- Nigeria Lags Behind 16 African Countries in Oil Governance
Although Nigeria is Africa’s top oil producer and exporter, the country falls short when it comes to the governance of its oil and gas industry, a new global report has shown.
The 2017 Resource Governance Index, which was unveiled on Wednesday by the Natural Resource Governance Institute, ranked Nigeria 55th among 89 assessments, lagging behind Ghana and 15 other African counterparts.
Ghana led the African countries in the report as it was ranked 13th, and was followed by Burkina Faso, which occupied the 20th position.
Others are South Africa, Côte d’Ivoire, Cameroon, Niger, Mali, Tanzania, Morocco, Zambia, Mozambique, Sierra Leone, Uganda, Liberia, Botswana and Tunisia.
Nigeria is one of the world’s most resource-dependent countries, with oil and gas exports contributing the largest share of government revenue.
According to the NRGI, the oil and gas sector’s governance issues in Nigeria impact the wellbeing of a large number of people because the country has the largest population on the African continent.
It said, “Governance challenges are present throughout the extractive decision chain. Value is lost particularly in licensing and in the Nigerian National Petroleum Corporation’s sales of government oil, as well as when revenues from oil and gas are shared and saved.
“Furthermore, a history of scandals involving top officials at the NNPC has plagued the sector and drawn public attention to corruption and asset recovery. Given the NNPC’s central role in all stages of the decision chain, improving governance of the state-owned enterprise is crucial.”
The report described licensing as the weakest link in Nigeria’s value realisation component, with a score of 17 of 100, placing it 77th among the 89 country-licensing assessments.
It said the score and ranking reflected high levels of opacity in key areas of decision-making, including qualification of companies, process rules and disclosure of terms.
The Nigeria Manager, NRGI, Sarah Muyonga, said, “A well-organised and transparent licensing round gives Nigeria a huge opportunity to send a message of its recent deliberate efforts of improving the oil sector. It will clearly communicate that it’s not business as usual.
She emphasised the importance of a bid round that would carefully avoid the mistakes of the past with a clearly articulated objective criteria, and ensuring fair competition and transparency.
The report said, “The Nigerian government does not regularly publicly disclose government officials’ financial interests in the extractive sector or the identities of beneficial owners of extractive companies, though it has made some early commitments to do so with the Extractive Industries Transparency Initiative and the Open Government Partnership.
“The government has committed to disclosing all oil, gas and mining contracts in its ‘seven big wins’ policy strategy and as part of its OGP action plan, but thus far, it has not disclosed contracts.”
The NRGI said despite some progress in transparency of revenue collection over the past five years, tracking payments from oil and gas companies remained challenging.
It said, “The public lacks access to audited information on revenue flows to lower levels of government, and this contributes to the gap between the quality of the legal framework and actual implementation.”
The report also revealed that the NNPC, the largest state-owned enterprise on the continent, achieved a poor governance score of 44 out of 100.
It said the corporation mainly scored well on indicators that measured elements of transparency required by the EITI reporting, such as transfers to government and production volume disclosure.
The NRGI noted that the NNPC had recently strengthened some of its reporting practices, particularly for high-level financial data.
It, however, said, “The corporation does not disclose detailed annual reports on its finances, despite top officials having made a commitment to do so. Little information is publicly available, particularly concerning some of the NNPC’s least efficient and most questionable activities, notably earnings by its subsidiaries, the costs of its operations and its significant spending on non-commercial activities.”
According to the report, Nigeria performs poorly in oversight of key revenue collection, sharing and savings practices.
The Excess Crude Account was described as the most poorly governed sovereign wealth fund assessed by the index, ranking last alongside the Qatari Investment Authority.
The NRGI said, “The government discloses almost none of the rules or practices governing deposits, withdrawals or investments of the ECA. Nigeria also has other natural resource funds, some of which are more transparent than the ECA.
“As the largest fund by asset balance, the ECA constitutes a vast governance concern at the end of the oil sector value chain.”
The index assessed 33 sovereign wealth funds that collectively manage at least $3.3tn in assets, with the Colombia’s Savings and Stabilisation Fund adjudged the best-governed fund and Ghana’s among the top six performing funds.
“Funds in Algeria, Angola, Chad, Equatorial Guinea, Gabon, Nigeria, Qatar, Saudi Arabia, Sudan and Venezuela are so opaque that there is no way to know how much may be lost to mismanagement – or who benefits from these funds’ investments,” the report said.
The policy institute noted that government agencies and external auditors had disputed the NNPC’s interpretation of rules set in the constitution and the NNPC Act governing monetary transfers between the NNPC and the government.
NNPC Supplies 1.44 Billion Litres of Petrol in January 2021
The Nigerian National Petroleum Corporation (NNPC) supplied a total of 1.44 billion litres of Premium Motor Spirit popularly known as petrol in January 2021.
The corporation disclosed in its latest Monthly Financial and Operations Report (MFOR) for the month of January.
NNPC said the 1.44 billion litres translate to 46.30 million litres per day.
Also, a total of 223.55Billion Cubic Feet (BCF) of natural gas was produced in the month of January 2021, translating to an average daily production of 7,220.22 Million Standard Cubic Feet per Day (mmscfd).
The 223.55BCF gas production figure also represents a 4.79% increase over output in December 2020.
Also, the daily average natural gas supply to gas power plants increased by 2.38 percent to 836mmscfd, equivalent to power generation of 3,415MW.
For the period of January 2020 to January 2021, a total of 2,973.01BCF of gas was produced representing an average daily production of 7,585.78 mmscfd during the period.
Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 65.20%, 19.97 percent and 14.83 percent respectively to the total national gas production.
Out of the total gas output in January 2021, a total of 149.24BCF of gas was commercialized consisting of 44.29BCF and 104.95BCF for the domestic and export markets respectively.
NNPC Says Pipeline Vandalism Decrease by 37.21 Percent in January 2021
The Nigerian National Petroleum Corporation (NNPC) said vandalisation of pipelines across the country reduced by 37.21 percent in the month of January 2021.
This was disclosed in the January 2021 edition of the NNPC Monthly Financial and Operations Report (MFOR).
The report noted that 27 pipeline points were vandalised in January 2021, down from 43 points posted in December 2020.
It also stated that the Mosimi Area accounted for 74 percent of the total vandalised points in Janauray while Kaduna Area and Port Harcourt accounted for the remaining 22 percent and 4 percent respectively.
NNPC said it will continue to engage local communities and other stakeholders to reduce and eventually eliminate the pipeline vandalism menace.
Nigeria’s Food Inflation Hits 22.95 Percent in March 2021
Food inflation in Africa’s largest economy Nigeria rose by 22.95 percent in March 2021, the latest report from the National Bureau of Statistics (NBS) has shown.
Food Index increased at a faster pace when compared to 21.70 percent filed in February 2021.
Increases were recorded in Bread and cereals, Potatoes, yam and other tubers, Meat, Vegetable, Fish, Oils and fats and fruits.
On a monthly basis, the food sub-index grew by 1.90 percent in March 2021. An increase of 0.01 percent points from 1.89 percent recorded in February 2021.
Analysing a more stable inflation trend, the twelve-month ended March 2021, showed the food index averaged 17.93 percent in the last twelve months, representing an increase of 0.68 percent when compared to 17.25 percent recorded in February 2021.
Insecurities amid wide foreign exchange rates and several other bottlenecks that impeded free inflow of imported goods were responsible for the surged in prices of goods and services in March, according to the report.
The Central Bank of Nigeria-led monetary policy committee had attributed the increase in prices to scarcity created by the intermittent clash between herdsmen and farmers across the nation.
However, other factors like unclear economic policies, increased in electricity tariffs, duties, subsidy removal and weak fiscal buffer to moderate the negative effect of COVID-19 on the economy continue to weigh and drag on new investment and expansion of local production despite the Federal Government aggressive call for improvement in domestic production.
Nigeria’s headline inflation rose by 18.17 percent year-on-year in the month under review.
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