•Delegation raises questions over opacity in forward sales of Nigeria’s oil
•Wants NNPC to disclose full text of oil, gas contracts
Emmanuel Addeh in Abuja
The Extractive Industries Transparency Initiative (EITI), the global standard in the promotion of open management of oil, gas and other mineral resources, yesterday blamed Nigeria’s incessant dissolution of the board of its Nigerian branch for its moderate transparency score in its latest ranking of member countries.
A delegation from the Oslo, Norway-based organisation, which is currently in the country, told journalists in Abuja that the frequent disruption of the activities of the board as well as the refusal of state-owned oil company to make full disclosure in its forward oil sales and other contracts also negatively affected Nigeria’s position.
In 2003, under the Olusegun Obasanjo administration, Nigeria voluntarily signed up to the global initiative as part of the comprehensive socio-economic reform programme, eventually setting up the Nigerian Extractive Industries Transparency Initiative (NEITI).
Some members of the EITI delegation who are currently in Nigeria to meet with stakeholders include: EITI’s Deputy Executive Director, Bady Baldé; Technical Director, Alex Gordy and Regional Director, Anglophone and Lusophone Africa, Gilbert Makore.
While acknowledging that some progress had been made, the organisation which recently ranked Nigeria 72 per cent (moderate) in its assessment covering 2019 to 2022, said its officials were in the country to convey the outcome, explain the main findings and highlight areas of improvement on the assessment to stakeholders.
Deputy Executive Director, Baldé said that though the “validation” was not a “pass or fail exam”, it was to assess the extent to which member countries are adhering to the EITI principles requirements that they subscribed to.
“Going back to the NEITI Act of 2007, it establishes an independent entity that is supposed to function in a multi-stakeholder (board) nature that supervises implementation in the country.
“Unfortunately, that entity has not functioned as intended in the last three years or so. And that is in part due to a vacancy and extended period of vacancy of the multi-stakeholder board itself, which is supposed to oversee the implementation here in Nigeria.
“So, this was highlighted as a significant area of concern, because multi-stakeholder is at the core of the EITI process. So it’s important that institutions that were foreseen there are functioning adequately. So that vacancy was one issues of concern that that led to this mission,” he added.
The NEITI board was one of the boards dissolved last year by President Bola Tinubu. He has since then not set up a new multi-stakeholder board to oversee the activities of NEITI.
He stated that there was the need for improvement in some areas in the newer aspects of the standards such as the requirement to disclose the full text of contracts and licences in the mining, oil and gas sectors.
“The validation found that key contracts, particularly in the oil and gas sector, remain not publicly accessible,” he stressed.
The Technical Director, Gordy, said there were still questions over the full disclosure on some deals, including the sale of future oil to offset debts by Nigeria, among others.
“A final issue I’d like to highlight is the issue of resource-backed loans, pledging of future oil production in repayment of various types of loans, what I believe is termed forward sales in some scenarios in Nigeria.
“And there are a number of these different resource-backed loans, ranging from the likes of Project Eagle, and Project Cheetah but also NNPC acquiring an equity interest in the new Dangote refinery.
“And there remains much to be done in terms of clarifying the terms of those agreements…the terms of those agreements remain unclear, and therefore it is not clear to the Nigerian citizens how much of future oil production has effectively been pledged to service those arrangements,” he said.
A number of questions, he said, still remain around other transactions, including the over N3 billion AfreximBank oil-for-debt loan.
According to him, the fundamental objective of the disclosures is to inform the public of whether it is a fair deal or whether it’s in line with prevailing market conditions or whether there is something to have to explain.
EITI’s Regional Director, Makore also added his voice on the need to quickly reconstitute the NEITI board, stressing that there was an 18 month delay in reconstituting the previous board, while the current one dissolved in June 2023 is yet to be to be reconstituted.
Executive Secretary, NEITI, Dr Ogbonnaya Orji, in his remarks, lauded the support of EITI, noting that the whole essence of the validation process was to locate areas that need improvement.
He pledged to consolidate on the areas of strength of the country, expressing the hope that the delegation’s meeting with the stakeholders, including government officials, will further help push the objectives of EITI forward, which are transparency and accountability in the sector to the benefit of citizens.
