President Muhammadu Buhari last Tuesday announced a new National Stakeholders Working Group (NSWG) for the Nigeria Extractive Industries Transparency Initiative (NEITI). The NSWG has as its Executive Secretary and Chief Executive, Waziri Adio, a seasoned journalist. Chineme Okafor writes that their job is quite a clear-cut one

Set up in 2004 to help advance the practice of due process, transparency and accountability in payments made by companies operating in Nigeria’s extractive industries as well as receipts of these revenues by the federal government, the Nigeria Extractive Industries Transparency Initiative (NEITI) has since its inauguration remained in touch with its mandate.

From its management interventions via periodic audits and reports of activities of operators in the country’s oil, gas and solid minerals sectors, NEITI has been able to open up for broader debates, chronic issues of underhand dealings in the way Nigeria’s natural resources are mined.

Regularly, NEITI, a national affiliate of the 48-member global Extractive Industries Transparency Initiative (EITI) has reported and put in the public domain how Nigeria has used revenues accruals from her minerals to develop its structures.

Using the EITI framework on standard accountability of natural resources mining, vis-à-vis what the country has gained and lost over the years from the mining of her mineral resources, NEITI has to an extent ignited and pointed the interest of the Nigerian public to what happens in the extractive sectors.

In addition, NEITI has used these principles to deliver some very critical results that promote open and accountable management of Nigeria’s natural resources, strengthen government and company reporting systems, inform public debates on minerals resources mining, as well as enhance the trust quotient between stakeholders in the extractive sphere: countries, companies and civil society.

Immediate Tasks before the New Board

As a matter of resolve, the new board for NEITI which was on Tuesday reconstituted by President Buhari has before it the very first task of seeing that Nigeria retains its status as an implementing and compliant country of the framework.

At the moment, the country stands the risk of being suspended from the framework by the EITI for its failure to meet up with the deadline for the submission and publication of audit reports of activities in her oil and gas industry for 2013.

Because of the decision of the government to disband NEITI’s former NSWG, works on the audit report was halted, meaning that the December 2015 deadline that the EITI gave to the country to submit its findings was missed.

Buhari had dissolved the NEITI board along with other federal boards in October 2015. He had also delayed in constituting a new board to sign off on the audit report which NEITI said was ready.

That delay could result in Nigeria having its EITI-compliance status, which it earned in 2013, suspended. Experts in this regard believe that such suspension could put the country in a bad light before global investors in the extractive industries, notably oil and gas.

According to them, it could suggest that the country is shy of opening its extractive industries operations to standard business transparency and accountability.

EITI, in its condemnation of the development stated that Nigeria may not be fortunate to miss being suspended. It hinged its stance on established tenets which all countries of the movement must abide to.

The Deputy Head and Regional Director for EITI in Africa and Middle East, Eddie Rich, said at a meeting in Abuja that though the reasons advanced by NEITI for missing the deadline were clearly understandable, decisions on the issue would however be guided by extant rules of the EITI.

Rich said at the meeting, with civil societies and the media when the new chair of EITI, Fredrik Reinfeldt, came calling, that: “We have a standard with requirements and rules and that is the currency, that is the power, that is why you value the EITI standard, that is why other countries value it.”

He further added: “So, getting this rare balance between a very understandable real politics issue, you have here in Nigeria and the need for the straight interpretation of the requirements. I can’t say with any confidence which way that is going to go. I have to tell you there is a significant possibility of Nigeria’s suspension and I am sorry to have to say that.”

Rich also explained that if Nigeria is suspended eventually, it has the opportunity of getting the suspension automatically lifted if the audit reports are published within six months.

“But if it fails again, then the country will have to publish the 2014 reports before the suspension can be lifted,” he said, adding that despite EITI’s understanding why Nigeria missed its reporting deadline, it is still an organisation that is guided by rules with standard requirements that has to be enforced.

The new NSWG, which Adio has the mandate to guide as NEITI’s Executive Secretary, would have to make hays while the sun shines to avoid Nigeria’s suspension from the movement.

The EITI believes that natural resources, such as oil, gas, metals and minerals, belong to a country’s citizens, and that its extraction can lead to economic growth and social development, however, when poorly managed, it has too often led to corruption and even conflict.

It thus advocates for more openness around how a country manages its natural resource as an essential measure against possible misuse of these resources.

EITI, in its advocacy, holds out that when these resources are well used, it can benefit all citizens and perhaps subdue instances of social conflicts amongst state parties.

The benefits therein of being a compliant country are multifaceted and they include an improved investment climate for countries through clear signals to investors and international financial institutions that the government is committed to greater transparency.

It also includes the strengthening of accountability and good governance frameworks of countries for all to see the way mining operations are done and revenues paid and used; that way greater economic and political stability is promoted in countries and conflict based around the oil, mining and gas sectors are eventually subdued or avoided.

Also for investors and companies, a compliant country gives less of political and reputational risks which opaque governance and mismanagement of mineral revenues seem to breed.

Another task, which the new board must consider making a priority is the recovery of $18.1 billion unremitted oil and gas revenues from oil and gas companies operating in Nigeria which the NEITI had reported in its past audits.

NEITI said over $7.5 billion, which represents underpayments, under-assessment of taxes, royalties and rents as revealed by several of its independent audit reports, as well as $11.6 billion, which represents outstanding total dividends arising from loans and interest repayments from the federal government’s investment in the Nigerian Liquefied Natural Gas (NLNG) company were still outstanding payments due to Nigeria.

NEITI’s former chief, Hajia Zainab Ahmed, once said that while these monies were still outstanding, issues around their recoveries had not been adequately addressed in the past.

Coming at a time Nigeria’s financial receipts are lean, the recovery of these outstanding monies should be pursued vigorously with the political will and seriousness it deserves. Luckily, the new board has as its chairman, Kayode Fayemi, who as the Minister of Solid Minerals Development, should muscle whatever political weight that is needed in this regard.

Additionally, the board should make good efforts to create and sustain good working relationship with key stakeholders. It is through this that seamless communication on operational requests could be adequately guaranteed especially considering the tendencies of covered entities to deny NEITI information needed for its audit activities.

Again, strengthening the input of the Inter-ministerial Task Team (IMTT) and getting the National Assembly to deliberate on the findings of NEITI reports as demanded in the Act establishing the agency would add some tinge of flavour to the remedial job that NEITI does. After all, it is on the audit findings of NEITI that the legislators mostly rely for probe of activities in the country’s oil and gas sector.

Nothing therefore stops it from holding a legislative deliberation on every audit reports of NEITI. The benefits of such action are far-reaching in both policy and political context.