By Mohammed Haruna Adamu
With the controversy trailing the indigenous status of Lagos Deep Offshore Logistics Base (LADOL), it is heart-warming that the federal government has resolved to enforce the Extractive Industries Transparency Initiative (EITI’s) guideline on Beneficial Ownership register to reveal the real owners of oil and gas companies operating in Nigeria.
The implementation of EITI’s guidelines will no doubt unmask all the faces behind the masks as far as indigenous and foreign companies operating in Nigeria’s extractive industries are concerned. Indeed, Nigeria has faced the challenges of Illicit Financial Flows (IFFs), due to the scam in contract awards, as well as the opaque nature of the transactions in the country’s oil and gas business. Citing the 2014 Global Financial Integrity Report in his address to the high-level national side-event, President Muhammadu Buhari, had at the sidelines of the 74th United Nations General Assembly (UNGA) in New York last month disclosed that Nigeria lost an estimated $157.5 billion to illicit financial flows between 2003 and 2012. Buhari cited tax avoidance as a major form of illicit financial flow, quoting the Tax Justice Network and the International Monetary Fund report as stating that estimated over $200 billion per year is “being lost by developing countries when multinational enterprises do not pay taxes in the countries where they made the profit. With the opaqueness of the oil and gas business in Nigeria, some companies claim indigenous status, to enjoy all the benefits that accrue to indigenous companies under the Nigerian Local Content Law. However, when it is time to pay tax, they ascribe ownership of their companies to other entities registered in tax havens to avoid payment of tax, thus validating the claim that their companies are not indigenous after all. But with the plan by the federal government to implement EITI initiatives, LADOL and other companies operating in the sector will be forced to disclose all their shareholders, or beneficiaries with effect from December 31, 2019, so as to expose shell companies.
…Adamu, a public policy analyst, writes from Abuja