‘Beneficial ownership to address financial leakages in extractive sector’
The Minister of Finance Budget and Planning Zainab Ahmed and State Minister for Petroleum Resources, Timipre Sylva as well as other stakeholders in the extractive sector in the country, have said introduction of beneficial ownership register in the country will create a win-win situation in the sector, especially in blocking financial leakages.
The Nigeria Extractive Industry Transparency Initiative (NEITI) had revealed that secret ownership of companies, especially in the oil, gas and mining sectors, was costing Nigeria and other developing countries about $1 trillion yearly.
To address the challenge and comply with the Extractive Industry Transparency Initiative (EITI) Nigeria and other EITI implementing countries have until December 31, 2019 deadline to open a beneficial ownership standard register.
The register will make all member-nations ensure that oil, gas and mining companies that apply for, or hold a participating interest in an exploration or production of oil, gas or mining licence or contract publish the names of their real owners.
Speaking at a roundtable organised by Media Initiative on Transparency in Extractive Industries (MITEI) and NEITI on beneficial ownership register in Nigeria, Ahmed noted that government would through that means address tax evasion, terrorist financing, and corruption.
Ahmed said: “Through the establishment of such a central register, we will be able to follow monies linked to tax evasion, corruption, drug trafficking, money laundering, and terrorism financing.
“In Nigeria, we have experienced significant challenges in managing sector corruption, leading to significant loss of revenue, security challenges and eroding public interest.
“This reality has served as a sobering wake-up call and resulted in a move towards establishing measures and standards that mandate the disclosure of the beneficial owners of such anonymous companies and the coordinated development of a national public register in the extractives industries and beyond.”
Sylva, who was represented by his Chief of Staff / Senior Technical Assistant, Moses Olamide, noted that the Beneficial Ownership Register in Nigeria accurately reflects the pulse of the Ministry of Petroleum Resources on the need for transparency in the sector and aligns with the key priorities the administration.
He noted that there is need to clearly identify the key players in the oil and gas industry with a view to understanding the “identity of who does what, where and how.”
He further reiterated that the current effort at reviewing the Petroleum Industry Bill captures Beneficial Ownership with a view to creating an open and globally aligned process that will ensure transparency.
Executive Secretary, NEITI, Waziri Adio, said establishing registers will not be the panacea to all the challenges in the sector, especially in the areas of tracking revenue, fighting corruption.
Adding that the document would not automatically lead solution, Adio said: “It will continue to be a work in progress, a beginning and not the end. For it to work, all of us must be ready to make it work.”