The Nigeria Extractive Industries Transparency Initiative NEITI has welcomed with high expectations, the commitment of the Federal Government to full disclosure of beneficial owners of companies doing business in Nigeria’s extractive industry.
The pronouncement by President Muhammadu Buhari (Thursday) at the Anti-corruption summit in London is in line with the position of NEITI as contained in its maiden Policy Brief on Beneficial Ownership Disclosure released in Abuja, a few days to the London Summit.
In the Policy Brief, NEITI identified the presence of anonymous companies as a threat to Nigeria’s economy and national security. NEITI called on President Buhari to champion policies and laws mandating public disclosure of the real owners of companies operating in all sectors in Nigeria, especially those in the extractive sector.
NEITI as the Agency responsible for the implementation of the Extractive Industries Transparency Initiative in Nigeria is quite encouraged by the speech delivered by President Buhari in London committing Nigeria to implementation of Beneficial Ownership Disclosure.
The Presidential commitment will no doubt strengthen the on-going reforms in the oil, gas and mining industry. In Mr. President’s words, “we welcome the new 2016 EITI Standard, in particular, the requirements on beneficial ownership and the sale of the government’s share of production”.
NEITI also notes with delight, the pronouncement by the President, to establish a public register of the beneficial owners of all companies operating in Nigeria. “Nigeria will establish a transparent central register of foreign companies bidding on public contracts and buying property. We welcome the proposal by developed countries to work together to improve the access of developing countries to beneficial ownership information for use in public contracting”, President Buhari declared.
NEITI views this development earlier canvassed in its Policy Brief as a major step in the right direction. This is because such a register will provide valid information and crucial facts on beneficial owners of companies involved in exploration, production, trading, import, export, and provision of other services in the extractive sector.
Apart from its immense benefits to the economy and national security, NEITI has argued that Beneficial Ownership disclosure has practical implication for increasing government revenues, reducing the incidences of corruption, money laundering and cutting off funding from drug lords and terrorists.
“Even when not always illegal or misused, secret companies are hardly in the interests of developing countries, anonymous companies are used to deny countries of valuable revenues through tax avoidance, and sometimes outright tax evasion. Then, the shroud of secrecy around them is used not only to mask possible corrupt relationships with government officials but also to obscure probable links to money laundering, drug trafficking’’. NEITI Policy Brief added.
NEITI equally applauds a similar pronouncement by the President on Open Contracting Data Standard that allows disclosure of data and documents at all stages of the contracting process.
The principles of Open Contracting Data Standard are consistent with the position of the global EITI standard on contract transparency which all member countries including Nigeria are encouraged to embrace.
NEITI agrees with the President that the introduction of Open Contracting Data Standard as part of the on-going reforms in Nigeria’s extractive industry will strengthen transparency in public contracting; encourage access, competence, competition, value for money, efficiency, and integrity of public contracting systems.
One other striking feature of President Buhari’s speech at the Anti-Corruption Summit was the open declaration of Nigeria’s unequivocal commitment to the global EITI. President Buhari stated “We commit to work together to enhance company disclosure on the payments to governments for the sale of oil, gas and minerals, complementing ongoing work within the EITI. Nigeria is already reporting progress through the EITI working groups and will continue to work with interested countries to build a common understanding and strengthen the evidence for transparency in this area”.
For us in NEITI, the President’s reaffirmation of Nigeria’s commitment to the principles of the global EITI could not have come at a better time than now that Nigeria through NEITI is repositioning its operations to move from the emphasis on transparency and accountability to how implementation of EITI can translate to direct impacts in terms of poverty reduction and improved quality of life for the citizens.
Dr. Orji Ogbonnaya Orji