Nigeria

Nigeria

Recovering revenue and informing extractive sector reforms

Tackling corruption and implementing the wide-ranging recommendations from the NEITI Reports were high amongst the priorities President Muhammadu Buhari campaigned on.

The last NEITI Report highlighted the following:

  • The national oil company owed the government over USD 7bn for domestic crude.
  • The government spent over USD 4bn on fuel subsidies.
  • Domestic crude losses due to oil theft estimated at USD 305m.
  • Royalty and Petroleum Profit Tax was under-assessed by over USD 200m and USD 400m respectively.
  • Poor performance of local refineries (operating at 21% of capacity).

In September 2015, the President appointed himself as the Minister of Petroleum Resources and announced his intention to oversee the recovery of the revenue stolen from the oil sector over the years. In November, President Buhari appointed Emmanuel Ibe Kachikwu, a lawyer with 30-year-experience in energy as Head of Nigeria National Petroleum Corporation (NNPC) for the next five years. There have been several reforms at NNPC.

President Buhari has initiated major reforms in the oil sector, starting with restructuring the national oil company, a review of oil contracts, an end of the notorious oil swap deals, and a review of subsidy arrangements. These were all recommendations from NEITI reports.

 

What’s the point of an oil price of USD 110 if only USD 20 comes into the government coffers? If we block the loopholes, we can end up in the same position with an oil price of USD 30.

Abubakar Bukola Saraki, President of the Nigerian Senate

We are delighted that the much needed political will required to boldly implement the NEITI recommended reforms is now provided, available and accessible under the leadership of President Muhammadu Buhari.

NEITI press release, August 2015 

 

Faces of transparency

In November 2015, Zainab Shamsuna Ahmed was appointed State Minister Budget and Planning. Prior to this, Mrs Ahmed held the position of Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI). With aspirations as a young woman to one day become the Accountant General of her state and possibly of her country, Mrs Ahmed began a career in public service. She served in several accounting and public finance management positions in the Nigerian economy.

A new opportunity arose for Zainab Ahmed in 2010. Her appointment as Executive Secretary of NEITI allowed her to work on issues that were not foreign to her. She had lived in Kaduna and Zaria, home to one of Nigeria’s refineries and mining base in the North.

When asked about the impact of the EITI in Nigeria, Mrs Ahmed responded “the enactment of the NEITI Act 2007 is the singular most enduring impact.

This legislation is leading other reforms in the sector, such as the Petroleum Industry Bill awaiting passage into Law by the National Assembly. NEITI is encouraged that the draft legislation provides for sound policy road map, legal and regulatory frameworks upon which the reforms initiatives in Nigeria’s petroleum industry will be driven.”

Mrs Ahmed highlighted impacts and reforms that have been implemented from NEITI Report recommendations.

“Under my tenure NEITI Reports became a reference material for public demand for transparency, accountability and reforms of the oil and gas as  well as the mining sectors. In addition, the on-going reforms in the NNPC are largely informed by the recommendations contained in NEITI audit reports. This includes the review of the crude oil swaps and oil processing agreements, on-going debate on the subsidy regime, the new directive on Nigerian Liquefied Natural Gas remittances to the federation account.

So far, measurable impacts such as regular reporting, recovery of huge revenues to the tune of over USD 2.4 billion into the Federation account. This was as a result of cases of under-assessment and under- payment in taxes, royalties, signature bonuses, etc. Other impacts include improved stakeholders engagement, effective dissemination of audit reports, gradual implementation of remedial issues, staff trainings and development.”