REMTRACK: A Tool For Public Accountability In Nigeria’s Oil, Gas And Mining Reforms (Part 1)
By Obiageli Onuorah
For over five decades, Nigeria has relied on its oil and gas sector for its major foreign exchange and revenue earnings. Environmental degradation, loss of livelihoods, strange diseases, lack of portable water etc., unfortunately, instead became the lot of the citizens in the host communities who wondered what went wrong in the midst of so much prospects, hopes and now, dashed dreams.
Since the discovery of oil in 1956, Nigeria has not transmuted to the El Dorado as other equally natural resources endowed countries such as Saudi Arabia, United Arab Emirates etc. It is an irony that the once mainstay of the nation’s economy has become its curse.
According to the organisation of the Petroleum Exporting Countries (OPEC), “Nigeria currently has the world’s 10th largest crude oil reserves and is the world’s 13th-largest producer of crude oil”. Yet, it is the only oil producing nation that has no functional refinery, despite having four refineries under the watch of the country’s, Nigeria National Petroleum Company Ltd (NNPCL). The import of refined petroleum products (Petrol, Kerosine and Diesel) highlights these shortcomings. Nigeria’s four refineries are moribund and have defied the law of Turnaround Maintenance (TAM) for over a quarter of a century. It is also on record that these refineries have gulped several billions of dollars.
Then, a Nigerian and the richest man in Africa, Aliko Dangote built the largest individually owned refinery in the world with the latest technological installations and manpower assemblage. However, news surrounding the principal actors in the Dangote Refinery has left citizens disappointed. Despite the Federal Government’s intervention, including moving the sale of crude to the Dangote Refinery from dollars, to Naira denominated currency, the controversies seem unending.
Very recently, the media was awash with stories of a non-governmental group under the Nigeria Coalition of Civil Society Organisations (NICOCSO) storming the National Assembly demanding for an end to the planned importation of 1.6billion litres of petrol (PMS) in to the country by the NNPCL.
But this article is not about Dangote refinery. The reference is to show how helpless the citizens feel and are when they get entangled in the web of Nigeria’s oil, gas and solid minerals sector management, and the need for their robust participation in driving policy reforms in the sector.
NEITI’s Mandate
The Nigerian Extractive Industries Transparency Initiative (NEITI), a national Chapter of the global Extractive Industries Transparency Initiative (EITI) and a coalition of civil society, government and industry operators was established in 2004, in the context of the comprehensive socio-economic reform programme embarked upon up by the Federal Government. The reform programme was enshrined in the National Economic Empowerment Development Strategy (NEEDS) hinged on improving Nigeria’s macro-economic environment; pursuing structural reforms; strengthening public expenditure management; and implementing institutional and governance reforms.
NEITI’s mandate as set out in its establishment Act include to ensure due process, transparency, accountability and zero corruption in the determination, payments, and receipts of all government revenue accruing from the extractive sectors and in the application of the resources for national development.
The major reasons for Nigeria’s joining the EITI were to promote prudent and accountable management of revenues from the country’s abundant natural resources, reduce poverty and ensure sustainable development. NEITI carries out its mandate by conducting, publishing and disseminating annual independent reports of Nigeria’s oil, gas and mining industries with the ultimate goal of facilitating the good governance of Nigeria’s extractive sector and ensure that it is managed for the benefit of Nigerians.
NEITI seeks to achieve its mandate via three work routes- Reporting, Dissemination, and Remediation. The NEITI industry reports usually make profound revelations by identifying several processes and governance lapses in the sector while offering appropriate recommendations on how to fix identified challenges.
For instance, figures from the latest NEITI industry reports of the oil and gas sector covering 2022-2023 revealed that Nigeria earned between 1999-2023 (25years), a total of $831 billion. The NEITI report also showed that there is still an outstanding collectible revenue of over $6 billion due to the Federal Government as of June 2024. Meanwhile, just last week, the National Assembly approved the borrowing of $2.2 billion (N1.7 trillion) to enable government fund its budget. These potential revenues come at a time when government is borrowing about a third of this figure to fund its infrastructure projects, secure lives and property of the citizens, but most importantly create opportunities for its 230 million people to feed.
Similarly, the NEITI reports over the years have revealed the volume of crude lost to theft, vandalism and other operational inefficiencies. The reports have gone ahead to also put value to these figures and what it could contribute towards improving the life of the average Nigerian. The story from the solid minerals sector is more saddening. In 18years, the sector just posted the trillion Naira revenue contribution to the Nigerian economy with a GDP contribution of less than 1% despite the huge minerals deposit straddling every belt, region and state in the country.
The sector is also known to be dominated by artisanal miners and is still exporting ores and other minerals in their raw forms (Free on Board), consequently exporting jobs meant for Nigerian youths to other climes.
By providing a seamless and efficient transparency and accountability corridor, NEITI promotes prudent management of the country’s revenue and supports government domestic revenue mobilisation. From inception, the EITI/NEITI process was conceived along the three constituent groups – government, companies and civil society. Of the three, only the civil society is not profit minded and directly represents the interest of the citizens.
Built on this tripod, government is to receive rent from Nigeria’s resource endowments and manage same on behalf of the citizens. Companies on the other hand make investments that will yield returns. NEITI, thus is a vital vehicle for the purposes of empowering citizens and stakeholders with accurate and verifiable information about the country’s natural resources and management.
To make the NEITI/EITI process more impactful, citizens are expected to use the NEITI reports to stimulate debates and engage the companies and government agencies involved in managing the country’s natural resources with the ultimate goal of holding them accountable.
NEITI has deployed the use of traditional media (Newspapers, Radio and Television) to communicate and disseminate information contained in its reports. It has also broadened and expanded the reach of its dissemination efforts by using the social media and other digital platforms for communication.
The EITI/NEITI process therefore expects that through the civil society, the citizens will get a seat at the table and participate in the decision-making processes and management of the country’s resource wealth. In the past two decades of the EITI in Nigeria, the civil society have played in this space, but not so effectively. The third sector has also sought ways to bridge the gap in the NEITI reports, by creating ingenious ways to track the implementation of the report recommendations. One of these innovations is the REMTRACK APP. (To be continued)
Obiageli Onuorah is the Acting Director, Communication and Stakeholders Management at the Nigeria Extractive Industries Transparency Initiative (NEITI). She can be contacted via [email protected]
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