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 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.”
According to the report, Nigeria performs poorly in oversight of key revenue collection, sharing and savings practices.
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