By Innocent Edemhanria
As Nigeria faces fresh Extractive Industries Transparency Initiative (EITI), revalidation test in 2016, there are emerging issues that may mar her chances of scaling through the exercise to sustain her EITI compliant status. The exercise sets a greater task on the Federal Government to entrench transparency and accountability in the extractive industry in Nigeria. In 2012, EITI approved a new set of standards which requires countries like Nigeria that are EITI compliant to undergo re-validation every three years. Since Nigeria was designated as an EITI compliant country by the global body in 2013, a re-validation process is thus due by 2016.
As EITI set out to ascertain the level of implementation of her standards in Nigeria, What are Nigeria’s chances of retaining her status, especially, when you consider the fact that the sector have been characterised by massive corruption, which were revealed in the Nigerian Extractive Industry Transparency Initiative (NEITI) reports; the House of Representatives subsidy probe report, Aigboje Aig-Imoukhuede-led committee report on subsidy, Nuhu Ribadu-led Petroleum Revenue Special Task Force report and the most recent, the Price Waterhouse Coopers (PWC) audit report.
As a rule, EITI requires that member countries must ensure that their audit reports are current and regular in order to sustain their compliant status in the global EITI. To this end, NEITI should get some credit that it has audit reports up till 2012. The oil and gas audit for the year 2012 was inaugurated in May 2014 by NEITI as part of its national and global mandate in the implementation of the Extractive Industry Transparency Initiative in Nigeria (EITI). The exercise covered financial, physical and process issues under the new EITI standards. The report was soon released to the public where it noted emphatically that Nigeria earned $62.9 billion (about N12.5 trillion) as revenue from the oil and gas sector in 2012. NEITI also has to her credit, solid minerals industry audit for the period 2007 – 2010. By these achievements, NEITI have met the global and national expectation of making its reports regular.
However, a major issue with Nigeria for which the current administration must do something about, is the non implementation of NEITI audit reports. This indeed, is the crux of the matter which may count against the country in the forth coming revalidation process. Stakeholders including civil society groups are concerned that so far, the NEITI process has been reduced to mere issuing comprehensive report to inform the public on how much the country has earned and how much has not been remitted to the federation account, but the remediation action which entails the implementation of recommendations from the reports to correct the deficiencies identified has been lacking.
Another dimension to this whole discussion is the fact that huge resources have been committed to the audit of Nigeria’s extractive industry. Recall the 1999 – 2004 audits undertaken by Harts Groups, another audit for 2005 – 2008 and yet another one for 2009 – 2012, most recently, the 2012 audit. By my calculation and put it mildly also, not less than 1.1 billion Naira “only” may have been committed to undertake NEITI audits in Nigeria. If such reports will only be for the shelf, then the huge resources would have been wasted in a country with a human development index (HDI) value of 0.504 as at 2013— which according to the UNDP Human Development Report, 2014, is in the low human development category—and positioned the country at 152 out of 187 countries and territories.
Good enough, the Federal government of Nigeria has now committed to the implementation of NEITI audit reports. The Vice-President, Yemi Osinbajo was quoted exclusive in the media as saying that the federal government will take all necessary steps to implement the findings and recommendations contained in the audit reports of Nigeria Extractive Industries Transparency Initiative (NEITI). This statement was made on Wednesday June 18, 2015, at the Defence House, Abuja while receiving the chairperson of the global Extractive Industries Transparency Initiative (EITI), Ms. Clare Short, and her delegation.
Be that as it may, there are other issues which the Nigerian government should take seriously, one of such issues that have been canvassed by NEITI and other interest groups is that the Federal Government should review the NEITI Act to incorporate the new EITI standards which will promote more openness and accountability in the Nigeria oil and gas sector and other anomalies which have been noticed in the course of implementing the Act in Nigeria. Again, the Federal Government need to as well beam it searchlight on the Fiscal Allocation and Statutory Disbursement (FASD) audit in all the 36 states and 774 LGAs to reveal how States and Local government Councils are spending their allocations from oil and gas sector.
Importantly, NEITI should make every effort to recover all outstanding amounts owed the country by oil, gas and mining companies. Now that a new administration has been enthroned in Nigeria, especially, considering that anti-corruption was one of the selling points of the administration, Nigerians and even the international community are watching to see how this administration will use NEITI as an instrument to promote greater transparency and accountability in Nigeria’s extractive industry.
Innocent Edemhanria, is programme officer with the Africa Network for Environment and Economic Justice,( ANEEJ).