Jun 11, 2013

Ogoni: NEITI Says Federal Government Is Crippling Its Activities

The Nigeria Extractive Industries Transparency Initiative (NEITI) has lamented its treatment by the Federal Government, saying the government is, by its actions, crippling the agencies’ activities.

Below is an article published by Channels:

The agency which has won local and international commendations for its audit of the oil and gas industry, as well as other industries in the extractive sector, said that between 2011 and 2013, the federal government has slashed its budget by 50 percent.

This was disclosed by the chairman of the NEITI governing board, Ledum Mitee, while speaking to journalists after a meeting with President Goodluck Jonathan, who has been in office since 2010, at the Presidential Villa.

“NEITI’s budgetary provisions have continued to dwindle whilst its activities remain on steady expansion and the situation has worsened to the extent that it threatens the agency’s continued performance of its core function.

“By the current funding profile it will be impossible for NEITI to even support some its statutory audits for the current year, if nothing is done to ameliorate the situation,” he said.

The chairman said he and his team “came to present to the President a report of what we have been doing so far, the fact that we won an international award at the Sydney global EITI conference held last Month; Nigeria was adjured the best.”

“What we have tried to identify is that between 2011 and 2013, there has been some 50 per cent reduction in our budgetary allocation which we thought was threatening the smooth operation of our work.

“Our responsibility is to identify gaps. The key issue which good out of the meeting was that we have to close the gap between what NEITI is doing and what the economic team is doing. We all acknowledge that there has been some gap because NEITI should be seen as part of the larger economic management team.

“We are not just out to find faults, we are there to help government to even raise revenue and identify gaps so that they can be remedied and that should be seen within the larger frame work of the reforms we all pray for.

“Out of the 39 countries that are implementing EITI, Nigeria’s mode of implementation has been rated the best,” he added.

NEITI, whose reports have in the past indicted major agencies in the petroleum ministry supervised by petroleum minister, Diezani Alison-Madueke, had lamented the non-implementation of its report by the presidency, a claim that has never been denied.

Mr Mitee also said the situation of no funds to even support the committees and meetings of the board threatens the EITI’s compliant status. He urged the president to also address the issue of paltry allowances and welfare of its members.

“This will in no small measure help to incentivize members in carrying out this sensitive and important national and international assignment”.

He said so far NEITI had recovered the sum of N314 billion ($2 billion) out of the N1.534 trillion ($9.8 billion) potential revenue loss to the federation account.

He said after successfully conducting four cycles of audits, it was revealed that the $9.8 billion potential had accrued from under- assessments and under- payment of taxes, rents, process manipulation and poor interpretation of agreements between government and companies.

Mr Mitee, an Ogoni leader, said amongst the things discussed in the meeting with the President was the challenges facing the extractive industry.

He said NEITI was of the view that the absence of reliable baseline information and data on the actual quantity of crude either lost through theft, bunkering or pipeline vandalisation remains a major challenge to the extractive industry. He called for urgent presidential intervention on the issue of proper metering regime which has been a recurring recommendation in the audits.