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NEITI Set to Audit Extractive Industries

31 Dec 2012

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NEITI  

Ndubuisi Francis

The Nigeria Extractive Industries Transparency Initiative (NEITI) is set to commence the Physical Allocations and Statutory Disbursement Audit of the extractive industry from 2007 to 2011 in line with the resolution 0f the Federal Executive Council (FEC) at its meeting of November 28.

The audit would culminate in NEITI signing a contractual agreement with a reputable firm that is to be qualified and selected in a competitive process by the first week of January 2013.

A member of the NEITI Stakeholders Working Group (NSWG), Mrs. Faith Ossai Nwadishi, who revealed this during a media chat yesterday, said the agreement was to ensure that the nine-month timeline set by the Federal Government for the completion of the audit is met, assuring of NEITI’s full support for the impending exercise.

“Like we have indicated earlier, we are prepared for the audit which is part of our statutory mandates in the extractive industry. In line with the FEC decision, we are going to meet the auditors that won the contract early in January to sign the agreement. It is an exercise we are committed to and everything is being done to ensure its success,” she said.

Industry stakeholders, who also spoke on the planned audit of the operations on the oil and gas and solid minerals industries endorsed the initiative but would want government to ensure that the auditors’ final report, particularly its recommendations, are implemented in a way that would justify the time and resources committed to the exercise.

Notable financial expert, Dr. Boniface Chizea, who spoke on the proposed audit and its implications for due process, transparency and accountability in the extractive industry , noted that the exercise appeared to be coming rather late in view of the ugly revelations in the sector over the past two years, adding that the audit would help in correcting the abuses that have characterised the extractive industry in Nigeria

“I think the planned audit is coming rather late in view of what has transpired in the industries over the past years but whatever we can do to clearly demonstrate that Nigeria is committed to creating a new operational template that conform to global best practices in the extractive industries is welcomed,” Chizea said.
Executive Director of the Civil Society Legislative Advocacy Centre (CISLAC), Auwal Ibrahim, advocated in his remarks that the exercise should be given adequate funding and other logistics supports since it is one of the statutory roles the NEITI is established to play.

Ibrahim, while supporting the exercise, however, pointed out that “it is not just about commissioning or giving out the audit to a firm to do the job. What matters is the political will to ensure that the recommendations or outcome of the of the audit is carried out and appropriate sanctions meted out to those who violated any of the financial guidelines.”

Also, a political scientist and analyst, Prof. Abubakar Momoh, said conducting the audit would only serve its purpose if government carries out the recommendations contained in the report, pointing out that “what we have seen over the past years gives no cause for any excitement as past audited reports, including that carried out by the Prof. Philip Asobie-led committee, were never implemented.”

According to him, the issue is not about appointing auditors. It is about implementing the recommendations of such audits.

The purpose of the audit, which is expected to be completed within nine months, in accordance with the provisions of Section 2 of NEITI Act 2007, is to determine how the oil revenues are applied to covered entities such as NDDC, PTDF, CBN including the 13 per cent derivation revenue allocated to some oil producing states and how other monetary and fiscal transactions in the sectors have been conducted or utilised during the period covered by the contract between 2007 and 2011.

Meanwhile, the oil communities in Niger Delta have endorsed the proposed audit.
In a statement issued Sunday  and signed by Chief William Igere representing Delta State, Pastor Macpherson Kurobo of Bayelsa, Princess Nomwen Uhunmwangho of Edo State, Chief Harry Opaks of Rivers, Comrade Samuel Ebiwanno of Ondo, and Saviour James Okon of Akwa-Ibom State, the oil communities endorsed the planned audit of the extractive industries, particularly the oil and gas sub-sector’s 13 per cent derivation statutory disbursements, describing it as a welcome development.

Commending the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) for its position regarding the statutory guidelines for disbursing the 13 per cent derivation fund, the community leaders commended President Goodluck Ebele Jonathan, “for directing the audit of all oil revenues including the 13 per cent Derivation Fund disbursed through the Federation Account to ascertain the utilisation of the fund.
“We also want to thank NEITI for its preparedness to carry out the directive of the President on full audit and investigation of the 13 per cent Derivation Fund early in January 2013”, the statement added.

Tags: Featured, Nigeria, Business, NEITI

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