Assessing Nigeria’s Chances At Passing EITI Validation

The Extractive Industries Transparency Initiative (EITI) is a global body which promotes the principles of openness, transparency and accountability in the operations and management of revenue of oil, gas and solid minerals resources by country governments for the benefit of the citizenry.

Nigeria signed up to this initiative in 2003 under the former president, Olusegun Obasanjo, who began implementation in 2004 and became the first country out of 46 nations in the world body to support the process with a specific law, the NEITI Act of 2007.

The Nigeria Extractive Industries Transparency Initiative (NEITI) was set up and funded by the federal government to serve as the countries implementing body, and Nigeria was eventually adjudged an EITI-compliant country in 2013 but is now due for validation in January 2016.

The EITI validation exercise conducted on compliant countries every three years by the global body is a quality assurance mechanism to ascertain the continued level of compliance of member countries to the EITI principles. Government’s political will and commitment to the EITI process, respect to openness and accountability in the management of oil, gas and mining revenues for the benefit of the citizens will be assessed by the validators.

Furthermore, the validation team will consider the NEITI’s frequency in the publication of EITI reports with contextual information that publicly discloses full government revenues receipts from extractive industry, payments by companies in term of taxes, royalties, rents, signature bonuses, amongst others, as well as also assessing the level of compliance by oil, gas and mining companies to NEITI’s implementation. The exercise will equally examine how independent audit reports by the NEITI have helped to promote public debate, access to information, facts and crucial data required by the public for constructive engagement with government and companies in such a manner that leads to reforms capable of bringing about positive changes and impacts in the lives of citizens.

In this regard, the chairman of the civil society’s steering committee, Faith Nwadishi, maintains that the 2016 exercise is coming at a time that the NEITI’s reports have led to aggressive public demand for reforms in the extractive industries. So far the NEITI has published five rounds of audit reports on the oil and gas sector and three rounds of audit report on the solid minerals sector. All of these reports have revealed underpayments of taxes, royalties and signature in most cases as well as recommended more openness and accountability in the sector’s operations.

But the recommendations of the audit reports are given little or no attention by the National Assembly and relevant government agencies even as the remedial issues are far from being implemented. It is in this regard that some experts opine that the validation exercise which is to be conducted by independent international experts to be appointed by the global EITI based in Oslo, Norway, may be a bit difficult for Nigeria to pass.

Meanwhile, a special committee to prepare Nigeria for validation has been set up by the executive secretary of the NEITI, Mrs Zainab Ahmed, while a pre-validation workshop was recently held in Abuja. Ahmed said at the workshop that despite obvious challenges in the EITI implementation, she is positive that the country will scale through validation in view of the extensive work it has done beyond any other EITI implementing country. According to her, government’s integrated management system which is being implemented by the Ministry of Finance and the Accountant General of the Federation, as well as improvement in the federal Inland Revenue Service collection system, are some of the positive gains from the EITI implementation.

“I am very positive that Nigeria will scale through validation; we have done a very extensive amount of work beyond any other EITI implementing country. It is not perfect but where we have shortcomings we have tried the best possible way we can to partly meet requirements,” she said.