Policy Alert and BudgIT Foundation have urged Akwa Ibom’s Host Community Development Trusts to diversify beyond statutory oil company funding by strengthening governance, accountability and project delivery to attract grants and strategic partnerships.
Host Community Development Trusts (HCDTs) in Akwa Ibom State have been urged to move beyond reliance on statutory contributions from oil companies and develop stronger systems for attracting grants, partnerships and other legitimate sources of funding.
A presentation themed “Beyond Statutory Funding: Positioning HCDTs for Grants and Partnerships” focused on strengthening the capacity of HCDTs to mobilise resources, improve governance and transparency, and demonstrate measurable development outcomes in their host communities.
Head, Energy, Extractives and Climate Justice Programme at Policy Alert, Edidiong Dickson, said the Petroleum Industry Act (PIA) 2021 provides a legal basis for HCDTs to receive donations, gifts, grants and honoraria in addition to statutory contributions from oil companies.
He said Section 240(3) of the Act permits HCDTs to receive such resources, provided they are used to achieve the trust’s objectives.
According to him, this means statutory contributions should be regarded as “seed capital” that can help HCDTs build sustainable resource mobilisation strategies rather than as their only source of funding.
He called on HCDTs to begin seeing themselves as development institutions with systems similar to those of non-governmental organisations, rather than merely as structures established to receive and spend money from oil companies.
Mr Dickson identified institutional identity, good governance, strategic planning, professional financial management, programme management, monitoring and evaluation, documentation, evidence-building, resource mobilisation and partnerships as critical requirements for the transition.
Mr Dickson also called on HCDTs to utilise their five-year Community Development Plans not only as compliance documents but also as fundraising and investment tools.
He said the plans could serve simultaneously as a development strategy, programme pipeline, investment prospectus, partnership framework and fundraising roadmap.
He advised the trusts to divide their development plans into clearly defined, fundable programmes covering areas such as education and skills, health, livelihoods and enterprise, women and youth empowerment, environmental sustainability, climate resilience, infrastructure, energy access and disability inclusion.
He said potential funders would scrutinise the governance structures, financial systems, transparency mechanisms, programme capacity, safeguards and evidence of impact of HCDTs before committing resources.
Mr Dickson identified six institutional improvements that could make HCDTs more attractive to funders: professional documentation, stronger financial systems, institutionalised transparency, inclusion of women, young people and persons with disabilities, evidence-based reporting and strategic partnerships.
He said HCDTs should maintain organisational profiles, strategic plans, policies, project portfolios, budgets, accounts, audits and project impact reports.
They should also publish information about projects, budgets, expenditure, procurement and results, he said.
The Programme Manager of Policy Alert, Koko Udo, in a presentation titled “Appraising HCDT Projects Against Standardised Monitoring and Evaluation Indicators,” challenged the trusts to focus beyond completing projects to demonstrating the changes produced by their interventions.
He said HCDTs should consistently ask two questions when assessing their projects: “What evidence will show us that this project is making progress or achieving its objective?” and “What changed because of the project?”
Mr Udo presented an HCDT appraisal scorecard based on eight weighted dimensions: relevance and community priority, inclusion and gender responsiveness, project completion and quality, participation, transparency and accountability, functionality and utilisation, sustainability and maintenance, value for money and cost effectiveness, and outcomes and beneficiary benefits.
He said the framework would help HCDTs assess whether projects are responding to genuine community priorities, being delivered to acceptable standards, remaining functional and producing sustainable benefits.
The Head of Natural Resource and Climate Governance at BudgIT Foundation, Enebi Opaoluwa, focused on accountability and transparency mechanisms in HCDT operations.
On reporting, Mr Opaoluwa said the PIA imposes specific deadlines on HCDT management and governance structures, making timely reporting an important component of good governance.
He said the management committee is required under Section 255(a) to submit its mid-year activity report to the Board of Trustees by 31 August each year.
Under Section 255(b), the management committee is required to submit its annual report and audited accounts to the Board of Trustees by 28 February of the following year.
The Board of Trustees is required under Section 255(c) to submit the trust’s annual report and audited accounts to the settlor by 31 May, while the settlor is required under Section 255(d) to submit the annual report and audited accounts to the relevant commission or authority by 31 May.
He said auditors are appointed annually to audit the trust’s accounts in accordance with Section 254(b) of the PIA.
Mr Opaoluwa also addressed questions concerning the payment of the statutory contribution by settlors, project approval and taxation.
He said where a settlor fails to pay the required three per cent contribution, the Board of Trustees should formally notify the relevant regulatory authority, such as the Nigerian Upstream Petroluem Regulatory Commission or the Nigerian Midstream and Downstream Petroleum Regulatory Authority depending on the settlor’s operations.
He said non-payment or non-compliance could attract regulatory sanctions against the settlor, including possible revocation of its licence, as provided under Section 238 of the PIA.
On project approval, Mr Opaoluwa said the Host Community Advisory Committee articulates community needs, while the management committee identifies and recommends projects.
The Board of Trustees, he said, has the authority to approve projects.
