The Minister of Petroleum, President Buhari has failed to disclose about 11.43 Trillion naira remittances made by international oil and gas companies between 2014 and 2018. An analysis by DATAPHYTE has shown that at least $37.46 billion has been remitted by oil and gas companies from Europe and Canada to government entities in Nigeria. The proceeds between 2014 and 2018 convert to ₦11,425,208,946,053 at an exchange rate of ₦305 to $1.
Of this sum, $19,381,701,398.83 was for production entitlements; $12,600,576,100.20 was paid as taxes; $2,866,130,968.17 was paid as royalties; $2,383,231,773.16 was paid as fees; and $228,061,222.11 was remitted for infrastructure improvement. In 2014 alone, $872,943,667.18 was remitted to the different entities of government. This figured increased by about 705% in 2015.
A drop of 1.6% was experienced in 2016 with a total remittance being $6,913,878,700.43. The annual remittance figure by these oil and gas companies grew by 34% and 44% in 2017 and 2018 respectively.
Despite different open disclosure regimes for Nigeria’s extractive sector, these three public institutions that received most of the remittances failed to publish the details of these monetary exchanges. Rather, the data was compiled from the website of an accountability initiative known as the Paradigm Leadership Support Initiative.
In spite of this, the available figures only account for remittances from Europe and Canada and do not include other foreign and local payments. This is amidst several accusations that President Buhari’s administration is selective in its efforts towards transparency and accountability. Some stakeholders in the extractive sector expected that President Buhari’s self-appointment as the Minister of Petroleum would translate to an increased level of openness within the sector.
Dr. Dauda Garuba, an extractive sector expert, affirms that “Nigerian government can be transparent and structure oil and gas remittances to reflect the different production and business arrangements, also, they should be amenable to disaggregated receipt of such payments according to where they come from”.
Table 1 below present the total remittance received by the different government institutions in Nigeria between 2014 and 2018. About 96% of all the remittances were received by the Nigerian National Petroleum Commission, the Federal Inland Revenue Services, and the Department for Petroleum Resources each of which received 56.87%, 25.45%, and 13.71% respectively.
Table 1: Oil and Gas Remittances from Canada and Europe to Government Entities in Nigeria
The failure of Buhari’s government to provide deliberate leadership for the oil and gas sector, is worrisome. In several ways, the oil and gas sector powers other sectors in the country. Activities in the oil and gas sector also bear on security, agriculture, education and even political transitions through elections. In addition, many public projects in Nigeria are funded with oil revenue. Thus, transparency in the sector is both crucial and expected.
Amidst the various extractive sector transparency initiatives in Nigeria, the country’s oil and gas sector has not witnessed sufficient openness and accountability. In 2016, Nigeria signed to the OGP agreement that was adopted by world leaders and civil society groups in 2011. Among other things, the agreement aims to secure concrete commitments from national and subnational governments to promote open government, empower citizens, fight corruption, and harness new technologies to strengthen governance. Similar to this is Nigeria’s Freedom of Information Act that was passed in 2011 and Nigeria’s voluntary assent to the Extractive Industries Transparency Initiative in 2003. Ordinarily, these arrangements should have created more openness and transparency in the extractive sector but the Nigerian government has not sufficiently provided the needed leadership to drive transparency in the sector.
Lack of full disclosure and transparency in the extractive sector in the extractive sector hampers citizen’s participation in the sector, limits civic demand for accountability, and can ultimately impact on the pace of development in the country. It can also perpetuate corruption and diversion of public funds. It is important the Minister for Petroleum Resources provide the needed leadership to drive openness and accountability in the sector.
Speaking with DATAPHYTE, Mr. Segun Elemo, the Executive Director of the Paradigm Leadership Support Initiative, emphasized that country-level disclosure about the collection and utilisation of oil revenue remittances are crucial to open government. He further commented that nondisclosure creates a dark corner and a sense of impunity on the part of the government to account to citizens. He submitted that “failure on the part of the government to disclose oil remittances negates open government initiatives being pushed by NEITI, CAC and other anti-corruption agencies.
He further said citizens are not aware of what the country generates as remittances and other revenue from oil and gas due to little or no disclosure which inhibits their ability to ask questions and demand accountability. “Overall, it generates suspicion that these funds are mismanaged, which has been substantiated by the gross corruption and misappropriation of funds by the NDDC” he stressed.