Nigeria


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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. Nigeria's hydrocarbons sector is at a crossroads as the current administration attempts to pass the controversial Petroleum Industry Bill.


Nigeria's Performance on the Resource Governance Index

Nigeria received a "weak" score of 42, ranking 40th out of 58 countries. Relatively strong performance on the Institutional & Legal Setting component contrasted with a poor Enabling Environment score.

Rank
(out of 58)
Score
(out of 100)
40 Composite Score 42
22 Institutional & Legal Setting 66
Freedom of information law 100
Comprehensive sector legislation 67
EITI participation 100
Independent licensing process 67
Environmental and social impact assessments required 50
Clarity in revenue collection 50
Comprehensive public sector balance 22
SOC financial reports required 100
Fund rules defined in law 0
Subnational transfer rules defined in law 100
42 Reporting Practices 38
Licensing process 50
Contracts 0
Environmental and social impact assessments 0
Exploration data 33
Production volumes 50
Production value 100
Primary sources of revenue 75
Secondary sources of revenue 20
Subsidies 67
Operating company names 33
Comprehensive SOC reports 50
SOC production data 33
SOC revenue data 0
SOC quasi fiscal activities 0
SOC board of directors 50
Fund rules 0
Comprehensive fund reports 0
Subnational transfer rules 100
Comprehensive subnational transfer reports 100
Subnational reporting of transfers 0
31 Safeguards & Quality Controls 53
Checks on licensing process 22
Checks on budgetary process 44
Quality of government reports 47
Government disclosure of conflicts of interest 100
Quality of SOC reports 67
SOC reports audited 22
SOC use of international accounting standards N/A
SOC disclosure of conflicts of interest 100
Quality of fund reports 0
Fund reports audited 33
Government follows fund rules 0
Checks on fund spending 0
Fund disclosure of conflicts of interest 100
Quality of subnational transfer reports 100
Government follows subnational transfer rules 100
44 Enabling Environment 18
Corruption (TI Corruption Perceptions Index & WGI control of corruption) 19
Open Budget (IBP Index) 23
Accountability & democracy (EIU Democracy Index & WGI voice and accountability) 27
Government effectiveness (WGI) 11
Rule of law (WGI) 11
Satisfactory Weak
Partial Failing
To explore all data and compare
scores, use the RGI Data Tool.

Institutional & Legal Setting (Rank: 22nd/58, Score: 66/100) learn more

Nigeria's "partial" score of 66 reflects substantial public access to information but incomplete revenue disclosure policies.

The minister of petroleum resources grants licenses for oil exploration, while the Department of Petroleum Resources, under the minister, oversees the licensing process and regulates the sector.

Nigeria's tax agency receives taxes on petroleum profits and other hydrocarbon-related levies, while the Department of Petroleum Resources collects rents, royalties, license fees, bonuses, and other payments. Some revenues bypass the treasury and are not reported to the legislature. Nigeria adopted a Freedom of Information Act in 2011.

Reporting Practices (Rank: 42nd/58, Score: 38/100) learn more

A lack of contract transparency and incomplete reporting on most aspects of the petroleum industry led to a "failing" score of 38.

The Petroleum Resources Ministry publishes little information on the upstream licensing process, fiscal and production arrangements, contracts, environmental impact assessments, or operational data. 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. The central bank regularly publishes information on production volumes, prices, the value of crude oil exports, production costs, production streams value, royalties, and special taxes. Nigeria's 2012 Extractive Industries Transparency Initiative report covers the 2009-2011 fiscal years and includes comprehensive information on industry operations and disaggregated revenue streams.

Safeguards & Quality Controls (Rank: 31st/58, Score: 53/100) learn more

Nigeria's "partial" score of 53 is a reflection of incomplete government monitoring but substantial conflict-of-interest disclosure requirements.

The minister of petroleum resources exercises wide discretion in awarding licenses, despite a policy of open bidding, and the legislative branch has limited oversight of the process.

The Office of the Auditor General for the Federation is statutorily responsible for conducting periodic audits of public accounts; audits are published but are at least two years old. Audits of the state-owned Nigerian National Petroleum Corporation (NNPC) have never been disclosed.

Enabling Environment (Rank: 44th/58, Score: 18/100) learn more

Nigeria received a "failing" score of 18, the product of particularly poor rankings on government effectiveness and the rule of law.


State-Owned Companies (Rank: 23rd/45, Score: 47/100) learn more

The NNPC owns a majority share of the six substantive joint ventures currently operating in Nigeria. The company operates as an autonomous entity, with little or no information available on its finances, internal controls, or quasi-fiscal obligations. Its controversial administration of fuel subsidy payments resulted in an estimated $13 billion in losses between 2006 and 2011.

Natural Resource Funds (Rank: 18th/23, Score: 17/100) learn more

Nigeria created a Sovereign Wealth Fund in May 2011. It received $1 billion in seed money from the state but is not yet operational. The Excess Crude Oil Account currently receives revenues directly from oil extraction. Structurally, the central bank and the Finance Ministry oversee the account; in practice, the president has substantial control over deposits and withdrawals. There are no published rules about the account's operations, and information on its assets and transactions is not available. The Office of the Auditor General for the Federation examines the fund's financial reports, but they are not published.

Subnational Transfers (Rank: 7th/30, Score: 83/100) learn more

Oil-producing states receive 13 percent of revenues from the oil produced in their state, in addition to standard revenue allocations. The Finance Ministry publishes regular reports on the transfers. The government appears to follow the rules for resource revenue sharing established by legislation.

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