IDEAS Radio 6 December 2019
Waziri Adio: General Secretary of NEITI
Aghogho Oboh: Alright welcome, welcome, it is eleven minutes past four, I am Aghogho Oboh, and this is the Public Square! A hot humid afternoon, and I understand traffic building in several parts of Lagos, on the Island, on the Mainland, but it’s typical of a usual Friday. And on Public Square, we’re discussing big issues. Lots happened this week and we will be delving into a number of them straightaway. You know Public Square begins with the IDEAS segment. Ayo Obe is here and she will be looking at the Nigeria Extractive Industries Transparency Initiative which has released a report. Executive Secretary Waziri Adio is on standby and we will be on to him soon.
But a number of things we’re also going to be looking at on Public Square, I’ll let you into them. Just a tip of the iceberg: Omoyele Sowore, former Presidential candidate, publisher of Sahara Reporters has been arrested by the DSS. Former Governor of Abia State, Senator Orji Uzor Kalu over a decade later he’s been convicted on corruption charges, and SERAP, legal victory in the case against former Governors who are now Senators and receiving pensions, saying they retain those monies, is something we will be looking at too. Follow the programme on Twitter @PublicSquareNG, @ideasradiong, @NigeriaInfoFM, @Aghogho, @RotimiSankore. Tweet at us on any of those handles, on WhatsApp 08095975805. So, over to Ayo on IDEAS.!
Ayo Obe: O, thank you very much Aghogho, and today we’re actually … I’m always saying that in IDEAS radio, Integrity, Democracy, Ethics and Accountability … we are always trying to accentuate the positive part of the anti-corruption struggle in Nigeria. As you know, next Monday is going to be Anti-Corruption day in the country. So, instead of always looking on the negative side, we want to look and see what are the positive things that are being done to improve transparency and accountability in Nigeria’s public space. And that’s why I’m particularly glad to have as my guest on the programme Mr. Waziri Adio, who is the Executive Secretary of the Nigerian Extractive Industries Transparency Initiative. I don’t know if he’s on the line? Waziri, are you there?
Waziri Adio: Yes please.
AO: Hi Waziri, thank you very much.
WA: Thank you.
AO: So, we are really … I think the first thing that we need to perhaps establish is: What exactly is the point of NEITI? How does it fit in with the issue of Accountability in Nigerian public finances?
WA: Ok. Thank you very much. NEITI is a part of a global movement which started in 2003. And Nigeria joined that same year, and commenced implementation in 2004. The idea behind EITI generally, is that countries that are well endowed with natural resources do not do as well as they should on account of their endowment, but, worse than that, they actually do … they underperform compared to countries that are not similarly endowed. So on the basis of that, scholars and observers and others started talking about ‘resource curse’, that resources, rather than translating benefits … translating to curses for the country. They found out that when you are looking at the developed countries in the world, they are rarely countries are resource-intensive, they are rarely countries that depend on natural resources for their development, but when you are looking at the countries that are troubled in different ways, either in terms of high incidence of corruption, high incidence of violence, poverty and all of that, it’s usually countries that are well endowed. And when people talk about these countries, and talk about ‘resource curse’, in most instances they use Nigeria as the prime example.
AO: Yes. That is, of a country which is being blessed with resources, particularly petroleum, and yet is underperforming, is not transferring the benefits of those resources to its countries … citizens.
WA: Yes. So Nigeria is usually used as a prime example of such a country. And by the way, it’s not only petroleum resources, not only oil and gas that we have. We also have mineral endowments across the country. And … but when you look at our development indicators, they do not … they do not give any sense that this is a country that is well endowed. Rather, you are talking about high incidence of poverty whichever way you look at it, whether you’re looking at per capita income, whether you are looking at the level of infrastructure development and all of that. So the idea of EITI is to ensure that, to change the narrative. One, to say that it’s not the resources that are cursed, it’s what people do when they are so endowed, it’s what the endowment predisposed policy-makers … to. And a way of changing that, is to ensure that the resources are managed in a transparent and accountable manner. And by the way, it’s not all the countries that are well-endowed that are prone to poverty and corruption and all of that. There are countries like Norway, there are countries like UAE, like Malaysia and all that, that have done well. There are countries like Mauritius, even in Africa, that have done well … Botswana rather … that have done well with their natural resources. So the idea is: what can we learn from those that have done well with their natural resources? What can we do …
AO: But before we get to the issue of learning, because I’m a bit focused on this issue of transparency. It’s a Transparency Initiative. What level of transparency are you able to achieve with regard to the income that Nigeria gets from its oil? How do you get … how is the transparency achieved?
WA: Ok, if you look at it before Nigeria joined EITI, the people who do not operate in the sector had very little idea about what was going on. It was a sector that was so opaque, and almost run like a secret cult. But with the coming of NEITI at least for … since 199… since 2005, we’ve had reports out there, about what companies are paying to government for different purposes from the extractive sector, and what government is receiving from companies for different purposes, and that information is reconciled and put in the public domain. Now, people have information that they can … at least, they can discuss, they can debate, and they can begin to look at: So how are these resources being applied? And to ensure that …
AO: But let me ask, because you see, at the end of the day, whatever the resources a Government is supposed to produce a budget, present it to the National Assembly, or if it’s at the State level, present it to the State House of Assembly. And it’s that budget which is supposed to be implemented. But, so what is the link between telling us how much money we are actually getting? Is the situation about what was coming into government now more transparent? Is it that the government was concealing what it was getting? Or was it that the oil companies were concealing what they were supposed to be paying? I mean, where was the opacity? Or was it all over?
WA: Well, the … you know when there’s no transparency, that provides a cover for all sorts of things to happen. You know, there’s this popular saying that: Sunshine is the best disinfectant. The more things are done in the open, the less the tendency for sharp practices and bad behaviour. So, now before, we didn’t even have an idea of how much we were making, and how much government was receiving, how much companies were paying and whether they were paying the right amount that they should be paying. So what has happened over time, is that at least that information is there. And it is not just that information, we also have information about what is not being properly done and what needs to be fixed. The upshot of this is that government should get more revenue, but also, citizens will have information that they can use to hold both the companies and the government to account, to make sure that … the society gets a fair shake from the resources …
AO: But is that the use that citizens have really been making of the information?
WA: Sorry, can you say that again?
AO: Is that the use that the citizens have been making of the information that NEITI puts out?
WA: Yes! You see prior to 2005, 2006, people were just … you could just speculate about what was going on. But you know, consistently, religiously, NEITI has been putting this information out there. NEITI has also been engaging with citizens and civic groups, the media and others, to let them know how to use this information. Because you can be putting information out there, and people do not even understand it. So we have invested a lot and we spent a lot of time in building capacity, in making sure that people can make sense of these figures, and people can ask the right questions. And the fact that both the government and the companies know that people are watching them, and people are more aware of the issues, also puts them under pressure to do things properly. It’s a very simple exercise: What did you pay, what did you receive? Ordinarily there shouldn’t be any discrepancy, but there has been over time. And that … a lot of things have come into the public domain which have also fed into the reform that government has undertaken in that sector of our … The first part of it is that government should get more money. The second part is: So how is government spending the money? So that’s the last mile of our work, to get citizens to have that information, that they can be usi… that they can use to hold government to account. They see yes, this is what we are getting, How are you applying it? And are you applying it in a way that aligns with our priorities and our needs? So we publish three reports, we started with oil and gas we have done nine of that now, covering the period 1999 till 2017, we are working on the one for 2018 presently. We have also done seven for the solid mineral sector. But there’s another report that we do which is very very important, that is the Fiscal Allocation and Statutory Disbursement Audit. That is where we look at … there are some government agencies, there are some states that are supposed to have statutory allocations, like 13%, there’s money that’s supposed to go to TETFund, that’s supposed to go to …
AO: TETFund is the … ?
WA: Tertiary Education Trust Fund, NDDC, that’s the Niger Delta Development Commission. Equaliz… what is it called? … So many other funds like that, specialised funds like PTDF, like Ecological Fund and all of that, so this is where we track. Did those monies … did the money get there? And is the money being used for what it’s supposed to be used for? This is the one that actually citizens find very useful. So, how is the money for example … Let’s pick Ecological Fund for example. How much went into Ecological Fund? And how is it used? Is it used for ecological reasons, or are they being used … is the money being used for other reasons? So this is the information that … ordinarily …
AO: Ordinary people need to have, to be able to interro … I’m going to ask … I’m going to hand you over to my co-producer Rotimi Sankore, he has a question for you as well.
Rotimi Sankore: Hello Waziri, how are you?
WA: Fine, thank you. How are you?
RS: Not too bad. Well done.
WA: Good, good. Thankyou.
RS: Two questions. One is: What kind of money are we talking about in extractive industries? Just total over all, either annual, or cumulative?
AO: Do you mean petroleum and all of … all the industries in total?
WA: Let me try and mention the figures, let me just put some things in perspective. The first one is that up to recently, government budget was being funded up to like 80% of government budget from the oil and gas sector. And now it has reduced to 60%. This is still a significant section of our public finance …
AO: Can I just understand. If NEITI is … shining a light on money that otherwise was going missing, how is … and the … how is it that the government is now getting less of its income from … from Extractive Industries?
WA: Ok, let me …
AO: Is it that the pie is bigger, or is it that the …
WA: Two things are happening. The first one is that the percentage contribution by the oil and gas sector is reducing, reducing in a way that is also positive in the sense that the non-oil sector is growing. Before, we used to depend … government revenue … 90% of government revenues used to come from oil and gas sector. Now it is coming to 60% which is good for us, which also makes us less dependent on money from the oil sector. The reason why we need to be less dependent on it is that, you know the commodity market is prone to boom and bust cycles, prices go up, they come down. And because they usually fluctuate, when prices go down, and if that is the only thing that you are depending on, you are going to be badly hit. So, but what we have done over time in this country, is to grow the non-oil sector, so that is why it is …
RS: Sorry, Waziri there’s a question I’m trying to get from you …
WA: I will answer your question.
RS: … answer I’m trying to get from you. Last year, for instance, roughly how much did Nigeria make from extractive industry?
WA: I don’t have the figure for last year because we’re still working on that, but the figure for 2017 was $24 billion.
RS: $24 billion.
AO: That’s United States Dollars.
WA: Yes, that’s according to the last NEITI Audit Report.
RS: Ok. And has there been any issue with remittance to government? I mean, has some money disappeared somewhere on the way?
WA: Er … you see, when we started, there used to be issues of non-remittance, or not paying the exact amount that should be paid, but over time, some of these things have improved. There’s better compliance now, which is also one of the things to be said for transparency: if they know that somebody is watching them on behalf of the citizens who are actually the real owners of these resources. So NEITI is watching them. NEITI comes out with this report, and over time, we have seen improvement in terms of compliance. We have also seen improvement in terms of reduction in terms of discrepancy, sometimes the figure that the government will give you will be different from the figures that the companies will give you, but that has narrowed down considerably
AO: Higher or lower, I wonder …?
RS: One last quick question about our Sovereign Wealth Fund. I mean, you mentioned other countries. So I know a country like Norway, I mean, their’s is worth about $1 trillion, last that I researched. How much is Nigeria’s worth? Is that … is it transparent? Because even I don’t know how much our own fund is worth.
WA: Ok, let me say it this way. We have three funds that we use to save money for the rainy day, right? We have one that is the 0.5% stabilization fund: whatever money that goes to the Federal Government, there is 0.5% that is put aside to stabilize in case there’s fall in revenue, right? So there’s that one. There’s also the Excess Crude Account, which is where we save whatever is beyond the budgeted price … for oil, right? But because the Excess Crude Account is an extra … extra-constitutional provision, so it’s just a place where you save money, then … the owners of the money, that means the Federal Government and the State Governments, any time they need the money, they draw down on it.
RS: Sorry Waziri, my apologies that I have to rush you, we’re running out of time, and we have to take ads, but, all the three together, how much?
WA: The last time I checked it was $3.8 billion. That was the last time.
RS: Three point …?
AO: …Eight billion
WA: … Eight billion
RS: Three point …
AO: Three point eight
WA: The one that’s the real Sovereign Wealth Fund, is the … that’s the one that is managed by the Nigerian Sovereign Investment Authority, that’s a little above $2. something billion …
AO: Waziri, I can see that we’re going to have to bring you back. In fact we’re going to have to bring you in person to our studio, because the IDEAS …
RS: We need to know how Norway has made $1 trillion, one trillion dollars,
AO: It has hardly any people, they have a handful of people
WA: … 8 million people in Norway,
AO: And as we say, how many are they?
WA: 5.8 million people in Norway.
AO: So Waziri, I really want to thank you on for helping us on the IDEAS segment for helping us to shed a bit of light. I’m sure that a lot of people don’t know or understand the importance of NEITI and the work that it’s doing in regard to the issue of Accountability and Transparency in Nigeria’s finances is, and that’s why I say that we’re going to have to drag you to … sorry, we’re going to have to invite you to Lagos, and sit you down here, so that you’ll be not just on IDEAS, but in the Public Square. But for now, I want to really thank you very much for joining us on IDEAS radio, and we’ll get you next time. Thank you very much.
RS: Thanks so much Waziri.
WA: Thank you so much for the invitation. I look forward to talking to you another time, thank you so much. Bye bye.
AgO: Alright, so we’re done with IDEAS.
AO: Yes, that’s it, we’re done with IDEAS. I have said goodbye. I leave you in the Public Square because I know that there are still money matters in the Public Square.
AgO: Absolutely, which is where we’re headed to straight away.
RS: The 2020 budget is next.
AO: The Federal Budget.
AO: No, I think it’s important that we make that distinction because as Waziri said, some of the money … they have to trace it and see how it’s spent.
AgO: Yes, so as the crow flies, we’re heading straight into Budget discussions right after this, so please stay with us.