The missing oil revenue
By Sun News Publishing
Wednesday, July 06, 2011

Editorial Index

The latest report by the Nigeria Extractive Industries Transparency Initiative (NEITI) which reveals that the country lost over $240 billion revenue from the Oil and Gas industry between 1999 and 2008, shows an appalling lack of accountability and transparency in our public accounts auditing system.

The unaccounted revenue, according to Prof. Assisi Asobie, Chairman of NEITI National Steering Working Group, has exposed the discrepancies in the auditing processes of major revenue spinning parastatals of government, with the Nigerian National Petroleum Corporation (NNPC) and the Customs Service as the main culprits.

Asobie, however, admitted that NEITI has not been able to enforce the provisions of the Act establishing it. It has also not applied necessary sanctions and penalties against the guilty government agencies.

This is not the first time that NEITI has blown the lid off corporate fraud in key government revenue generating organisations. Few months ago, the NEITI chairman alerted the nation that a huge gap exists between the revenue generated by NNPC and other oil firms operating in the country, and the actual money remitted to government treasury.

Clearly, these sharp practices not only encourage corruption, they also hamper progress and policy implementation in the country. The amount unaccounted for in the NEITI report may just be a conservative estimate of the huge unaccounted revenue that might have been diverted into private pockets.

This malfeasance may have been possible because both the Federal Ministry of Finance and the Central Bank of Nigeria (CBN) do not maintain an accurate financial profile of revenue accruals from companies in the oil and gas sector.

It is commendable that NEITI has uncovered the poor public accounts procedures that permit these losses in revenue, but we believe it is not enough to just be a whistle blower.

NEITI should do much more than that by thoroughly investigating and documenting the loopholes in revenue remittances and pass the information to the Economic and Financial Crimes Commission (EFCC) for possible prosecution. The revelation by NEITI does not paint a good image of Nigeria. Government should show more than a passing interest in matters of such financial losses at a time that the country is in dire need of revenue to tackle so many problems. This huge unaccounted revenue could have been deployed to address pressing national problems such as infrastructure, power supply, roads, unemployment and the current state of insecurity across the country.

NEITI should bear in mind that its mandate includes supporting governments to implement good policies and practices along the entire natural resources value chain, especially oil and gas.
In that regard, NEITI should ensure strict compliance with the Fiscal Responsibility Act. It should immediately begin the process of procuring the services of reputable auditing firms to carry out a comprehensive audit of all solid minerals and oil companies that generate revenue for government. Such audit should cover, at least, a ten-year period, 2000-2010.

The public needs to know the scope and expenditure pattern of public funds. This will assist proper national planning and budgeting. Without a fair knowledge of expenditure pattern of public funds, especially in the Oil and Gas sub-sector, the desire of most Nigerians for good governance will be a mirage. It is in this regard that the United Nations Development Programme (UNDP) recently advised the Federal Government to squarely address the problem of graft in the public sector.

The same accounts for why our budgets remain perennial guessworks that have failed to achieve their objectives. Government should therefore take the report by NEITI very seriously and redress the situation immediately.


http://www.sunnewsonline.com/webpages/opinion/editorial/2011/july/06/editorial-06-07-2011-001.html

Abagworo:

The latest report by the Nigeria Extractive Industries Transparency Initiative (NEITI) [size=13pt]which reveals that the country lost over $240 billion revenue from the Oil and Gas industry between 1999 and 2008, shows an appalling lack of accountability and transparency in our public accounts auditing system.[/size]

The unaccounted revenue, according to Prof. Assisi Asobie, Chairman of NEITI National Steering Working Group, has exposed the discrepancies in the auditing processes of major revenue spinning parastatals of government, with the Nigerian National Petroleum Corporation (NNPC) and the Customs Service as the main culprits

I wonder how much we have lost since 2008.

Then AGANGA will say Nigeria is a poor country.