Why State Governments Deserve a Seat in Host Community Development Trust
*From Experience to Reform: Why State Governments Deserve a Seat in Host Community Development Trust*
By Felix Osemwengie Isere,Esq.
The Petroleum Industry Act (PIA) 2021 introduced the Host Community Development Trust Fund (HCTF) as one of the most progressive reforms in Nigeria’s oil and gas sector. It was designed to give oil-producing communities a direct role in managing resources meant for their development, thereby reducing long-standing grievances and promoting peace. While this is a laudable initiative, my recent experience as Special Adviser to the Edo State Governor on Oil and Gas revealed a critical gap that threatens the effectiveness of the Fund: the exclusion of state government representatives from its governance framework.
During my time in office, I saw first-hand how this omission created challenges in project coordination, transparency, and sustainability. Too often, HCTF projects were conceived without alignment to existing state development priorities, leading to duplication of efforts, wasted resources, and in some cases, projects that added little value to the communities. State governments are the custodians of regional development plans and infrastructure strategies. Their inclusion in the Trust’s governance would ensure better synergy between community projects and broader state initiatives, guaranteeing that scarce resources are deployed for maximum impact.
Another challenge I encountered was the lack of strong oversight mechanisms. Without structured state involvement, monitoring and accountability become difficult to enforce, creating room for mismanagement and weakening confidence in the system. Including state representatives would provide an impartial layer of oversight, ensuring regulatory compliance, financial discipline, and adherence to developmental standards, while also boosting trust among oil companies, the federal government, and host communities themselves.
The issue of conflict resolution was also prominent in my experience. Oil-producing regions are often politically fragmented, with disputes that can easily escalate and threaten both peace and oil production. As Special Adviser, I frequently mediated between communities and companies, drawing on the authority and legitimacy of the state to resolve grievances. This underscored the need for state governments to play a formal role in the HCTF structure, as their presence provides the leverage needed to defuse tensions and maintain stability.
Equally concerning is the question of continuity. Community representatives often change with shifts in local politics, and with them, vital institutional knowledge is lost. By contrast, state ministries and agencies provide stability and long-term planning. Their presence would preserve institutional memory and ensure that important projects are not abandoned halfway. Moreover, the security of oil and gas infrastructure remains a pressing concern. In my role, I saw how poorly protected projects were vulnerable to vandalism and sabotage. State governments, working closely with security agencies, are far better positioned to integrate security considerations into project planning, thereby safeguarding investments and ensuring that development efforts are not undermined.
Perhaps most importantly, I observed that trust remains fragile among stakeholders. Decades of neglect and underdevelopment have fostered deep mistrust between host communities, oil companies, and government actors. By excluding state governments, the current framework risks reinforcing this sense of fragmentation. Their inclusion would demonstrate unity of purpose, bridge divides, and create a culture of shared responsibility that is essential for sustainable development.
The Host Community Development Trust Fund is a bold and necessary innovation, but it must evolve to reflect the realities on the ground. From my experience in Edo State, I am convinced that without the involvement of state governments, the Fund will struggle to achieve its intended impact. Development in oil-bearing communities is too important to be left fragmented; it requires coordination, oversight, and stability that only state governments can provide. The PIA set out to create a fairer and more inclusive system. To truly fulfill that vision, state governments must have a seat at the table. The time to act is now, because the cost of exclusion is too high.
