New report indicts Nigeria for mismanaging oil wealth

15 May 2013, Houston Diezani-Alison-Madueke– Over 80 percent of the world’s major oil and gas-producing and mining countries fail to meet “satisfactory standards” for managing their natural resources, according to a new report that tracks resource mismanagement and corruption.

New York-based Revenue Watch Institute released its Resource Governance Index on Wednesday, which scores and ranks 58 countries according to transparency and accountability in their oil, gas and mining sectors, Reuters reports.

The index cited as an example Nigeria, whose oil revenues were 60 percent higher than total international aid to sub-Saharan Africa in 2011, according to Reuters.

Revenue Watch also highlights that despite being strong allies of the United States, which ranks second behind Norway, countries like Saudi Arabia and Afghanistan rank 48th and 49th respectively in the rankings.

“Countries like Canada, the U.S. and Australia also need to ensure their multinational companies do not facilitate the opacity found in many countries where they operate,” said Daniel Kaufmann, president of Revenue Watch.

Reuters reports that the index, which will be released annually from this year, is designed to help commodity-rich countries avoid the so-called “resource curse”, in which their economies grow only slowly due to poor institutional oversight.

“The lives of over a billion citizens could be transformed if their governments managed their oil, gas and minerals in a more open, accountable manner,” Revenue Watch said in a media release.

The index scores countries on a scale of 1 to 100, with Norway ranking as the top performer on governance with 98 and Myanmar placing worst with a score of 4.

Countries are judged on four factors: legal framework, transparency levels, government checks and balances, and governance.

Only 11 of the 58 countries scored above the “satisfactory” score of 70, according to the index.

“More than half the sample, 32 countries, do not meet even basic standards of resource governance, performing weakly or even failing,” the report says.

The worst performing countries on the index rely almost exclusively on natural resources as their main source of income, according to Revenue Watch.

If their governments were to improve the way they manage these resources, it would make a significant difference in their economic development.

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