The immediate recovery of accumulated liabilities by operating companies and entities in the oil and gas industry could significantly impact efforts by the government to cut the deficit in the budget and ensure overall growth in the country’s economy, the Nigerian Extractive Industries Transparency Initiative (NEITI) has said.
In its 2023 Oil and Gas Industry Audit Report published in September 2024, NEITI disclosed that a total of $6.175bn and N66.378bn were liabilities out of $8.26bn recorded in its 2021 report as total recoveries from covered entities in the various industry audits conducted between 1999 and 2023.
Out of the amount, the Executive Secretary of NEITI, Orji Ogbonnaya Orji, disclosed that over $4.85bn has so far been recovered by the government.
Speaking in Abuja on Friday while presenting an update on the implementation of the EITI in Nigeria, Orji said although a significant decline was observed in the total liabilities by the covered entities as contained in the 2023 report over the 2021 edition, more efforts should be directed by the relevant agencies to recover this amount.
Orji said NEITI was worried that this amount was still outstanding at a time the government was expected to find huge resources to fund the growing deficit in its 2025 budget.
An analysis of how these liabilities could support the federal government’s domestic revenue mobilization efforts if recovered, Orji said when converted at the average exchange rate of N1,500 to the dollar, the amount would translate to about N9.33 trillion.
“The sum is more than the federal government’s total budget for health, education, agriculture and food security which totalled about N8.73 trillion,” he said.
“Further analysis shows that the sum is also more than the total budget for national security at N6.11trillion, health at N2.48 trillion and social welfare of N724billion, all put together.
“The liabilities can also knock off about 72% of the federal government’s budget deficit of N13trillion for 2025,” he added.
Urging the relevant agencies responsible for collecting these revenues to step up efforts and do the needful, Orji said this would go a long way to support governments at all levels to provide the much-needed infrastructure for the good of the people.
The NEITI Executive Secretary who spoke extensively on the achievements of the agency under the EITI, said although a lot of progress was made so far, there were still lingering challenges such as institutional constraints, funding limitations, and resistance to change.
He unveiled plans to broaden the template of the annual audit to cover divestment of assets by multinational oil and gas industry, forward sales of oil and gas assets, and environmental remediation.
To achieve this goal, Orji said NEITI was developing a framework and template for reporting divestments, adding this would strengthen transparency and accountability of divestments in national oil and gas sector.
On Beneficial Ownership, he said although current data were up-to-date as at 2023, more work was needed to deepen engagements and public disclosures on companies acquiring divested assets.
He called for collective efforts from the media, civil society, and other industry stakeholders to monitor the prudent management of the country’s oil, gas, and mining revenues for the benefit of all Nigerians.
“Transparency is not just a policy, it is a responsibility. NEITI remains steadfast in ensuring that Nigeria’s extractive revenues are accounted for and utilized effectively,” Orji said.
He used the occasion to announced that plans were on course to ensure the publication of the 2024 NEITI Audit Reporr on or before October this year.
