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Stakeholders worry loopholes in PIA may fuel corruption, revenue leakages

By Kingsley Jeremiah, Abuja
20 July 2022   |   2:46 am
Stakeholders have insisted that there was a need for transparency and accountability in the nation’s extractive sector, stressing that the state oil firm, Nigerian National Petroleum Company Limited (NNPC)

Deputy President of the Senate, Ovie Omo-Agege (left);  Deputy Speaker, House of Representatives, Ahmed Wase; Vice President Yemi Osinbajo; President Muhammadu Buhari and President of the Senate, Ahmad Lawan during unveiling of the Petroleum Industry Act committee at the Presidential Villa. PHOTO: PHILIP OJISUA

Insist NNPC yet to improve transparency

Stakeholders have insisted that there was a need for transparency and accountability in the nation’s extractive sector, stressing that the state oil firm, Nigerian National Petroleum Company Limited (NNPC) has done little or nothing in the area of transparency.

Speaking at an event in Abuja, where OrderPaper Nigeria launched a policy brief to interrogate the Petroleum Industry Act (PIA) under the Growth Initiatives for Fiscal Transparency (GIFT) Nigeria, the stakeholders noted that Nigerians must not be carried away by the disclosure of information by NNPC.

“Disclosure does not translate to transparency. I can disclose rubbish. NNPC has improved disclosure but has not improved transparency,” energy expert Henry Adigun said at the event.

He however admitted that the oil company has moved from being opaque to being clearer but insisted that the media and Civil Society Organisations must ensure that the company becomes transparent.

He noted that the Fiscal Responsibility Commission, set up to manage resources in a way that meets the needs of present and future generations, could do better but is grossly underfunded.

Adigun, who reviewed the GIFT policy brief said proper funding would enable the Fiscal Responsibility Commission (FRC) to carry out its mandate in enforcing provisions on fiscal responsibility and macro-economic stability.

Executive Director of OrderPaper Nigeria, Oke Epia noted that the policy brief would correct some of the loopholes in the PIA and dissect its responses to fiscal responsibility issues.

He noted that the brief would look at the exceptions granted to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian Midstream Downstream Regulatory Authority (NMDPRA) and the NNPC.

Epia said the brief, ‘Mainstreaming Fiscal Responsibility in Nigeria’s Petroleum Sector’ was conducted by OrderPaper Advocacy Initiative (AI) and its Partners in the GIFT project including Centre for Transparency Advocacy (CTA), HipCity Innovation Centre, CLICE Foundation and the Nigeria Institute of Quantity Surveyors (NIQS).

According to him, the move will reduce corruption in the sector, increase revenue remittances to government coffers by state entities, and promote efficient and effective service delivery by the government.

Epia said the brief would examine extant fiscal responsibility instruments, especially as they relate to the petroleum sector in Nigeria.

“This is because the sector is not only the mainstay of the economy and major foreign exchange earner but also the pivot upon which diversification and economic growth and development should stand. However, the widespread perception is that there is little transparency and accountability, and a prevalence of corruption, waste, and leakages in the sector. Therefore, the need to ensure fiscal responsibility and responsiveness; as well as instil transparency and accountability in the governance and management of the petroleum sector, is an urgent imperative,” he stated.

He said the PIA entrenched the perceived closed character of the petroleum industry by imposing certain ouster clauses that unfortunately impact public finance managers and entities like the Fiscal Responsibility Commission (FRC) in providing oversight on the sector.

Epia said while the PIA has several good initiatives, there are drawbacks related to revenue mobilization into the central pool of government, adding that the law has serious implications for the public finances of the federation.

“For instance, the reduction in remittance of collectables by the NNPC Ltd will result in a considerable reduction in revenues available for service delivery by Government,” the policy brief noted.

The stakeholders called for the amendment of the FRA act and further interrogation of the PIA to address ouster clauses it places on the FRA.

Chairman of FRC, who was represented by the head of legal and enforcement, Victor Muruako, while commending the brief said, “weak regulatory regimes have dire consequences on the fiscal health of the country, and ultimately, the standard of living of the Nigerian people”.