The objectives of the NEITI bill are to ensure due process, transparency and accountability and eliminate all forms of corrupt practices in the extractive industry. The key concepts which need some clarification here are due process, transparency and accountability. Due process is an assurance that there has been full adherence to laid-down rules or regulations guiding budgetary, procurement and payment activity or action by all parties relevant to it. It is the design of a rapid response mechanism for ensuring fiscal transparency, strict compliance with due process, effectiveness and efficiency in costing, prioritization and execution of budget expenditure items resulting in an effective “follow-the-money” tracking process by utilizing international and Nigerian expertise, and by adapting the best of information technology.
The principle of transparency which goes with openness requires government to provide the citizen with a right to know what is going on in governance. With regards to fiscal transparency this include clarity of roles and responsibilities; public availability of information; open budget preparation, execution and reporting and independent assurances on integrity. Transparency and openness forces government to be more careful so as to stand public scrutiny. It is widely recognized that participation is a pre-condition for deep transparency and openness. Accountability places a responsibility on government to acquire the necessary ability to perform; the obligation to provide information, explanations and/or justifications and the necessity to absorb the consequences of unaccountable actions including disciplinary measures. The UNDP has delineated some principles of accountability. We can distinguish between four forms of accountability: political accountability, administrative accountability, professional accountability and democratic accountability. Political accountability requires government to act following the political and programmatic provisions adopted by the government. In practice, these positions are usually encapsulated in the annual budgets. Political accountability involves vertical accountability where officials are supervised and controlled by higher offices in accordance with the institutions’ hierarchy; and horizontal accountability which is the accountability of the executive to the legislature. Similarly, administrative accountability involves vertical accountability where inferior administrative positions account to superior positions through a wide set of internal mechanisms of control and supervision including inspectorates, audits etc; and horizontal accountability where administrative positions are accountable to citizens and oversight bodies including ombudsman. In addition, administrative accountability involves a full subject of public officials and administrative units to a wide set of constitutional, legal and administrative rules and procedures that govern tightly their performance. Professional accountability refers to the existence of a set of norms and practices of a technical and professional nature that governs the behaviour and performance of members of a certain profession. Democratic accountability is a direct relation between government and civil society where civil society takes active role in ensuring accountability through popular participation, evaluation of government project and activities. In Nigeria, the constitution places a responsibility on the media to hold government accountable.
The NEITI bill focuses on the extractive industry. This focus may not be out of place for it has been documented across the world that resource-rich countries have performed worse than those with smaller endowments leading to phenomenon that scholars now refer to as resource curse:
Countries that depend on oil for their livelihood are among the most economically troubled, the most authoritarian, and the most conflict-ridden in the world. The consequences of development based on the export of petroleum have tended to be negative during the past 40 years. Detrimental effects include slower-than-expected economic growth, poor economic diversification, dismal social welfare indicators, high levels of poverty and inequality, devastating environmental impacts at the local level, rampant corruption, exceptionally poor governance, and high incidences of conflict and war.
When compared to countries dependent on the export of agricultural commodities, mineral and oil exporting countries suffer from unusually high poverty, poor health care, widespread malnutrition, high rates of child mortality, low life expectancy, and poor educational performance- all of which are surprising findings given the revenue streams of resource-rich countries.
Due to the highly volatile nature of oil markets, oil exporting nations often fall victim to sudden declines in their per capita income and growth collapses of huge proportions. The statistics are startling: In Saudi Arabia, whose proven crude oil reserves are the greatest in the world, per capita income has plunged from $28,600 in 1981 to $6,800 in 2001. In Nigeria and Venezuela, real per capita income has decreased to the levels of 1960s, while many other countries- Algeria, Angola, Congo, Ecuador, Gabon, Iran, Iraq, Kuwait, Libya, Qatar, and Trinidad and Tobago- are back to the levels of the 1970s and 1980s. The surprisingly negative outcomes in oil- and mineral-dependent countries are referred to as the “resource-curse.”
Scholars have shown clearly the linkage between overdependence on oil exports and the production of weak public institutions, authoritarianism, corruption, conflict and primitive accumulation of wealth through collection of bribes and contract inflation:
Overdependence on oil exports is strongly associated with weak public institutions that generally lack the capacity to handle the challenges of petroleum-led development …the influx of rents from petroleum tends to produce a rentier state-one that lives from the profits of oil. In rentier states, economic influence and political power are especially concentrated, the lines between public and private are very blurred, and rent seeking as a strategy for creating wealth is rampant. Rulers tend to stay in power by diverting revenues to themselves and their supporters…authoritarian rulers use petrodollars to keep themselves in power, prevent the formation of opposition groups and create vast militaries and repressive apparatuses…As a group, oil exporting countries are significantly more corrupt than the world average (even if Canada and Norway are included). Nigeria, Angola, Azerbaijan, Congo, Cameroon, and Indonesia compete for the position of the “most corrupt” in the annual ratings of Transparency International…policy makers in oil-exporting countries tend to favour mega-projects in which payoffs can be more easily hidden and the collection of bribes facilitated, while eschewing productive long term investments that are more transparent…petroleum is more associated with civil war and conflict than any other commodity. Countries dependent on oil are more likely than resource poor countries to have civil wars; these wars are more likely to be secessionist, and they are more likely to be of even greater duration and intensity compared to wars where oil is not present. Oil may be the catalyst to start a war; petrodollars and pipeline may serve to finance either side and prolong conflict.
Despite this negative proposition, it is necessary to point out that over the past decade, there is an increased understanding of the problem and what needs to be done to turn resource curse into resource blessing. Interestingly, there are some resource-rich countries with stories of success. For instance, in the 1970s, Indonesia and Nigeria had comparable per capita incomes and both countries were heavily dependent on oil revenues. In the early 2000s, Indonesia’s per capita income was four times that of Nigeria and Nigeria’s per capita had actually fallen from US $302.75 in 1973 to US $254.26 in 2002. Similarly, Botswana is rich in Diamonds and had an average growth rate of 5.2 percent between 1974 and 2002. But in Nigeria, annual per capita GDP remained stagnant in the 1990s and grew by only 2.2 percent from 1999-2003. Furthermore, the United States, Canada, Australia, Chile and Norway are resource rich countries that have made significant progress in human development. The challenge therefore is how to turn the resource curse into resource blessing.
We have argued elsewhere that in order to reduce and ultimately eradicate poverty, it is necessary to have a more naunced understanding of poverty, participation of the poor, empowerment of the poor, good governance, transparency and accountability, combat gender inequity and children vulnerability, promote rights based approach and pro-poor policies. Meanwhile, it has been documented that the main reason why poverty has remained widespread in Nigeria is lack of transparency and accountability. Therefore, the NEITI meant to promote transparency and accountability will contribute to poverty reduction. It is our contention that civil society has great roles to play to make this to happen. In our view, CSOs can play two key roles with respect to the NEITI bill to improve transparency and accountability. The first is to assist in the performance of the functions of the bill. In this respect, CSOs can assist in the development of a framework for transparency in reporting and disclosure by extractive industries of revenues due to or paid to the Federal government as well as monitoring and evaluation of the practices of extractive industries.
The second aspect of the role of CSOs is to utilise the NEITI bill as an entry point for advocacy for transparency and accountability in Nigeria. In this regard, CSOs advocacy can go beyond the remit of the NEITI bill which has been criticised in many respects. For instance, the NEITI bill has been criticized for taking a narrow conception of accountability taking into cognizance fiscal accountability without dealing with other forms of accountability. Furthermore, proper accountability goes beyond mere reporting and disclosure. There is no monitoring of the expenditure of moneys or payment received by extractive industries. In addition, there is no provision for a process whereby CSOs can have input into who represents them at the NSWG.
ENDNOTES
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Dr. Otive Igbuzor is a Pharmacist, Human Rights Activist, Policy Analyst, Development Expert, and author who is a reader’s delight. His authored works are always enchanting, interesting and yet very impactful. His books have been instrumental to building a new breed of leaders capable of advancing Africa out of the woods of socio-economic and political decadence.
