THE Africa Progress Panel has emphasised the need for African countries to better manage their vast oil and gas resource by setting out bold national agenda for strengthening transparency and accountability.
The panel, which has former Nigerian President, Olusegun Obasanjo as a member, in its 2013 progress report released recently, believed that revenues from minerals, oil and gas could help many countries fund much-needed roads, bridges, dams and other infrastructure.
The Africa Progress Panel finds it unconscionable that some companies, often supported by dishonest officials are using unethical tax avoidance, transfer pricing and anonymous company ownership to maximise their profits, while millions of Africans go without adequate nutrition, health and education.
The report details five deals between 2010 and 2012, which cost the Democratic Republic of the Congo over $1.3 billion in revenues through the undervaluation of assets and sale to foreign investors, adding that this sum represents twice the yearly health and education budgets of a country with one of the worst child mortality rates in the world and seven million pupils out of school.
Former United Nations Secretary General and Chair of The Africa Progress Panel, Kofi Anan, stated in the report: “Tax avoidance and evasion are global issues that affect us all. The impact for G8 governments is a loss of revenue. But in Africa, it has direct impact on the lives of mothers and children. Throughout the world, millions of citizens now need their leaders to step up to the mark and lead. Fortunately, momentum for change appears to be accelerating.
“Imagine an African continent where leaders use mineral wealth wisely to fund better health, education, energy, and infrastructure, too. Africa has oil, gas, platinum, diamonds, cobalt, copper, and more. If we use these resources wisely, they will improve the lives of millions of Africans.”
The Executive Director of Oxfam International, Winnie Byanyima, stated: “In 2011 exports of oil and minerals from Africa, Asia and Central and South America were over 1.4 trillion dollars. It’s more than 10 times the official development assistance provided to these same regions. We argue that if illicit capital flows could be stopped, Africa could fund its own development without need for aid.”
Meanwhile, Nigeria was poorly rated among the 58 countries assessed for management of natural resources in the global 2013 Resource Governance Index, released recently by Revenue Watch Institute (RGI).
Nigeria occupied the 40th position in the RGI’s measurement of the quality of governance in the oil, gas and mining sector of 58 countries.
The 58 countries assessed in the index produce 85 per cent of the world’s petroleum, 90 per cent of diamonds and 80 per cent of copper.
Despite this huge natural resource, in the measurement of hydrocarbon resources, Nigeria has composite score of 40, institutional and legal setting, 66, reporting practices, 38; safeguarding and quality controls, 53 and provision of enabling environment, 18.
Of the 17 sub-Saharan African countries evaluated in the RGI, Nigeria trailed behind 10 countries, which included Ghana that ranked 15th of 58, with a composite score of 63 over 100, earning a “Partial” rating. Others are Liberia, Zambia, South Africa and Morocco, which scored 62, 61, 56 and 53 respectively to also earn the “Partial” rating.
Garbon, Guinea, Sierra Leone and Egypt were also ahead of Nigeria on the scale of “Weak” rating with the first three tying at 46 over 100, while Egypt scored 43. Nigeria was only ahead of DRC, Algeria, Mozambique, Cameroun, South Sudan, Zimbabwe, Libya and Equatorial Guinea, which were in the “Failing” category.
From highly ranked countries like Norway, the United Kingdom and Brazil to low ranking countries like Qatar, Turkmenistan and Myanmar, the Index identifies critical achievements and challenges in natural resource governance.
According to the report, oil revenues for Nigeria alone in 2011 were 60 per cent higher than total international aid to all of sub-Saharan Africa.
The study, conducted by 46 researchers with expertise in the extractive industries and further reviewed by 56 independent experts across different nationalities, showed a major governance deficit in natural resources around the world with the largest deficit observed in most resource-dependent countries, including Nigeria, where nearly half a billion people live in poverty despite the resource wealth.
By Roseline Okere, May 22, 2013