Urgent Calls for Reform in Nigeria’s Extractive Industries

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By Ogeyi Blessing

The recent release of the 2023 Extractive Industries Transparency Initiative (EITI) Validation Report on Nigeria has cast a spotlight on the critical challenges facing the nation’s commitment to transparency and accountability in its extractive industries. Urgent calls for remediation and swift action have been sounded by the Publish What You Pay (PWYP), Nigeria, and the Community Outreach for Development and Welfare Advocacy (CODWA), both organizations actively engaged in championing transparency and accountability within Nigeria’s extractive sectors.

This validation exercise, conducted by the global EITI, serves as a rigorous quality assessment mechanism, evaluating the progress of member countries in implementing EITI standards and ensuring compliance with its stringent requirements. The results have ignited a call to action directed at President Bola Ahmed Tinubu, urging the immediate implementation of key recommendations outlined in the report to bolster the EITI process in the country.

The EITI’s recommendations encompass a spectrum of critical areas, ranging from greater government oversight of the Nigeria Extractive Industries Transparency Initiative (NEITI) Secretariat to active participation and effective engagement of extractive companies in the EITI process. The report emphasizes the imperative for comprehensive involvement of civil society in all aspects of the EITI process, underscoring its pivotal role in ensuring free and independent participation.

One noteworthy recommendation is the call for the amendment of the “NEITI 2007 ACT” to align with the contemporary reality, signifying the need for legal reforms to adapt to the evolving landscape of the extractive industries.

According to the report, Nigeria received a moderate score of 72 points in implementing the global EITI standard. This score is a composite of three components: stakeholders engagements, transparency, and outcomes and impacts. While the country achieved a commendable high score of 92 points in outcomes and impacts, a moderate 71.5 points in transparency, and a concerning 52.5 points in stakeholders engagements were recorded. Additionally, Nigeria received two additional points for the effectiveness and sustainability of its EITI implementation.

The global body has mandated Nigeria to undertake the implementation of all identified recommendations and corrective actions before the next validation exercise, slated for January 2026. Failure to comply could result in the nation’s suspension from the prestigious global EITI platform.

The current EITI ranking of Nigeria carries significant economic implications, particularly in the context of attracting foreign investments into the country’s vital oil, gas, and mining sectors. This ranking reflects a worrisome backslide from the 2019 assessment when Nigeria was accorded the status of “Satisfactory Progress,” the highest ranking attainable at that time.

This regression is indicative of systemic weaknesses, including weak institutions, poor stakeholders engagement, and a deficient transparency and accountability process. The repercussions of this decline in the global EITI ranking extend beyond a mere numerical assessment, impacting investor confidence and impeding the growth of the extractive sector.

Foreign investors, multilateral institutions, and development agencies attach great significance to the EITI validation report when making investment decisions. The fairly low score in the stakeholders’ engagement component, particularly among extractive companies, signals a lack of confidence in the Nigerian EITI process, influencing investment decisions in the sector.

In light of these revelations, the onus falls on the Presidency and other oversight agencies to act decisively and swiftly in implementing the key recommendations and broader reforms. The imperative for effective EITI implementation in Nigeria is paramount, not only for the restoration of investor confidence but also for the sustainable growth of the extractive industries.

The collaborative call to action from Comrade Taiwo Otitolaye, National Coordinator of Publish What You Pay (PWYP), Nigeria, and Adebayo Titus of Community Outreach for Development and Welfare Advocacy (CODWA) amplifies the urgency of the situation. It serves as a clarion call for stakeholders, policymakers, and the public alike to recognize the gravity of the current challenges and work collectively towards a more transparent, accountable, and robust extractive industry in Nigeria.

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