The Federal Government can ill-afford the continued delay in the implementation of a comprehensive reform in the country’s extractive industries sector, the Executive Secretary, Nigerian Extractive Industries Transparency Initiative, NEITI, Zainab Ahmed, has said.
Mrs. Ahmed, who visited the Kaduna State Governor, Nasir El-Rufai, in his office on Thursday, solicited his support to the push for the speedy implementation of the findings and recommendations contained in the various audit reports so far published by NEITI.
Between 1999 and 2008, NEITI published three audit reports, which showed that the Nigerian government received a total of $269 billion from the oil sector, including $92 billion from oil-specific taxes, $5billion from non-oil-specific taxes from oil companies and $172 billion from sale of government equity oil.
Besides, the Executive Secretary said the reports also showed that Nigeria lost about 160 million barrels of crude oil, valued at $13.7 billion, to crude oil theft from 2009-2012.
“The records were from three international oil companies – Shell Petroleum Development Company (SPDC), Nigerian Agip Oil Company (NAOC) and Chevron Nigeria Limited (CNL),” Mrs. Ahmed said.
Other details from the 2012 NEITI report, she said, showed that Nigeria spent over $7 billion on Joint Venture Cash Calls with international oil companies.
However, Mrs. Ahmed, who lamented that these reports were gathering dust in government shelves for lack of implementation, described issues thrown up in these reports as “unfortunate recurring decimal” that could have been taken care of with proper reforms in the sector.
The NEITI oil and gas sector audit reports for 1999-2012; the Fiscal Allocation and Statutory Disbursement Audit findings and recommendations for 2007-2011, and the solid minerals sector audit for 2007-2012 contained information that further underscores the need for urgent and speedy reforms of the country’s extractive sector.
NEITI’s proposal to the Federal Government, she explained, has been for it to divest its shares in the Joint Ventures, to allow for the incorporation of the Joint Ventures or transition to other types of operating arrangements, like the Production Sharing Contracts, PSCs.
Mrs. Ahmed, who renewed NEITI’s call for a phased removal of the subsidy on petroleum products supply, said over N4.8 trillion was spent by government on subsidy payments alone.
Despite that the scheme was designed to benefit the ordinary Nigerians, Mrs. Ahmed expressed dismay that it had become a huge drain pipe of government revenue by a few privileged individuals engaged in several forms of manipulations and corrupt practices.
She told the Kaduna governor that between 2009 and 2012, Nigeria lost about $1.1 billion to crude oil and product swaps, while Nigeria LNG dividends to the tune of $11.6billion was yet to be remitted to the Federation Account by the Nigerian National Petroleum Corporation, NNPC.
Mrs. Ahmed joined the calls for unbundling the NNPC and commercialization of the new sub business units to free the corporation from regulatory functions, to allow it face the core upstream business.
On NEITI’s recent audit that examined how states disbursed and used revenues accruing to them from their share of the Federation Account allocations, the Executive Secretary told the governor that findings revealed that most states over the years depended on oil revenues, with little or nothing to boost their internally generated revenues.
“The country and the states are over-reliant on oil revenues. They have neglected the huge potentials abundant within. Reports of the nine of the states sampled were shocking. Some of the states have as little as 3 per cent of internally generated revenue. They carry a huge recurrent expenditure and deploy very little to capital and social services like education, health care and security,” Mrs. Ahmed said.
In his response, Mr. El-Rufai pledged to support the EITI process in Nigeria as a global response to fight resource curse, adding that NEITI has remained one of the few government reform institutions still working in line with its mandate.
“We will study the reports and work with NEITI to reform our oil, gas and mining sectors,” the governor said.
He said the NEITI reports would serve as reliable working document for the team set up by the National Economic Council (NEC) to probe the inflows and outflows from the Federation Account.
“All unremitted funds arising from under payments, under assessments and other malpractices uncovered by NEITI in its reports will be recovered and used to improve the country’s infrastructure and living standards of the people,” he assured.
The visit was part of a planned sensitization programme by NEITI for key officers in the new administration on the principles, methods and benefits of Nigeria’s membership of the global Extractive Industries Transparency Initiative.
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