Markets

Report: Nigeria’s Excess Crude Account One of World’s Least Transparent

Published

7 years ago

June 29, 2017

Report: Nigeria’s Excess Crude Account One of World’s Least Transparent

A new report by the Natural Resource Governance Institute (NRGI) has revealed that despite some progress in transparency of revenue collection over the past five years, tracking payments from oil and gas companies operating in Nigeria remains challenging with the country’s Excess Crude Account (ECA) being the most poorly governed sovereign wealth fund assessed by the index, ranking last alongside the Qatari Investment Authority.

The NRGI report released yesterday further alleged that the federal government disclosed almost none of the rules or practices governing deposits, withdrawals or investments of the ECA.

The report noted that though Nigeria also has other natural resource funds, some of which are more transparent than the ECA, it acknowledged that the ECA as the largest fund by asset balance, constitutes a vast governance concern at the end of the oil sector value chain.

Nigeria scored 42 of 100 points and ranks 55th among 89 assessments in the 2017 Resource Governance Index (RGI).

According to the report, licensing is the weakest link in Nigeria’s value realisation component, with a score of 17 of 100, placing it 77th among 89 country licensing assessments.

“This score and ranking reflect high levels of opacity in key areas of decision-making, including qualification of companies, process rules and disclosure of terms,” 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 (EITI) and the Open Government Partnership (OGP). 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 report added.

Citing NEITI reports, NRGI noted that despite some progress in transparency of revenue collection over the past five years, tracking payments from oil and gas companies remains challenging.

“In terms of revenue sharing, Nigeria ranks 11th, alongside the United States (Gulf of Mexico) and Ecuador. 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,” said the report.

NRGI also argued that despite some improvements in transparency, NNPC’s performance and accountability challenges still persist.

According to the report, NNPC achieves a poor governance score of 44 of 100.

“The corporation mainly scores well on indicators that measure elements of transparency required by EITI reporting, such as transfers to government and production volume disclosure,” the report added.

The report acknowledged that NNPC has recently strengthened some of its reporting practices, particularly for high-level financial data. However, the report pointed out that the company 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 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. Government agencies and external auditors have disputed NNPC’s interpretation of rules set in the constitution and the NNPC Act governing monetary transfers between NNPC and the government,” said NRGI.

Nigeria Country Manager for NRGI, Sarah Muyonga, said NNPC had made some new disclosures under the Muhammadu Buhari administration, but added that “the details and revenue implications of many of its high-value transactions remain secret.”

“Furthermore, 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. This enables widespread corruption, with which Nigerians are all too familiar,” Muyonga added.

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Energy

How Nigeria’s National Power Grid Collapsed Ten Times Within 9 Months

Published

7 hours ago

November 5, 2024

Ugwoke Ogbodo

The national power grid has again collapsed, leaving many Nigerians in total darkness.

Investors King can authoritatively report that this is the tenth time the power grid will be disrupted this year alone.

For this recent collapse, the grid, reportedly lost power generation around 1:39 pm on Tuesday.

Information revealed that power generation was 2,711 megawatts as of 1:00 pm, having previously peaked at 3,631 MW.

Earlier, power generation peaked at 3,934.77 MW around six o’clock in the morning.

However, between 2 pm and 3 pm, hourly generation dropped to 0.00 MW.

The Transmission Company of Nigeria confirmed that the national grid experienced a partial disturbance at about 1:52 pm on Tuesday, 5th November 2024.

TCN spokesperson Ndidi Mbah mentioned that the recent collapse was due to a series of line and generator trippings that caused instability in the grid and, consequently, the partial disturbance of the system.

Mbah pointed out that data from the National Control Centre revealed that a part of the grid was not affected by the bulk power disruption.

TCN however indicated that work work is in progress to restore power.

She explained that engineers are already working to quickly restore bulk power supply to the states affected by the “partial disturbance.”

Mbah noted that presently, bulk power supply has been restored to Abuja at 2:49 pm, maintaining that “we are gradually restoring it to other parts of the country.”

She apologized to Nigerians for whatever inconvenience the collapse might have caused.

Findings by Investors King revealed that the grid had collapsed at ten different times between March and November, this year.

Times the grid collapsed included February 4, March 28, April 15, July 16, two times in August 5, October 14, October 15, twice in October 19 and now today, November 5.

Energy

Darkness Falls Again: TCN Explains Latest National Grid Collapse

Published

7 hours ago

November 5, 2024

Bassey Marshall

The Transmission Company of Nigeria (TCN) has provided an explanation for the latest National Grid collapse, which occurred on Tuesday, November 5.

Tuesday’s collapse, marking the 10th in 2024 alone, left Nigerians in total darkness.

Recall that the National Grid collapsed twice in October, sparking concerns among Nigerians.

Reacting to the latest collapse via a statement on Tuesday, the General Manager of TCN Public Affairs, Ndidi Mbah, disclosed that the collapse happened at 1:52 pm.

The GM revealed that the grid collapse was caused by line and generator trippings.

Mrs. Mbah said, “TCN states that the national grid experienced a partial disturbance at about 1:52 pm today, 5th November 2024.

“This followed a series of line and generator trippings that caused instability in the grid and, consequently, the partial disturbance of the system.

Data from the National Control Centre (NCC) revealed that a part of the grid was not affected by the bulk power disruption.

Mbah disclosed that operators are working to restore power in affected states, adding that power was restored in Abuja.

She explained, “TCN engineers are already working to quickly restore bulk power supply to the states affected by the partial disturbance. Presently, bulk power supply has been restored to Abuja at 2:49 pm, and we are gradually restoring power to other parts of the country.”

Apologizing to Nigerians, TCN said, “We sincerely apologize for any inconvenience this may cause our electricity customers.”

Investors King, in an earlier report, revealed that in an attempt to address the persistent collapse of the national grid, the Nigerian Electricity Regulatory Commission (NERC) announced that discussions were underway with Independent Operators to take over the management of the grid.

Energy

Nigeria Partners with ECOWAS and Morocco to Launch $26B African Gas Pipeline

Published

14 hours ago

November 5, 2024

Bassey Marshall

The Nigerian government, in partnership with the Economic Community of West African States (ECOWAS), Morocco, and Mauritania, has announced plans to advance the $26 billion African Atlantic Gas Pipeline project to drive economic growth across Africa.

This development was revealed on Monday, November 5, by Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), at the ECOWAS Inter-Ministerial Meeting on the Nigeria-Morocco Gas Pipeline Project.

Speaking at the meeting, which was attended by ECOWAS Ministers of Hydrocarbons and Energy as well as representatives from Morocco and Mauritania, Kyari stated that, once completed, the project will connect 13 African countries.

Represented by Olalekan Ogunleye, NNPC’s Executive Vice President for Gas Power & New Energy, Kyari said this will be Africa’s largest pipeline project.

Ogunleye confirmed that progress has been made with the front-end engineering design completed, the phase two study finalized, and work ongoing for environmental and social impact assessments as well as land acquisition and resettlement.

He emphasized NNPC’s readiness to execute the project: “Today, we come together to make significant progress in the African Atlantic gas pipeline project, which is a transformative initiative connecting at least 13 African nations in shared prosperity and development. These achievements underscore our capability to deliver this landmark project, supported by strong regional collaboration.”

Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas), described the project as a game-changer for the regional economy, stating, “We stand at a critical juncture where these agreements can reshape our energy landscape, strengthen our economies, and uplift our people.”

He also highlighted that the project will increase Africa’s presence in the global gas market, noting that “the agreements demonstrate a strong commitment to advancing hydrocarbon and energy trade across ECOWAS, enhancing access to natural gas in West Africa, and expanding Africa’s global footprint in the gas market.”