NUPRC’s Demand For Full Disclosure

In a directive signed by its Chief Executive, Gbenga Komolafe, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) directed lease and licence holders operating in Nigeria’s oil and gas industry to, within seven days, submit a full list of real owners of their companies.

Specifically, NUPRC ordered the licensees to provide identities of beneficial owners, the level of ownership, and details of how they exercise control.

It went further to direct that “all relevant persons are hereby required to provide the information of persons with significant control over them: A person with significant control means any person directly or indirectly holding at least five per cent of the shares or interest in a relevant person. “Or a (person) directly or indirectly holding at least five per cent of the voting rights in a relevant person; and directly or indirectly holding the right to appoint or remove a majority of the directors or partners in a relevant person.”

NUPRC’s instruction is in line with the implementation of the beneficial ownership reporting system, which, as a statutory requirement, stresses the need for full disclosure of beneficial ownership information.

Unarguably, the oil, gas and mining sector in Nigeria is riddled with poor governance, lack of transparency and accountability consequent upon which the nation is being fleeced on a sustained basis with most of the revenue accruable to it not reaching the public coffers.

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Without a doubt, the issues of poor governance, lack of transparency and accountability in the extractive industry are of national and global concerns and since Nigeria is part of the global Extractive Industry Transparency Initiative-EITI-which has developed principles to help address the identified concerns, industry regulators must make concerted efforts in this regard. There is no point reasserting the fact that this national concern needs to be addressed promptly too because of the huge revenue the nation continues to lose in this sector.

It is pertinent to stress that because the nation is richly endowed with oil, gas and mining, the sector holds enormous potential for boosting the country’s revenue. But lack of transparency has made it practically impossible for the nation to tap the full potential of this sector.

While the oil and gas sector is on the precipice by sustained oil theft and some form of opacity, which has made it practically impossible for anyone to, with precision, say the actual volume of crude oil being explored and exported on a daily basis, the mining sector is grappling with the activities of illegal miners. These two-oil theft and illegal mining- have attendant consequences on revenue and security.

In the opinion of this newspaper, there is no better time than now for the nation to address these nagging issues considering the fact that Nigeria is facing a serious revenue challenge with debt servicing increasingly gulping a significant part of the available revenue.

We recall that only recently, the minister of finance, Zainab Ahmed, disclosed that debt servicing consumed over 80 per cent of the nation’s revenue in the last eleven months.

Even if not for the fact that Nigeria is a member of  the global EITI, whose  standards are implemented  by NEITI, the federal  government needs to accord  priority to these concerns  because of the huge revenue  loss.

Aside from being in line with the EITI practice, NUPRC’s demand for full disclosure of the licensee will afford Nigerians the opportunity to know the real players in this all-important sector of the nation’s economy.

Without any equivocation, Nigeria needs to support all concerted efforts to promote an open and accountable system in the management of extractive resources. Moreover, full implementation of contract transparency and beneficial ownership disclosures will help in ensuring that the revenues from natural resources are captured to help support national development and poverty reduction.

As key shareholders of the nation’s oil and gas resources, Nigerians need to know those they are doing business with. A full disclosure as Komolafe rightly stated, will also encourage appropriate stakeholder engagement, which is a part of Nigeria’s open government action plan.

It is unfortunate, in our view, that issues that are taken for granted in other climes require some measure of compulsion to drive in Nigeria.

This newspaper believes that the demand for full disclosure ought to have come long before now but then, as it is often said, better late than never.