By Patrick Andrew Abuja
Th e Natural Resources Governance Institute (NRGI) report says that Nigeria’s oil and gas and mining sectors as among the most dense in the world. Th e independent non-profi t organisation report also ranked Nigeria 55 out of 89 countries whose viability of their extractive industries policies and practices are assessed. Th e report, which was published Wednesday particularly scored the Nigeria low in the area of licensing noting that the Nigerian government rarely discloses “government offi cials’ fi nancial interest in the extractive sector or identities of benefi cial owners of extractive companies.” In the report, Nigeria is placed 77 out of the 89 countries reviewed in the assessment of licensing and scored 17 out of 100.
However, it noted that although the federal government has made commitment with the Extractive Industries Transparency Initiative (EITI) and the Open Government Partnership (OGP), it is yet to disclose details of contracts in oil, gas and mining contracts in its “Seven Big Wins” strategy. Th e RGI noted that though there have been improved transparency in the area of collection of revenue in the last fi ve years, tracking payment made by oil and gas companies have been challenging. “According to Nigeria’s 2014 EITI data, just over half of public revenues from oil and gas were distributed to the federal government and the rest were shared between the state and local governments.
“Th e public lacks access to audited information on revenue fl ows to lower levels of government, and this contributes to the gap between the quality of the legal framework and actual implementation,” the report stated. Also, the report says accountability and transparency remain huge challenge to the Nigerian National Petroleum Corporation (NNPC) which it gave a poor governance rating score of 44 out of 100. Th ough the report thumbed up for the corporation in areas of transfers to government and production volume disclosure, but said it performed poorly in otherareas such as details of its annual reports.
“Little information is publicly available, particularly concerning some of NNPC’s least effi cient and most questionable activities, notably earnings by its subsidiaries, the costs of its operations and its signifi cant spending on non-commercial activities. “Government agencies and external auditors have disputed NNPC’s interpretation of rules set in the constitution and the NNPC Act governing monetary transfers between NNPC and the government. “Offi cials exercise signifi cant discretion around how NNPC sells the government’s share of oil production—for example, when selecting buyers, pricing exports or transferring sales proceeds to the government,” the report noted. Further, it scored Nigeria low in the management and governance of the Excess Crude Account (ECA), ranking last alongside Qatar of all the countries assessed.
It observed that the Nigerian government does not disclose the rules and practices governing deposits and withdrawal or investments of the ECA. “As the largest fund by asset balance, the ECA constitutes a vast governance concern at the end of the oil sector value chain,” it noted. Th e NRGI points people to the benefi ts of their countries’ oil, gas and mineral wealth through research, capacity development, technical advice and advocacy.
