INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue X October 2025
Page 4082
www.rsisinternational.org
Enhancing Financial Accountability in Oil Spill Compensation
Funds: Integrating Accounting and Environmental Management in
Rivers State, Nigeria
Boma Aaron Philip
1
,
Bulus Simon
2
,
Ejabena C. Dupe
3
1
Department of Environmental Science and Management Technology, Federal Polytechnic, Ukana Akwa
Ibom State
2
Department of Environmental Science and Management Technology, Federal Polytechnic, Ukana Akwa
Ibom State
3
Department of Accountancy, Federal Polytechnic, Ukana, Akwa Ibom State
DOI: https://dx.doi.org/10.51244/IJRSI.2025.1210000351
Received: 07 November 2025; Accepted: 14 November 2025; Published: 24 November 2025
ABSTRACT
This study investigated the relationship between financial management systems, corruption challenges and the
role of financial technology in enhancing accountability in oil spill compensation fund management in Nigeria.
Data from 324 respondents across regulatory agencies, oil companies, communities, and NGOs were analyzed
using descriptive statistics, correlation, and regression techniques. Results revealed that existing financial
management systems significantly influence fund transparency and disbursement efficiency (R2 = 0.377, p <
0.05), while corruption and mismanagement negatively affect equitable distribution (r = -0.661, p < 0.001).
Conversely, the adoption of FinTech solutions such as blockchain and AI-driven auditing strongly enhances
accountability (R2 = 0.540, p < 0.001). The study concludes that integrating technological innovations with
institutional reforms and community participation provides a sustainable pathway for transparent compensation
governance.
Keywords: Accountability, Blockchain, Corruption, Environmental Governance, Oil Spill Compensation
INTRODUCTION
The Niger Delta region of Nigeria, particularly Rivers State, continues to grapple with complex socio-
environmental challenges arising from decades of oil exploration and production. Oil spills, gas flaring, and
pipeline vandalism have devastated farmlands, polluted water bodies, and displaced livelihoods (Nwankwo &
Eze, 2022). In 2024 alone, Nigeria recorded 589 oil spill incidents, releasing over 3 million litres of crude oil
into terrestrial and aquatic ecosystems one of the highest environmental pollution levels in sub-Saharan Africa
(Nairametrics, 2025). Although this represents a slight reduction compared to previous years, poor remediation,
delayed compensation, and weak institutional coordination continue to undermine environmental recovery
efforts (Udo et al., 2023).
Environmental studies in the Niger Delta have increasingly applied geospatial and risk-assessment tools to
evaluate the extent of oil pollution and its ecological impacts. Recent assessments in Rivers and Bayelsa States
show that soil and groundwater contamination remain critical public health risks, with heavy metal
accumulation and declining agricultural productivity still prevalent (Okonkwo et al., 2023; Ene et al., 2024).
Despite these findings, remediation initiatives often fail due to poor financial accountability and lack of
transparency in the disbursement of oil spill compensation funds (UNEP, 2011; Ibaba, 2020). This disconnect
between financial management and environmental restoration represents a major governance gap in Nigeria's
oil and gas sector.
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue X October 2025
Page 4083
www.rsisinternational.org
Accountability mechanisms in oil spill compensation management have come under increasing scrutiny. The
Nigeria Extractive Industries Transparency Initiative (NEITI) recently demanded full disclosure and
accountability from oil operators regarding environmental liabilities and compensation payments (NEITI,
2024; The Guardian 4
th
April, 2024). Similarly, Ajiboye (2023) and Uzochukwu (2024) argue that ineffective
coordination between regulatory agencies such as NOSDRA and the Ministry of Environment has allowed
financial mismanagement, duplication of compensation claims, and inequitable distribution of funds to persist.
While multinational oil companies often claim compliance with corporate social responsibility (CSR) and
remediation obligations, communities in the Niger Delta frequently report delays, underpayment, or diversion
of compensation funds (Onyeocha & Agboola, 2023).
However, there remains a critical research gap: most existing studies examine either the environmental impact
of oil spills or the financial dimensions of resource governance in isolation. Few have explored how accounting
systems, financial technology (FinTech) innovations (such as blockchain and AI-based audits), and
environmental management frameworks can jointly enhance transparency, equity, and sustainability in oil spill
compensation administration. Integrating these disciplines can provide a novel approach to promoting both
financial integrity and ecological restoration in the Niger Delta (Adeleke et al., 2023; Oghenekohwo & Ite,
2024). Therefore, this study seeks to bridge that gap by evaluating the existing financial management systems
governing oil spill compensation funds in Rivers State, identifying major accountability challenges, and
exploring how financial technology can be leveraged to promote transparency and environmental
sustainability. The overarching aim is to develop a sustainable financial accountability framework that
integrates accounting principles with environmental management practices for effective compensation
governance in oil-producing communities of Rivers State, Nigeria. To achieve this aim, the study is guided by
the following hypotheses
H₀₁: The current financial management systems do not significantly impact the transparency and efficiency
of oil spill compensation fund disbursement.
H₀₂: Challenges such as corruption and mismanagement do not significantly affect the equitable distribution
of oil spill compensation funds.
H₀₃: The adoption of financial technology solutions (e.g., blockchain, AI-driven audits) does not
significantly enhance accountability in oil spill compensation fund management
MATERIAL AND METHODS
The study employed a descriptive survey design that combined both quantitative and qualitative approaches to
assess the effectiveness of financial accountability mechanisms in the management of oil spill compensation
funds in Rivers State, Nigeria. Descriptive survey design enabled empirical assessment of existing
accountability systems, corruption challenges, and technology adoption in compensation fund management
(Saunders, Lewis & Thornhill, 2019). The target population comprised 3,211 stakeholders directly involved in
oil spill compensation and environmental remediation processes. This estimate was derived from official
records of the National Oil Spill Detection and Response Agency (NOSDRA, 2023), Ministry of Environment
field offices, and selected oil company registers of compensation beneficiaries and financial officers operating
within the state. Using the Taro Yamane (1967) formula at a 5% margin of error, a sample size of 356
respondents was determined. A multi-stage sampling technique, comprising stratified, random, and purposive
methods, was adopted to ensure fair representation and inclusion of participants with critical operational
knowledge.
Primary data were obtained through structured questionnaires and semi-structured interviews, while secondary
data were sourced from institutional reports, UNEP (2011) environmental assessments, NOSDRA
compensation records, and relevant scholarly publications. The instruments were subjected to expert validation
by three scholars in accounting, environmental management, and public administration from the Federal
Polytechnic Ukana and the University of Port Harcourt, ensuring content clarity and contextual accuracy.
Reliability was established through a pilot test involving 30 respondents in Delta State, yielding Cronbach’s
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue X October 2025
Page 4084
www.rsisinternational.org
Alpha coefficients ranging from 0.84 to 0.89 with an overall reliability of 0.87, indicating strong internal
consistency in line with Nunnally’s (1978) benchmark.
The data were analyzed using the Statistical Package for the Social Sciences (SPSS) version 26. Descriptive
statistics, (standard deviation, frequency, and percentage) were used to summarize demographic and perceptual
responses. Inferential statistics (Pearson correlation & multiple regression analyses) were employed to establish
associations between financial management systems, corruption, and accountability and to test the predictive
strength of the independent variables financial systems, corruption, and financial technology on the dependent
variable, accountability. Analysis of variance (ANOVA) was used to determine the model’s overall
significance at the 0.05 level of probability.
RESULTS AND DISCUSSION
Table 4.1 Demographic Characteristics of Respondents
Variable
Category
Frequency
Percentage (%)
Gender
Male
198
61.1
Female
126
38.9
Age
25-34 years
92
28.4
35- 44 years
130
40.1
45 years and above
102
31.5
Educational Level
OND/HND
88
27.2
B.Sc./B.A.
152
46.9
M.Sc./Ph.D.
84
25.9
Category of Respondent
Regulatory Agencies
58
17.9
Oil Companies’ Financial Officers
84
25.9
Community Representatives
124
38.3
NGOs/Environmental Activists
58
17.9
Source: Field Survey (2025)
Table 4.2: Perceived Effectiveness of Financial Management Systems
Mean
Std. Dev
Interpretation
2.42
1.08
Disagree
2.65
1.04
Disagree
2.38
1.12
Disagree
2.54
1.06
Disagree
3.12
1.08
Neutral
2.62
6.48
Source: Computed From the Field Data (2025)
Table 4.3: Perceived barriers to compensation management of oil spill.
Challenge
Mean
Std. Dev
Rank
Corruption and diversion of funds
4.29
0.82
1st
Political interference in fund allocation
4.16
0.91
2nd
Community-based monitors exclusion
3.94
1.03
3rd
Inadequate audit trail and documentation
3.87
0.98
4th
Lack of inter-agency co-ordination
3.72
0.95
5th
Source: Computed From the Field Data (2025)
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue X October 2025
Page 4085
www.rsisinternational.org
Table 4.4: Impression of Financial Technology in Improving Accountability.
Indicator
Mean
Std. Dev
Interpretation
Blockchain is able to guarantee tracked fund transfers
4.18
0.78
Agree
AI based auditing identifies anomalies at an early stage
4.09
0.81
Agree
E-payment systems minimize human intervention
4.04
0.88
Agree
Digital dashboards improve fund monitoring of the environment
4.12
0.84
Agree
Technology enhances transparency and the speed of reporting
4.15
0.79
Agree
Source: Computed From the Field Data (2025)
Table 4.5: Regression Analysis Showing the Impact of Financial Management Systems on Transparency and
Efficiency of Oil Spill Compensation Fund Disbursement (Test of H₀
1
)
Model Summary
R
R²
Adj. R²
Std. Error
Regression Result
0.614
0.377
0.373
0.482
ANOVA
df
F
Sig.
Regression
1
42.681
0.000
Residual
322
Total
323
`
Decision
Since p-value (0.000) < 0.05, we reject H₀₁.
Source: SPSS Version 25 Analysis (2025)
Table 4.6: Correlation and Regression Results Showing the Effect of Corruption and Mismanagement on
Equitable Distribution of Oil Spill Compensation Funds (Test of H₀₂)
Variables
Correlation (r)
Sig. (p)
Corruption vs Equitable Distribution
-0.661
0.000
Mismanagement vs Equitable Distribution
-0.593
0.000
Inefficiency vs Equitable Distribution
-0.549
0.000
Regression Summary: R = 0.708, R² = 0.501, F = 54.222, p = 0.000
Decision: Since p-value (0.000) < 0.05, we reject H₀₂.
Source: SPSS Version 25 Analysis (2025)
Table 4.7: Regression Analysis Showing the Effect of Financial Technology Adoption on Accountability in Oil
Spill Compensation Fund Management (Test of H₀₃)
Model Summary
R
R²
Adj. R²
Std. Error
Regression Result
0.735
0.540
0.538
0.466
ANOVA
df
F
Sig.
Regression
1
69.378
0.000
Residual
322
Total
323
Decision: Since p-value (0.000) < 0.05, reject H₀₃.
Source: SPSS Version 25 Analysis (2025)
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue X October 2025
Page 4086
www.rsisinternational.org
Table 4.8: Summary of Hypothesis Test Results
Hypothesis
Statistical Technique
p-Value
Decision
Interpretation
H₀₁
Regression
0.000
Rejected
Financial systems affect transparency and efficiency
H₀₂
Correlation/Regression
0.000
Rejected
Corruption and mismanagement undermine equity
H₀₃
Regression
0.000
Rejected
FinTech significantly improves accountability
Proposed Sustainable Financial Accountability Framework
Figure 3.1: Proposed Sustainable Financial Accountability Framework
DISCUSSION OF FINDINGS
Table 4.1 revealed that, males constituted 61.1% of the respondents, while females made up 38.9%. This
gender distribution reflects the male-dominated nature of the oil and environmental management sectors in
Nigeria, especially in field-based activities that often involve community monitoring and corporate
environmental oversight (Edeh et al., 2023). Most respondents were within the age range of 35-44 years
(40.1%), an age bracket typically associated with mid-career professionals who hold decision-making and
technical roles in both oil and regulatory agencies. The results further revealed that, majority (46.9%)
possessed bachelor’s degrees, followed by 27.2% with ND/HND qualifications and 25.9% with postgraduate
degrees. This educational profile suggests that respondents were adequately literate and professionally
competent to assess the dynamics of oil spill compensation management (Okoro et al., 2022). The diversity of
respondents comprising regulatory officers (17.9%), oil company financial staff (25.9%), community
representatives (38.3%), and NGO actors (17.9%) improved the credibility of the data by incorporating
multiple stakeholder perspectives (UNEP, 2021).
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue X October 2025
Page 4087
www.rsisinternational.org
The results in Table 4.2 shows that, respondents generally disagreed with statements relating to financial
transparency, audit regularity, and fund disbursement efficiency (Mean = 2.62). This finding indicates systemic
weaknesses in financial accountability practices within the oil spill compensation process. Transparency and
audit integrity are core principles of environmental finance, as highlighted by Ezirim and Nwachukwu (2020),
who argued that opaque financial systems in environmental remediation undermine community trust and
ecological restoration outcomes. The relatively neutral response on inter-agency collaboration (Mean = 3.12)
suggests that coordination among institutions such as NOSDRA, the Ministry of Environment, and oil firms is
improving but remains insufficient. Akaninyene and Effiong (2023) similarly noted that fragmented
institutional linkages in the Niger Delta impede the efficient implementation of remediation projects and
financial redress mechanisms. Regression analysis further confirmed this observation: a significant relationship
(R = 0.614, R² = 0.377, p < 0.05) exists between financial management systems and fund transparency, leading
to the rejection of H₀₁. Thus, current financial systems significantly impact how transparent and efficient
compensation fund disbursement becomes. This aligns with World Bank (2022) recommendations that
sustainable environmental funding should integrate standardized financial control systems, digital reporting,
and public accountability tools.
As shown in Table 4.2 (barriers), corruption (Mean = 4.29) and political interference (Mean = 4.16) emerged as
the most critical challenges. These findings resonate with Ibaba (2020) and Oviasuyi and Uwadiae (2021), who
documented that financial corruption, weak auditing, and elite capture frequently, distort oil spill compensation
processes in the Niger Delta. The regression results (R = 0.708, R² = 0.501, p < 0.05) indicate that corruption,
mismanagement, and inefficiencies jointly account for about 50.1% of the variation in equitable fund
distribution. These results support rejecting H₀₂ and confirm that governance failures substantially undermine
equity and justice in compensation fund management. Eneh (2021) also stressed that without transparent
accounting and participatory monitoring, affected communities rarely experience fair compensation, leading to
repeated cycles of grievance and underdevelopment. Furthermore, the negative correlations (r = -0.661 for
corruption, r = -0.593 for mismanagement) empirically validate the perception that governance deficits
diminish both financial and environmental justice outcomes (Eze et al., 2022). This implies that transparency in
fund use is not just a financial necessity but an environmental imperative that determines the success of post-
spill restoration programs.
Table 4.3 presents respondents’ perceptions of financial technology’s contribution to accountability. The
results show high mean scores across all indicators (Mean range: 4.04-4.18), reflecting strong agreement that
blockchain, AI-based auditing, and digital dashboards improve fund tracking, transparency, and speed of
reporting. Regression analysis (R = 0.735, R² = 0.540, F = 69.378, p < 0.05) indicates that financial technology
accounts for over 54% of the variance in accountability enhancement, leading to the rejection of H₀₃. These
findings align with Hassan and Adamu (2023), who reported that blockchain-enabled fund management in
extractive industries promotes traceability, reduces leakages, and fosters stakeholder confidence.
Environmental scientists like Okonkwo et al. (2022) also emphasized that the integration of digital systems into
environmental fund management improves transparency in ecosystem restoration projects by linking financial
flows to environmental performance metrics. Hence, the adoption of blockchain and AI-driven audits not only
strengthens accountability but also supports sustainable resource governance in oil-impacted ecosystems.
Based on these empirical findings, the study proposes a Sustainable Financial Accountability Framework
which identified five key components these are as follows:
i. Regulatory Accountability: this is to strengthening NOSDRA and Auditor-General offices to enforce
compliance with transparent reporting standards.
ii. Technological Integration: It means adoption of blockchain-based compensation tracking and AI-
enabled auditing for the effectiveness of financial management systems in Rivers State.
iii. Community Inclusion: Ensuring beneficiaries and local leaders participate in fund verification and
disbursement monitoring.
iv. Institutional Collaboration: Establishing an integrated task force between oil companies, NGOs, and
government agencies.
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue X October 2025
Page 4088
www.rsisinternational.org
v. Environmental Linkage: Linking financial accountability to measurable environmental recovery
outcomes.
The framework aligns with UNDP (2022) and OECD (2021) guidelines for sustainable environmental
governance, which emphasize transparency, participatory monitoring, and digital integration as global best
practices.
CONCLUSION
The findings demonstrate that financial management structures significantly determine the level of
transparency in oil spill compensation disbursement. Corruption, poor coordination, and political interference
remain major obstacles to equitable fund allocation. However, the integration of digital financial technologies--
particularly blockchain and AI-based audits--offers a verifiable, tamper-proof system for managing
compensation funds. Strengthening institutional accountability and linking financial oversight to environmental
recovery outcomes are vital for restoring public trust and ensuring sustainable remediation in oil-producing
regions.
RECOMMENDATIONS
i. Empower NOSDRA and the Auditor-General's office to enforce mandatory financial disclosures and
independent audits.
ii. Institutionalize blockchain-based tracking and AI auditing to enhance fund transparency and minimize
human interference.
iii. Integrate local representatives in fund verification to promote participatory accountability.
iv. Establish a joint accountability taskforce among government, oil companies, and NGOs.
v. Tie compensation utilization directly to measurable environmental recovery indicators.
REFERENCES
1. Abubakar, S., & Bala, A. (2021). Transparency and accountability in public sector financial
management in Nigeria: Challenges and prospects. International Journal of Public Administration and
Management Research, 6(2), 45-58. https://doi.org/10.36108/IJPAMR/0202/60
2. Akaninyene, I. M., & Effiong, A. U. (2023). Institutional coordination and financial accountability in
environmental remediation projects in the Niger Delta, Nigeria. Journal of Environmental Policy and
Management, 15(2), 87-102. https://doi.org/10.1016/j.jepm.2023.06.007
3. Akinyemi, T. E., & Adejumo, O. O. (2020). Oil spill compensation and environmental justice in the
Niger Delta region of Nigeria. Journal of Environmental Management and Sustainability, 8(1), 33-48.
https://doi.org/10.5430/jems.v8n1p33
4. Akintola, K. A., & Ojo, M. (2022). Blockchain adoption and financial transparency in Nigeria's public
sector. African Journal of Accounting and Financial Research, 9(3), 91-105.
https://doi.org/10.46654/AJAFR.9322.008
5. Ayuba, A., & Nweke, C. N. (2021). The role of accounting systems in enhancing environmental
compensation accountability in oil-producing regions. Nigerian Journal of Environmental Studies,
12(4), 210-225.
6. Edeh, J. U., Amadi, C. C., & Ibok, S. O. (2023). Gender dynamics and stakeholder participation in oil
spill response and environmental management in Nigeria. African Journal of Environmental
Sustainability, 12(4), 214-227. https://doi.org/10.4314/ajes.v12i4.6
7. Eneh, O. C. (2019). Environmental degradation, oil spillage and the need for improved governance in
Nigeria's petroleum sector. Environmental Policy Review, 4(2), 1-13.
8. Eneh, O. C. (2021). Transparency and accountability in environmental compensation governance in
Nigeria. Nigerian Journal of Environmental Management, 18(1), 55-70.
9. Etim, D. E., & Akpan, J. U. (2023). Financial governance and compensation fund management in oil-
impacted communities of Rivers State. Journal of Environmental Accounting and Finance, 11(2), 85-
100. https://doi.org/10.1234/jeaf.2023.11285
INTERNATIONAL JOURNAL OF RESEARCH AND SCIENTIFIC INNOVATION (IJRSI)
ISSN No. 2321-2705 | DOI: 10.51244/IJRSI |Volume XII Issue X October 2025
Page 4089
www.rsisinternational.org
10. Eze, B. E., Uche, C. A., & Madu, N. C. (2022). Governance deficits and environmental justice in oil-
producing regions of Nigeria. Journal of Sustainable Development Studies, 14(3), 101-118.
11. Ezirim, C. B., & Nwachukwu, A. N. (2020). Financial transparency and audit practices in Nigeria's
environmental remediation projects. International Journal of Accounting and Finance, 9(2), 65-81.
12. Hassan, I., & Adamu, L. M. (2023). Blockchain applications in extractive industry finance: Enhancing
accountability and transparency in resource governance. Journal of Financial Innovation and
Technology, 7(1), 33-49. https://doi.org/10.1080/27665392.2023.1457012
13. Ibaba, S. I. (2020). Oil spill compensation, corruption, and community underdevelopment in the Niger
Delta. African Journal of Public Policy, 9(2), 119-138.
14. National Oil Spill Detection and Response Agency (NOSDRA). (2023). Annual oil spill compensation
and remediation report: Rivers State field operations. Abuja: Federal Ministry of Environment.
15. Ndukwe, C., & Ijeoma, B. (2022). Financial technology and public accountability in Nigeria: The
moderating role of institutional integrity. Journal of Accounting and Financial Innovation, 10(1), 56-
72.
16. Nunnally, J. C. (1978). Psychometric theory (2nd ed.). New York: McGraw-Hill.
17. Okonkwo, D. C., Udo, I. F., & Ekwere, A. A. (2022). Digital accountability and ecosystem restoration
in oil spill-impacted areas of Nigeria. Environmental Science and Policy Review, 11(3), 78-92.
18. Okoro, P. O., Ibe, K. O., & Effiong, S. A. (2022). Educational competence and administrative capacity
in oil spill fund management in Nigeria. International Journal of Development and Policy Studies,
10(1), 33-49.
19. Organisation for Economic Co-operation and Development (OECD). (2021). Transparency and
accountability in environmental governance. Paris: OECD Publishing. https://doi.org/10.1787/env-
2021-en
20. Oviasuyi, P. O., & Uwadiae, I. (2021). Corruption and elite capture in oil spill compensation
management in the Niger Delta. African Governance and Development Journal, 8(2), 201-217.
21. Saunders, M., Lewis, P., & Thornhill, A. (2019). Research methods for business students (8th ed.).
Harlow: Pearson Education Limited.
22. United Nations Development Programme (UNDP). (2022). Guidelines for sustainable environmental
governance and digital accountability frameworks. New York: UNDP Publications.
https://www.undp.org
23. United Nations Environment Programme (UNEP). (2011). Environmental assessment of Ogoniland.
Nairobi: UNEP. https://www.unep.org/ogoni
24. United Nations Environment Programme (UNEP). (2021). Post-Ogoniland assessment: Monitoring
environmental remediation and compensation outcomes in the Niger Delta. Nairobi: UNEP.
https://www.unep.org
25. Uzonwanne, M. C., & Iheriohanma, E. B. (2023). Corruption, mismanagement, and the paradox of oil
spill compensation in Nigeria. African Review of Economics and Governance, 15(1), 142-160.
https://doi.org/10.5281/zenodo.7512394
26. World Bank. (2022). Environmental and social accountability framework for extractive industries in
sub-Saharan Africa. Washington, DC: World Bank Publications.
https://openknowledge.worldbank.org