The Resources Governance Index of the Revenue Watch Institute (RWI) has ranked Nigeria weak in its oil revenue. Report of the Institute for 2013 released yesterday in the United States said Nigeria’s hydrocarbons sector is at a crossroads as a result of the current efforts to pass the Petroleum Industry Bill. The report ranked Nigeria 40 out of 58 countries studied.
The Index, which is one of the key global performance indicators, measures the transparency and accountability in the oil, gas and mining sector of 58 countries worldwide and finds that the vast majority surveyed fail to meet satisfactory standards on how their natural resources are governed.
In these countries, opacity, corruption and weak processes keep citizens from fully benefiting from their countries’ resource wealth, according to the report.
For Nigeria, the Index relatively shows strong performance on the institutional and legal setting component contrasted with a poor enabling environment.
According to the report, in 47 of the 58 Index countries, governments have yet to embrace openness and accountability.
Together, these 58 nations produce 85 percent of the world’s oil, 90 percent of diamonds and 80 percent of copper, generating trillions of dollars annually.
Nigeria is Africa’s largest oil exporter, and the world’s 10th largest oil producer, accounting for more than 2.2 million barrels a day in 2011. Oil revenues totaled $50.3 billion in 2011 and generated 70 percent of government revenues.
A weak point for the country shows lack of contract transparency and incomplete reporting on most aspects of the petroleum industry.
According to the report, the Petroleum Resources Ministry publishes little information on the upstream licensing process, fiscal and production arrangements, contracts, environmental impact assessments, or operational data. It said: “It publishes no reports on revenues. In contrast, the Finance Ministry publishes information on production volumes, prices, the value of resource exports, estimates of investment in exploration and development, production costs, costs of subsidies, production stream values, royalties, special taxes, and the government’s share in production sharing contracts.