Niger State drags FG to Supreme Court over exclusion from 13% derivation

The Niger State Government has filed a suit against the Federal Government at the Supreme Court, seeking to be included among beneficiaries of the 13 percent derivation fund allocated to states producing natural resources.

In the originating summons filed by a legal team led by senior advocate Mohammed Ndarani, the state listed the Attorney-General of the Federation and Minister of Justice as the sole defendant.

The state is asking the apex court to determine whether it qualifies as a resource-producing state under Section 162(2) of the 1999 Constitution (as amended), given its contribution to electricity generation through multiple hydroelectric dams within its territory.

It also urged the court to invoke and interpret Section 232 (1) & (2) of the Constitution, alongside the Allocation of Revenue (Federation Account, etc.) Act of 2004, to compel the federal government to include it among states entitled to the derivation benefit.

Niger State argued that it has long hosted four major hydroelectric dams—Kainji, Jebba, Shiroro, and Zungeru—which it said are central to Nigeria’s electricity supply, and even power neighbouring countries like the Republics of Benin, Togo and Niger. The state contended that it has generated significant fiscal revenue for the federation through these power installations but has never been compensated via derivation payments.

“The failure to account for the fiscal contributions of the hydroelectric dams has led to continued exploitation and marginalisation of the people of Niger State,” Ndarani, SAN, stated in the filing.

The plaintiff maintained that the exclusion of the state from the derivation formula is unjust, especially as the dams occupy large swathes of arable land, thereby limiting the agricultural activities of the predominantly agrarian communities around them.

It also pointed out that the presence of the dams has made local communities vulnerable to persistent flooding, resulting in the destruction of lives, livestock and property, and displacing thousands over the years.

According to the state, a recent Physicochemical/Microbiological Impact Assessment Report revealed high levels of environmental degradation in the areas surrounding the dams, warning of worsening ecological consequences if urgent measures are not taken.

The suit criticised the Attorney-General for failing in his duty to offer sound legal advice to the President on equitable resource distribution and for not ensuring that institutions like the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) and the Auditor-General of the Federation recognise Niger State’s contributions.

“The AGF is responsible for advising and representing the government on legal matters relating to the Federation Account, including the financial records prepared by the Accountant-General,” the suit read.

It further lamented the absence of comprehensive data from the National Bureau of Statistics (NBS) on electricity generation from the dams between 1968 and 2019. However, it cited NBS records for 2020 to 2023, which indicated annual generation figures ranging from over 2.2 million megawatts to more than 2.8 million megawatts.

“These dams have generated enormous fiscal revenue that the federal government has collected and distributed across all states without recognising Niger State’s role as host and producer,” Ndarani noted.

The state said it was seeking justice for what it described as decades of neglect, flooding, and economic hardship endured by its citizens due to federal control of its hydro resources.

It therefore asked the Supreme Court to declare its entitlement to the 13 percent derivation and to order the federal government to immediately include it among the benefiting states.

No date has been set for hearing the case.