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NEITI 2013 AUDIT: TIME TO KNOW WHO GOT WHAT

By NBF News
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http://www.nigerianbestforum.com/blog/?attachment_id=122249 Despite the huge extractive minerals resources Nigeria is blessed with, Nigerians still wallow in abject poverty with many living below  the poverty line of one dollar a day. Juliet Alohan looks at how the planned extractive revenue disbursement audit by the Nigeria Extractive Industries Transparency Initiative (NEITI) this year, can help ensure fair use of the nation's resources.

The Nigeria Extractive Industries Transparency Initiative (NEITI) is set to commence a comprehensive independent audit of fiscal allocation and statutory disbursements of the extractive industries revenue funds from the federation account to the three tiers of government in line with section 2 of NEITI Act, 2007.

The audit which has already been approved by the Federal Executive Council (FEC), presided over by President Goodluck Jonathan, on November 28, 2012, will cover January 2007 to December 31, 2011 .

It seeks to establish how funds from the extractive sector, which accounts largely for the country's in-come, were distributed and received by the Federal, State and Local Government Areas (LGAs) within the period, given the alarming level of poverty in the country occasioned by the mismanagement of funds.

The audit is also designed to provide base line information and data to the three tiers of government on who gets what, how and why; even as it is expected to find out if each of the three tiers actually gets from the funds what is due to them.

The transparency agency has expressed confidence that the exercise will provide the necessary information and data required to block any leakages in the system, adding that it would help identify critical areas of national needs to channel oil, gas and mining revenue to, with a view to reduce poverty in Nigeria.

Welcoming the move, Civil Society Organisations (CSO) in the oil and gas sector have described it as laudable, stressing that there was need for the application of the NEITI Act at the state level.

The coalition maintained that considering the nature of governance in Nigeria which operates a federal system of government, the NEITI Act, which is a federal law, needs to be localised at the state levels.

According to the National Coordinator of Publish What You Pay (PWYP) Nigeria, Faith Nwadishi, Nigerians are yet to realise that they have the tools in their hands to get governments at all levels to be accountable despite the fact that some policies and laws have been put in place to support the implementation of EITI in Nigeria.

'Therefore, it is essential for us to quickly come up with the best ways to engage the states to support the sub-national reporting of NEITI from where we can measure the actual impact of implementing the EITI in the country,'' Nwadishi, who is also civil society representative on the NEITI Board, said.

While calling on all stakeholders to join hands to surmount the challenges facing Nigeria's extractive sector, Nwadishi highlighted the main issues to include the passage of the Petroleum Industry Bill (PIB).

Also baring his mind on the issue, the Country Director of Pact Nigeria, Dr.AuduLiman, noted that several challenges still needs to be addressed if the average Nigerian is to benefit adequately from the God given resources in the country.

The audit according to NEITI, will lay emphasis on the application and utilisation of the funds by the various beneficiaries at the Federal, State and Local Governments. The scope of the audit will cover the 13 per cent derivation and relevant institutions that directly receive allocation from the federation account. It is expected to review policies and procedures on the disbursement and utilisation of extractive revenue funds by the three tiers of government.

Agencies to be covered by the audit include the Niger Delta Development Commission (NDDC), the Petroleum Development Technology Fund (PDTF), and the Central Bank of Nigeria (CBN. The Audit will also investigate the administration and application of excess crude oil accounts, the 13 per cent derivation, allocation to States and LGA as well as ecological funds operations.

Giving details of the audit, the Executive Secretary of NEITI, Zainab Ahmed, stated that 'during the exercise, NEITI audit will specifically ask questions and seek answers for details of receipts into the federation account from the oil and gas, mining sector, validate allocations to Federal, State and LGA's made from Federation Account and Allocation Committee (FAAC). The exercise will also establish the balance in the federation account during the period under review, 2007 to 2011.

'NEITI is also to appraise, analyse and validate any deductions made from the funds before allocation by FAAC and seek justifications for such deductions.  The federal government budget for each year showing the amount projected to be received from the oil and gas sector in particular will be examined against the budget to each entity,' she added.

She explained that the audit will provide enough information and data required to restore the trust of Nigerian citizens in governance process and rebuild institutional confidence between the three tiers of government.

'It is also an important step in the desire by NEITI to ensure that huge revenues from the natural resources in our country are used to uplift the people through grass-root based development in all nooks and crannies of the nation,' she said.

Ahmed further called on agencies and tiers of government to be covered by the audit to open their doors and books to NEITI auditors in the overall interest of the nation, while assuring that the exercise will be carried out with independence, integrity and professionalism.

Owing to the relevance of the audit to the development of the economy and its expected impact on Nigerians, the World Bank has pledged to support NEITI in the conduct of the audits scoping study.

The promise was made by the World Bank Country Director for Nigeria, Marie Francoise Marie-Nelly, when she paid a courtesy call on the Chairman of NEITI,LedumMitee, at the NEITI Secretariat in Abuja recently.

Marie-Nelly was in company of Lead Economist, John Litwack, the Procurement Consultant Chief, Bayo Awosemusi and Amanda LumunFeese, the Extractive Industries Specialist, of the World Bank.

The World Bank also promised to consider the request of NEITI to assist in the conduct of a study on the metering infrastructure in the oil and gas sector, noting that the lack of an authentic study in this regard has deprived the nation of huge revenue in taxes and royalty calculations.