Recently, at the 42nd meeting of the board of the Extractive Industries Transparency Initiative (EITI) in Kyiv, Ukraine, Nigeria, was adjudged to have attained ‘satisfactory progress’, which is the highest level of compliance with implementing the EITI’s Standards.
By the achievement Nigeria became one of the seven EITI member countries of its 52 members, to have attained the ranking and the first Anglophone African country to have achieved the feat.
What this means is that; the EITI international secretariat had in July 2018, conducted Validation on Nigeria to assess the countries compliance with implementing the EITI’s Standards. Nigeria was measured against 31 requirements, it passed in all 31 areas, and even achieved beyond the EITI’s requirements in two of the 31 requirements, which are in how extractive issues are publicly debated and in-kind revenue.
Validation is simply an independent evaluation mechanism used by the EITI to assess the level of implementation of its principles of transparency, accountability, poverty reduction and good governance in member countries extractive industries. It is conducted against 33 various indicators including revenue collection and socioeconomic contribution.
To put this into context, of the 52 EITI member countries, 33 have gone through validation against its latest Standard, and only seven has attained satisfactory progress. Nigeria is one of the seven. The EITI validation index has four categories which countries are ranked into, they are; no progress, inadequate progress, meaningful progress and satisfactory progress. There is the also ‘beyond satisfactory progress’ however, but it is not a ranking requirement of the EITI. It is an acknowledgement of countries that has gone beyond the requirements of the EITI. This category is only encouraged by the Initiative and not taken into account in assessing compliance.
The EITI’s Chair, Mr. Fredrik Reinfeldt while speaking of Nigeria’s achievement said “Nigeria’s implementation of the EITI Standard remains in many respects a model for implementing countries globally. Apart from its scope, NEITI reports have shaped major reforms initiated in the sector, including those by the national oil company, NNPC”.
According to the Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Mr. Waziri Adio, which is a bragging right, is capable of attracting investments into the country’s extractive sector and boost the nation’s Gross Domestic Product (GDP).
Adio noted however, that while Nigeria’s attainment of satisfactory progress may not have eliminated all the challenges in the extractives sector, it would impact positively on the country as it will give investors some level of confidence by sending a signal of openness.
While we congratulate Nigeria for this achievement, we believe that more work needs to be done especially with renewed efforts at the passage of the Petroleum Industry Bill (PIB) which have been broken into parts for ease of passage.
There is no gainsaying the leap Nigeria would have recorded in oil sector business had the PIBs been signed into law at a time the country received such recognition and ranking from a global transparency body such as the EITI.
Unfortunately, President Muhammadu Buhari, last year, denied assent to the Petroleum Industry Governance Bill (PIGB), a section of the PIB, citing some controversial clauses.
The PIGB seeks to among others reform the nation’s oil and gas sector by unbundling the NNPC and create a single regulator. It also intends to transform the sectors governance and position it to compete favorably in the global oil industry
Despite the setback, we believe that there is still room to redeem the PIGB before the expiration of the 8th National Assembly. The controversial clauses as identified by the President can urgently be reviewed and the bill assented to before the end of this administration on May 29. Anything short of this would mean that the oil sector reform law which has been in the making for the past 18years will again be inherited by the 9th Assembly and begin a new circle.
Nigeria must appreciate that while it delays the oil sector law, investments are massively being lost to other oil frontiers in the continent because nothing scares away investors as uncertainty. The nation is fast losing its competitiveness to other countries with simpler oil and gas legislation and better business environment.