EITI Validation: How Nigeria attained ‘satisfactory progress’ status

Waziri Adio
Waziri Adio

Nigeria has been credited with exceptional performance in two of the 33 criteria set for the 52 extractive industries transparency initiative (EITI) implementing countries for the attainment of ‘Satisfactory Progress’ status validation.

The Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Waziri Adio, said this on Wednesday in Abuja.

Mr Adio said the country recorded maximum scores in the other 31 criteria and was adjudged qualified to attain the top transparency and accountability validation status.

Out of the 31 requirements, he said Nigeria went beyond expectations in beneficial ownership, distribution of revenues and data accessibility.

According to him, the two areas Nigeria recorded exceptional performances included in-kind revenues management and public debates on transparency and accountability issues.

In-kind revenues cover detail disclosures on volumes either collected or sold and proceeds generated from the state’s share of revenue, with additional information on the terms of sales and buyers of Nigeria’s share of the crude oil production.

On public debate, he said there was an awareness on transparency and accountability issues, as NEITI report was not only comprehensive but also actively promoted and publicly accessible.

Mr Adio was speaking in Abuja on Wednesday at an event to formally announce Nigeria’s attainment of new validation status.

EITI PROCESS

Under the EITI process, implementing countries are required to subject extractive industries’ processes to comprehensive reviews every three years to ascertain their level of compliance and progress towards transparency and accountability.

At the end of every assessment, implementing countries are grouped into four categories, namely either ‘no progress’, ‘inadequate progress’, ‘meaningful progress’ or ‘satisfactory progress.’

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To attain the ultimate status of ‘satisfactory progress’, Mr Adio said implementing countries must undergo rigorous reviews and earn maximum scores from about 33 requirements covering seven operational categories.

These include multi-stakeholders governance oversight, licenses and contracts, monitoring production, revenue collection, revenue allocation, socio-economic contribution, and impact and outcomes.

The broad requirements include engagements with government, industry, civil society; work plan, legal framework, license allocations, license register, policy on contract disclosure, State participation, exploration, production and export data, comprehensiveness of revenue, barter agreements, and transportation revenues.

Others are state-owned, enterprise transactions, direct subnational payments, disaggregation, data timeliness, data quality, revenue management and expenditures, subnational transfers, mandatory social expenditures, SOE quasi-fiscal expenditures, economic contribution, data accessibility.

LATEST VALIDATION RESULT

On February 27, when the validation result was announced, Chair of the EITI Board, Fredrik Reinfeldt, said Nigeria’s implementation of the EITI standard remains in many respects a model for implementing countries globally.

“Apart from its scope, the Nigeria Extractive Industries Transparency Initiative (NEITI) reports have shaped major reforms initiated in the sector, including those by the national oil company, the Nigerian National Petroleum Corporation (NNPC),” he said.

Mr Adio said Nigeria’s first attempt at validation was in July 2017 when the country was adjudged as making ‘meaningful progress.’

At the time, he said the EITI Board identified gaps on 19 specific requirements they recommended for corrective actions to be taken before July 2018 deadline prior to the next validation exercise.

The areas of major concern were on civil society engagement, multi-stakeholder governance, work plan, disclosure on license allocation, license registers, contract disclosure policy, and disclosure on the sale of state participation.

Other areas included quasi-fiscal expenditure, production and export data, barter and infrastructure agreements, transport revenues, sub-national payments and transfers, social expenditure, comprehensiveness of data, data timeliness, data quality and contribution to the economy.

The Executive secretary said steps taken by Nigeria to remedy the identified gaps was the outcome of the latest validation, which gave the country the highest rating in EITI implementation.

The other implementing countries with ‘Satisfactory progress’ validation status are Norway, Colombia, Senegal, Timor-Leste, Mongolia, and the Philippines.

Nigeria is the first and only Anglophone African country to attain the status in implementing all the requirements of the EITI Standard.

MOVE TOWARDS NEXT VALIDATION

Despite the attainment, Mr Adio said the ultimate challenge is to enthrone transparency and accountability in the extractive sector to the extent that revenue resources in the industry contribute visibly to poverty reduction and improved quality of life for Nigerians citizens.

“The challenge now is to ensure these high standards are maintained and sustained in NEITI’s interface with the oil, gas and solid mineral sectors in the discharge of its mandate under the NEITI Act of 2017,” he said.

“For us (NEITI), achieving Satisfactory Progress on EITI Validation is not a destination, it is a journey. And a journey of continuous progress continues. Nigeria will continue to raise the bar in EITI implementation,” he added.

The next round of EITI validation is due in February 2022.

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