Niger State Drags FG to Supreme Court Over Exclusion from 13% Derivation Fund
The Niger State Government has filed a suit at the Supreme Court against the Federal Government of Nigeria, challenging its exclusion from the 13% derivation fund despite hosting four major hydroelectric dams that contribute significantly to national electricity production.
In the suit, the state names the Attorney-General of the Federation and Minister of Justice as the sole defendant. The case seeks judicial intervention to compel the federal government to recognise Niger as a resource-producing state and include it in the derivation revenue distribution formula in accordance with constitutional provisions.
According to the state’s legal team, the hydroelectric dams—Kainji, Jebba, Shiroro, and Zungeru—are all located within Niger State and have played a central role in Nigeria’s energy sector for decades.
The state argues that these dams, developed and operated by federal agencies, generate enormous revenue annually, including power exported to neighbouring countries such as Niger Republic, Togo, and Benin.
Despite these contributions, Niger State maintains that it has never benefited from the derivation fund provided under Section 162(2) of the 1999 Constitution, which grants 13% of federally collected revenue from natural resources back to the states where those resources are extracted or exploited.
The state’s legal representative, Mohammed Ndarani, SAN, explained that this action is long overdue, pointing to the economic, environmental, and social costs borne by Niger over the years.
He cited frequent flooding, forced displacement, loss of arable land, and degradation of communities surrounding the dams, all of which, he argued, have gone uncompensated.
Data referenced in the suit indicates that the dams have produced between 2.2 million and 2.8 million megawatts of electricity annually from 2020 to 2023. The government believes this level of output qualifies the state as a resource-producing entity and demands similar treatment to oil-producing states that already benefit from derivation funds.
Niger State is requesting the Supreme Court to interpret and enforce relevant provisions of the Constitution and the Allocation of Revenue (Federation Account, etc.) Act, 2004, to affirm its right to a share of the derivation fund.
The suit, filed under the court’s original jurisdiction, seeks declaratory and injunctive reliefs that, if granted, could set a precedent for other states hosting federal infrastructure projects that generate national revenue but fall outside existing derivation classifications.
No date has been fixed yet for the hearing, but legal analysts say the outcome could have far-reaching implications for Nigeria’s fiscal federalism and revenue allocation framework.
