GAUGING THE DRIVER OF TRANSPARENCY

NEITI is doing well, but could do more,

The Nigeria Extractive Industries Transparency Initiative (NEITI) has done great work since inception. In its 2014 Report, it highlighted a wide range of activities and achievements. The feather in its cap is its endorsement by Extractive Industries Transparency Initiative (EITI) as the best EITI implementing country in 2013. That came from assiduous work put into the implementation of a four-year strategic plan (SP) for 2012-2016 to be achieved under three distinct goals: the achievement of an operational excellence in regulation and enforcement across the extractive industries. Under this goal, NEITI seeks to develop an effective framework for the delivery of effective audit, continuous monitoring and evaluation, stronger regulation, enforcement and compliance management. NEITI also seeks to attain optimum stakeholder development in extractive industries transparency and accountability. To its credit, NEITI has developed a healthy multi-stakeholder communication and mobilisation framework for effective stakeholder relationship management, collaboration and cooperation, and has connected this with its third goal of developing organisational and funding capacity to drive its mandate, vision and strategy.

If you look at the 2014 Report a little closer, what you find is a sequence of activities and advocacy visits. This is good. Activities and advocacy visits targeted at state and non-state actors is usually the lifeblood of responsible organisations like the NEITI. The body organised meetings with key civil society and the media, the legislature, government executives, opinion and community leaders. It has organised workshops and capacity building programmes geared towards the achievement of its core objectives like the support for the on-going anti-corruption war and the report on extractive sector audits in line with the NEITI Act and the EITI standard. NEITI has also been up to date with the production of its reports and has met some standards set by the EITI parent body. Around August-September of 2015, major reforms initiated by the Buhari administration were based on recommendations from NEITI reports. It can also be argued that issues of beneficial ownership, improvement in the conduct of the extractive industry in Nigeria and the expose on the weaknesses in the sector are products of the work of NEITI.

But how much further NEITI can push beyond these activities, meetings and capacity building seminars and advocacy visits is the real question. These meetings have taken place, the seminars and workshops have been used to bring stakeholders together, and beautiful reports have been released. I have just highlighted the fact that Mr. President initiated the reforms in the oil and gas sector from reports garnered from the meticulous work done by the NEITI. But should it stop there? What if there is a president who is unwilling to initiate reforms from NEITI reports and audits talk less of implementing them? There was a meeting between the NEITI national stakeholders working group with former President Goodluck Jonathan. At that meeting in 2013, the NEITI 2014 Report quoted the Secretary to the Government of the Federation to the Jonathan administration as saying that Mr. President fully supports and endorses regular NEITI audits and prompt implementation of remedial issues.

But just three years after that meeting, NEITI has accused the Nigerian National Petroleum Corporation (NNPC) of not remitting $3.8 billion and N358 billion in 2013. There was another $12.9 billion said to be funds received from the Nigerian Liquefied Natural Gas, NLNG, from 2005 to 2013. After the NNPC fired back and said that it received permission from Mr. President to spend some of the funds it received (Vanguard, June 15 2016) from accruals from the NGLG, another report was carried by THISDAY, December 31, 2016, that unremitted NGLG earnings with the NNPC was about $15.8 billion.

Nigeria has satisfactorily met the EITI board validation in several sectors. An EITI board validation decision on Nigeria on January 11, 2017 highlighted government engagement, data exploration distribution of extractive revenues including follow up recommendations as some of the ways that NEITI has fairly good record of performance. But the board cited 19 core areas – civil society engagement, MSG governance, state participation, direct subnational payments, mandatory social expenditures – as among the areas wherein Nigeria is lagging. Next year July 11, 2018, the EITI will conduct a second validation to review whether Nigeria has taken to heart the ‘corrective actions’ it proposed to Nigeria. If Nigeria has not by then, we stand the risk of an outright suspension ‘in accordance with the EITI standard’. Azerbaijan has already been yanked from ‘compliant’ to ‘candidate’ status because they did not abide by the EITI ‘corrective actions’.

Most countries complying with the EITI standards follow three key components: disclosure of revenues is always done by commodity and revenue type and these disclosures cannot be challenged. This is because they operate a very comprehensive web-based data portal of this disclosure of commodity and revenue type. Lastly, they mainstream all of this into the national action plan which their governments presented through the open government partnership (OGP).

One of those countries which had carried out their extractive roles in this manner reported a record of accruals reconciled to the tune of $8.5billion. Of the 45 which that country dealt with, 12 of them reported $190 million in corporate taxes. That country in 2013 reported revenue of $12.64 billion. It that year also, it reported a remittance of $11.8 billion in income tax receipts from mining and petroleum and coal products manufacturing companies. Following this example may help NEITI position as a veritable driver for open governance and transparency in Nigeria.