NIGERIA Invest in 2012-13 - Newsdesk Media

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OIL, GAS AND MINERALS
In Nigeria, NEITI was inaugurated in February 2004
when President Obasanjo launched the National Stakeholders
Working Group (NSWG) under the leadership of government
minister Obiageli Ezekwesili. The NSWG oversees the activities
of NEITI and works with stakeholders to build consensus on
the need for extractive revenue transparency in Nigeria.
Leading the way
The NEITI Bill was passed by the National Assembly and
signed into law by President Obasanjo in 2007, and with this
legal backing, Nigeria became the first EITI-implementing
country. The EITI Board designated Nigeria as EITI compliant
last year, the final part of the process.
NEITI requires companies in the extractive industries to
regularly publish accounts of all major payments made to the
government, while also requiring the government to publish
accounts of all revenues it has received from the sector. Both
sets of accounts need to be available and easily accessible to
the public, and provide a comprehensive description of the
payments and revenues.
Many companies will already
carry out such checks, but in
cases where they do not, an
independent audit of
payments and revenues takes
place. The international
standards that are applied
ensure that the opinion of the
auditor is published following
the reconciliation of payments and revenues, with any
differences noted. This is the case for state-owned companies,
as well as private corporations.
It is important that civil society is also a key player in all
stages of the NEITI process, and public debate is one way to
achieve this. With that in mind, the inaugural NEITI National
Conference took place in Abuja in February 2012.
The conference was attended by representatives of the
Nigerian government, civil society, business leaders and the
oil industry, and reaffirmed the values of NEITI to partner
with all stakeholders in the extractive sector to achieve true
transparency. Speaking at the closing ceremony, NEITI’s
executive secretary, Zainab Ahmed, announced that NEITI will
soon start to sanction any body, on either the government or
commercial side of the extractive industry, which is not
publishing the information required of them under the NEITI
Act. This, together with the rewards that NEITI can provide,
will deliver the benefit of fairness to all in the industry.
INvESt IN NIGERIA 2012-13
Stability is reliant on good
governance, and this is
what NEITI provides
When looking at NEITI from a corporate perspective, the
advantages of such transparency may not be clear immediately,
and in some cases can appear different to long-established
ways of doing business. However, NEITI is good for companies
that are looking to invest in the extractive industries in Nigeria.
The initiative allows for a consensus-building system of
development, which helps to create a stable and coherent
environment for the future. Transparency builds trust, which
creates good governance and thus boosts the stability of a
country. This allows companies to plan and operate efficiently,
which, in turn, drives profits. This is good news for the
company and its stakeholders, but also for the country in
which the company is operating. Stability is reliant on good
governance, and this is what NEITI provides.
Today, corporate and social responsibility (CSR) plays a
major part, both politically and in the business world. In this
context, transparency makes sense for all sides. Companies
want to enter a country that is committed to ethical business
practices and transparency. This is what NEITI gives firms in
the extractive industry that
are operating in Nigeria or
are interested in doing so.
By enshrining in law
the accountable and
transparent use of resources,
NEITI demonstrates how
Nigeria’s assets are benefiting
the people, in a way in
which the companies in the
extractive industry are committed. The money that NEITI
saves provides the government with additional resources that
can be spent across areas of social development.
Nigeria took a lead in bringing transparency to the
extractive industry and, today, 35 resource-rich countries
have also implemented the EITI standard. This is not limited
to certain countries or areas in the world, rather the ultimate
standard for global best practice. In September 2011, US
president Barack Obama announced his country’s commitment
to implementing EITI. As other countries begin to implement
the standard, Nigeria has a head start in many ways. New
initiatives, such as the NEITI National Conference, stand
the country in good stead ahead of its revalidation from the
EITI Board in 2016. ■
Ben Poole is a writer and editor, specialising in corporate
treasury and finance, and transaction banking. He is also
former editor of World Coal magazine