By OBIAGELI UKEOMA
It is in Proverbs 10: 22 that the Bible declared: “The blessing of the Lord, it maketh rich, and He addeth no sorrow with it.” This injunction is a promise of God to mankind. However, in Nigeria and of course, Africa generally, the reverse seems to be the case because there are too many greedy people in government Corruption, the manifestation of greed, is endemic in the extractive industry.
However, in a bid to enthrone transparency in this critical sector, and following the gradual return of stakeholders’ confidence, PWYP Norway and Norwegian School of Economics (NHH), with support from Norad and Norwegian Ministry of Foreign Affairs, organised a conference on Financial Secrecy, Society and Vested Interest in Bergen, last year. The choice of the conference title was informed by the fact that secrecy in the extractive industries has really impoverished the citizens of resource rich countries, which paradoxically is the “resource curse.”
Nigeria, which is endowed with natural resources, ranging from coal, diamond, gold, limestone, iron ore etc, is a typical victim of the curse. The high level of corruption and theft due to lack of transparency, particularly the oil and gas industry, is quite alarming. The oil sector in the world has, over the years, gained notoriety as a place where corruption thrives and a few individuals drain the country of its resources, which could, otherwise, have been used for the development of the nation.
The oil resources led to massive corruption and civil strife, instead of being a blessing. It is farcical that African countries which are endowed with natural resources are poor due to lack of transparency and accountability by both the government and the companies licensed to operate in these countries. I feel duty bound, as a participant in the said conference, to share some of the views on the need for transparency, if Nigeria and Africa as a whole is to benefit from its natural resources.
Some issues in the financial secrecy include but not limited to the lawyer’s confidentiality and tax havens. The name secrecy jurisdiction is preferred to tax haven because these jurisdictions sell services to foreigners. The huge financial income made is being transferred to the parent companies’ country, thereby impoverishing the African nations and impacting them negatively. Considering the spate of corrupt practices by the government, as a result of the fact that the Nigerian economy is substantially public sector driven, mainly funded from the oil revenue, which, ultimately, remains a monopoly of government, the country loses a lot of money as a result of financial secrecy.
The resources lost, if quantified, can provide good roads, good hospitals, good schools, all social amenities in all the local governments, thereby reducing the mortality rate in the nations. Transparency, which is the watchword in the management of natural resources in Nigeria, should be imbibed by all stakeholders in the sector. As a matter of fact, it should be one of the values associated with the companies involved in the exploitation of natural resources. For corruption to be curbed, every public expenditure and income should be put in a public domain for easy access to financial users. All other transparency initiatives focus on disclosing tax payments.
The extended country-by-country reporting is the only reporting standard that requires companies to report their activities on country-by-country basis, in their host countries as well as their home countries. It is the only transparency reporting that is useful to all users of financial statements. The Nigerian government should, as a way of salvaging the country and promoting transparency in EI sector, consider the following: Avoid negotiations with companies; there should be fiscal terms in law instead of in contract; complete tax system and equal terms for all companies.
If indeed we are serious about turning Nigeria around to a productive, progressive, corruption free country where men and women, rich and poor, indigene or non-indigene, royalty or commoner, able bodied or living with disability can realise their aspirations, utilise their potentials and function maximally, we must be ready for radical changes in our ways of thinking and doing things. • Ukeoma wrote in from Lagos.