The delay in reconstituting the National Stakeholders Working Group (NSWG) of the Nigerian Extractive Industries Transparency Initiative (NEITI) is delaying the approval and release of the 2021 annual extractive industry audit reports.
Although the audit exercises conducted by two independent administrators, namely Messrs Taju Audu & Co. for the oil and gas sector, and Amedu Onekpe & Co. for the Solid Minerals Sector, have since been completed, consideration and approval of the two reports have not been possible due the absence of the Board of the transparency and accountability agency to give the mandatory approval.
Under the global Extractive Industry Transparency Initiative (EITI) standard, which requires a multi-stakeholders group approach to decisions, the highest policy making body authorised to oversee and provide guidance to the EITI reporting process and implementation in member-countries is the Board.
In Nigeria, which is a signatory to the EITI principles, the NSWG, also known as the Board, is the highest body empowered to provide guidance to all policy decisions and implementation of the EITI process in the extractive industry.
However, with the decision of the President Bola Tinubu Federal Government to dissolve the Boards of all ministries, departments and agencies in the country on June 19, 2023, NEITI has been operating without a Board to consider and approve all its policies and programmes, including the annual audit reports.
Considering that the long delay in releasing the report could result in Nigeria being sanctioned by the EITI for not meeting the stipulated deadline, a stakeholders’ consultative roundtable was convened on Wednesday by the NEITI Executive Secretary, Orji Ogbonnaya Orji, to review and approve the audit reports.
Although Orji, who served as the Secretary of the NSWG, is the only surviving member of the defunct Board by virtue of his status and classification as a technocrat, and not a political appointee, the law does not allow him to act alone in taking key policy decisions concerning NEITI.
Consequemrly, the roundtable held at the NEITI House, Abuja, was convened to allow representatives of companies operating in the extractive industry, civil society organisations involved in the implementation of the EITI process in the extractive sector, and government agencies to review and approve the reports.
In his speech at the meeting, Orji said the roundtable was convened after extensive consultations with the international Secretariat of the EITI, which approved the invitation of the stakeholders to review, deliberate and approve the reports.
Recalling a similar situation in 2017, Orji said the publication of the 2019 Industry Reports were affected by the dissolution of the NEITI Board by the government, resulting the global EITI granting Nigeria waiver and approval to convene a multi-stakeholder roundtable to review and approve the release of the reports.
The NEITI Chief said consultations with the relevant government agencies were currently ongoing for a speedy resolution of the issue surrounding the fate of the NSWG.
Some civil society groups at the meeting canvassed the view that the government should consider an exemption for NEITI Board from dissolution before the expiration of its tenure to avoid Nigeria being exposed to sanctions by the international body for not meeting its reporting deadline.
Highlights of the 2021 Industry Report, he said, showed that a total of 69 oil, gas and mining companies, 12 government agencies and one state-owned enterprise were covered in the oil and gas audit, while 1214 companies with three government agencies were covered in the solid minerals sector audit.
Orji said the audit sought to establish the qualities of minerals produced, and urilised in the country as well as establish the revenue by oil, gas and mining companies and how much of such revenues were actually received into government coffers.
Other areas of focus by the audit. Orji said, were to identify investments by the Federation, or the government in the oil, gas and mining industries, track the fuel subsidy payments, and company remittances and liabilities.
The audit exercise, which is the 13th in the cycle of reconciliatory reports in the oil and gas sector as well as 11th cycle in the solid minerals sector, revealed that the Federal Government realised over $741.5bn from the oil and gas sector between 1999 and 2020, and N635bn from the solid minerals sector between 2006 and 2020.
In addition, the audit revealed that the country lost over 619.7 million barrels of crude oil valued at a out $46.16bn, or N16. 25trn. between 2009 and 2020 as a result of crude oil theft as well as a loss of over 140,000 barrels of crude oil worth over $10.7mn daily due to sabotage of oil facilities.
On subsidy, Orji said the NEITI Audit also found that fuel subsidy payments between 2005 and 2021 had huge consequences on the nation’s economy, with over $74.39bn or about N13. 7trn. spent, translating to N805.7bn annually, N67.1bn monthly and N2.2bn daily.
When approvedi, the 2020/2021 would include the oil, gas and mining reports as well as the Fiscal Allocation and Statutory Dis ursements Report.
Other considerations during the stakeholders roundtable included approval for the commencement of the process to conduct the 2022-2023 Industry Reports in the oil, gas and mining sector; commissioning of the study to determine the quantity of premium motor spirit (PMS) consumption and utilisation of the 13 percent derivation in the country.
