Nigeria broadens campaign for transparency in oil industry

Feb 21, 2004 01:00 AM

The current campaign for transparency in the collection of oil revenues is a prelude to a wider one to improve governance, the Working Group on Nigeria Extractive Industry Transparency Initiative (EITI) has said.
The Group, which is carrying out the campaign, says in a document that once revenues collected are accurately known and reported, focus can shift to a debate on how well they have been used.

The explanation is coming on the heels of a two-day Petroleum Revenue Management Workshop, which began in Abuja, involving revenue and financial experts as well as captains of the petroleum industry.
The document, which explains measures to enhance petroleum revenue transparency for public information and policy making, discusses transparency matters, components of petroleum revenues in Nigeria, institutional responsibilities, and current reporting sources. It says policy makers in the country need good information on public finances to devise right policies, while the public needs it to trust them.

"Knowledge about the significant revenue flows from the oil and gas sector is currently marred by inconsistencies and deficiencies, and these give rise to concerns about governance both within Nigeria and internationally.”
"The federal government has recognised that improvements in the transparency of petroleum revenue date are needed for the effective management of public resources and to improve the image of Nigeria at home and abroad," it explains.

The Group explained that EITI is targeting the petroleum sector because of the very substantial economic rents and revenues that oil and gas are capable of generating for the country.
It lists the components of oil revenues in the country to include bonuses, royalties, profit taxes, production shares, government sales of crude, domestic market allocation and other taxes and charges.

It also says that current reporting sources for revenue in the petroleum sector include company accounts and audits, tax/payment returns and government agencies. However, discrepancies are common among the various reports, in the areas of volumes, prices, costs, and royalties, among others, it says.
"These discrepancies, together with acknowledged weaknesses in institutional capacity, undermine the credibility of the reports," it adds.

Source: Weekly Trust
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