Dr Orji Ogbonnaya Orji is the Executive Secretary, Nigeria Extractive Industries Transparency Initiative (NEITI). In this interview, he speaks of the feats of the agency in the past one year, especially the launch of the Beneficial Ownership portal for identifying the real owners and people that benefit directly from oil and gas companies.
The 2020 audit report has been published; what of the 2021 report?
The 2021 oil and gas sector report will be concluded and published before the end of this year. It is to establish what companies paid to the government within the given year of 2021 and how much of that money the government received. We equally want to establish if those companies paid what they should pay and if the government actually received what it should receive as well as the variances, if any.
We want to establish the quantity of crude that was produced, how much of that could be accounted for and how much was stolen. We should establish the amount that was exported, reserved for local consumption and how this was managed. Also, how did the recent marginal fields awards that took place go? Was Nigeria in good standing in terms of revenue collection?
We equally want to know, for instance, the taxes paid and how much of them were actually remitted. We are also looking at beneficial owners; who owns what within some of these companies.
And another issue is the liabilities of companies to the government. Why would it be difficult for companies operating in Nigeria to pay their taxes? From our last report in 2019, we unveiled 77 companies that were indebted to the country to the tune of $6.8 billion.
When we published our 2020 report, the amount fell by about 50 per cent and about 51 companies were liable. Our 2021 report needs to explain to us clearly whether all the companies have complied.
You mentioned the Beneficial Ownership which is to publicise the real owners of oil and gas firms, what is its status?
We became the first country in Africa to establish the BO portal which is what we are trying right now to update with every report. It requires us to identify the real owners of companies, the real owners, and people that benefit directly from companies, not the documentation that you see.
And providing this information will require a lot from all sides because it has implications for tax evasion, as illicit financial flows have implications on issues of insecurity.
So, when people are aware that the public is aware of them, they tend to be more responsible.
We are also working with the Corporate Affairs Commission (CAC) on the Open Government Partnership Beneficial Ownership (OGP – BO) to launch a national database on beneficial ownership; which will contain other companies, while ours will be specific on extractive industry companies.
We also launched the Opening Extractives on 9th November 2021 to empower the citizens on how to use data from BO. This platform teaches the citizens how to use the data generated from beneficial ownership portal to ask informed questions or promote public debate, and decide how to improve, track transparency and accountability.
The global Extractive Industries Transparency Initiative (EITI) validation exercise which happens once in three years is close. Is Nigeria prepared for this?
It is Nigeria that is under validation and it is a global assessment exercise that measures the level of implementation and impact of EITI in member countries. This year, Nigeria will be due for validation and it is done every three years.
What it requires is that a team from the global headquarters in Oslo will be arriving in Nigeria to evaluate what we have done within the three-year period. They will look at how we have engaged with civil society and citizens. They will equally look at the leadership of the National Stakeholders Working Group, among many others.
I have no doubt that as a country, we are getting ready. It is NEITI’s responsibility, to work with multi-stakeholders, to achieve this. This validation will take place in January 2023 but a team will be here in November as part of the process. It consists of compliance with the EITI requirements in the reforms going on in the oil and gas sector such as legal, human capital utilisation and financial management.
We are engaging with every necessary stakeholder to make sure that our country comes out tops because it is a national programme.
What would NEITI do if oil and gas companies that owe the government default after your report?
We did give the impression that if by the 2021 report companies are still in default of taxes and remittances to the government, then it is no longer tax evasion but will become an economic crime. Let me make it very clear, we want companies to do business in Nigeria and what we are doing is to widen that opportunity and engagement.
But one of the responsible and civic duties of a company in any jurisdiction is to pay taxes as and when due. So, we need companies to comply with that directive. The 2021 report needs to give us an update on that and a lot more because it is going to be a comprehensive report. This is why we want to get the report out before the end of this year, as we are about to commence procurement for the 2022 report.
The 2020 NEITI report said 77 companies defaulted in taxes, did any company deny this?
We had a press conference and we said we were going to disclose the names of the 77 companies that were owing. As soon as that happened, many of them had to do what was necessary because none of the companies wanted to be named as a tax defaulters for it can be embarrassing to them internationally.
Outside the country, if you don’t pay tax you’ll go to jail. It is a very serious criminal offence and nobody wants to be identified with such. You can’t mention any of these companies that are guarding their reputation as one that doesn’t pay tax. Many of them kept calling us to tell us that they were tidying up their papers and they went and paid the taxes to the required agencies.
Now, we didn’t know that the National Assembly discussed it at a plenary session and set up a committee and came to us to request that we show them proof that this kind of money is lying fallow and uncollected.
We appeared at the National Assembly and went with our team to work with the secretariat. We sat and watched to see any company that would deny that it was not what it owed. We have the facts.
Nobody, not one company, denied or contradicted us in terms of their indebtedness. And we discovered that from the 2019 report when 77 companies owed, it came down to 51 companies in 2020 and we are expecting that in 2021 there should be no company owing.
The payments are made to the Federal Inland Revenue Service and the Nigeria Upstream Petroleum Regulatory Commission. What some of us don’t know is that the inability of the government to meet basic needs is because sometimes the government may have money but it doesn’t know where the money is kept.
Is NEITI also auditing sectors other than the petroleum sector?
We have also moved into the solid minerals sector because there are companies that owe government taxes and royalties in that industry.
As we speak now, there is a committee between NEITI and the Revenue Mobilisation, Allocation and Fiscal Commission going to those companies one by one for that money to be remitted. That is in the solid minerals sector.
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