A Review of the Nigerian Energy Industry

Again, FG commits to implementation of NEITI reports

18 June 2015, Abuja – Vice-President Yemi Osinbajo has restated that the federal government will take all necessary steps to implement the findings and recommendations contained in the audit reports of Nigeria Extractive Industries Transparency Initiative (NEITI).

Vice President Yemi Osinbajo

Osinbajo made the pledge wednesday while receiving the chairperson of the global Extractive Industries Transparency Initiative (EITI), Ms. Clare Short, and her delegation at the Defence House, Abuja.

NEITI’s Director of Communications, Dr. Orji Ogbonnaya Orji, who confirmed this in a statement, noted that the vice-president reaffirmed the federal government’s commitment to the implementation of the EITI principles as part of plans to reform the oil and gas sector.

Osinbajo commended NEITI for its courage, diligence and commitment to good corporate governance in the oil and gas and mining industries.

He said the federal government would carefully study the reports with a view to ensuring that the findings and recommendations guide government actions on the reforms.

Also speaking, Short advised the government to consider a major shake-up of the oil and gas industry if the benefits from Nigeria’s abundant resources are to be felt by all Nigerians.

“The NEITI reports have all the information and data that will guide the government to reform the industry. It is also important that the government integrates NEITI into its overall economic policy team,” Short was quoted as saying.

Also, in her briefing to State House correspondents after her meeting with Osinbajo, Short expressed regrets over the non-implementation of the reforms advocated by NEITI.

According to her, the federal government should as a matter of urgency start the implementation of the suggestions in the various audit reports of NEITI.

She said her visit was aimed at pushing for reforms in the oil and gas mining industries, particularly now that the country has a new government.

Short bemoaned corrupt practices in Nigeria’s oil sector, expressing optimism that the present government would implement some of the suggested reforms in the sector.

She stressed that it behoves EITI to ensure compliance with the agreement entered by EITI member states to maintain transparency.
She added that her meeting with the vice-president was targeted at forming a common front with the Nigerian government with a view to ensuring transparency within the extractives sector.

In his remarks, the Chairman of NEITI, Mr. Ledum Mitee, appealed to the government to overhaul the Inter-ministerial Task Team (IMTT) set up to implement NEITI reports, contending that the team had recorded very little progress.
He said the oil and gas sector had suffered setbacks and lost several billions of naira accruing to the federation, noting that lack of political will to implement the findings and recommendations of NEITI’s audit reports was responsible for both the setback and the losses.

Mitee said the reports blew open several cases of mismanagement, under-payment of taxes and royalties, underassessment of operational processes as well as other lapses.

The advocated reforms, he said, if implemented, would in no small measure assist in sanitising the sector, as well as act as a catalyst to national development.

On her part, the Executive Secretary of NEITI, Mrs. Zainab Shamsuna Ahmed, urged the government to take urgent steps to divest Nigeria’s interest in the oil joint venture (JV) operations to free the country from huge burden imposed by JV obligations.

Ahmed also advised the government to critically examine the management of domestic crude allocations, consider the removal of oil subsidy, abrogation of the oil swap arrangement, and take urgent steps to recover huge sums that are outstanding in the hands of companies as a result of underpayments, underassessment of taxes, rents and royalties.

She expressed optimism that the Buhari administration would provide the necessary political will to enable NEITI recover an outstanding $7.4 billion into government coffers to support national development.

Nigeria joined the global EITI in 2003 and began implementation in 2004 and supported same with the enactment of a law in 2007.
The NEITI audit reports between 1999 and 2011 have revealed a total revenue loss of $9.8 billion to the federation. This loss is as a result of underpayments, underassessment of taxes, rents, royalties and other process lapses.

Of the $9.8 billion, NEITI working with other agencies, has recovered $2.4 billion. The breakdown of the recoveries shows that $1 billion was recovered from 1999 to 2004 audit reports, $550 million was recovered from the NEITI audit reports of 2005 and 2006, the 2008 audit report led to a recovery of $447 million, while NEITI reports of 2009 to 2011 resulted in a recovery of $416 million.

Short’s stance is seen as a global endorsement of President Muhammadu Buhari’s commitment to good governance, transparency and accountability, which are consistent with the principles professed by the EITI.

During her three-day visit, Short will meet with the Inter-ministerial Task Team set up by the federal government to implement the findings and recommendations contained in the NEITI audit reports.

– This Day

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