstand domestic and global shocks,” the statement said.
The Tide learnt that foreign capital inflows into Nigeria’s banking sector rose by 93.25 per cent year-on-year to $13.53bn in 2025, up from $7.00bn recorded in 2024, amid the ongoing recapitalisation drive by the Central Bank of Nigeria.
Data from the National Bureau of Statistics capital importation report showed that the banking sector remained the dominant destination for foreign capital, accounting for $13.53bn of the total $23.22bn recorded in 2025, representing 58.26 per cent of total inflows, up from 56.81 per cent in 2024.
The surge reflects heightened investor interest in Nigerian banks as they raised fresh capital to meet new regulatory thresholds introduced by the apex bank, with industry-wide recapitalisation activities driving large-scale inflows across all quarters of the year.
However, the Centre for the Promotion of Private Enterprise (CPPE) recently raised concerns over weak credit flows to small businesses despite recent banking sector reforms.
The CPPE, led by a renowned economist, Dr Muda Yusuf, acknowledged that the ongoing bank recapitalisation exercise by the CBN has strengthened the financial system, but warned that the benefits have yet to translate into meaningful support for the real economy.
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
