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The Board agreed that Nigeria has made meaningful progress overall in implementing the 2016 EITI Standard.

Outcome of the Validation of Nigeria.

Decision reference
2017-02 / BC-224
Decision basis
2016 EITI Standard, Requirement 8.3 EITI Validation deadlines and consequences

Board decision

The Board took the following decision regarding Nigeria's status:

The Board agrees that Nigeria has made meaningful progress overall in implementing the 2016 EITI Standard. In taking this decision the EITI Board commended the efforts of the Nigerian National Stakeholders’ Working Group (NSWG) to play a proactive role in the national natural resource governance debate and to follow up on recommendations from the EITI reporting process. The EITI Board also noted the NSWG’s active engagement with stakeholders such as the Nigerian National Petroleum Corporation (NNPC) to increase the impact of implementation, as well as the efforts to go beyond the EITI’s requirements on bringing transparency to in-kind revenues. The EITI Board highlighted that the EITI has provided a positive platform for discussion and debates about oil and gas sector management, involving stakeholders and the wider public. The EITI Board was encouraged by the government’s efforts to make government systems more transparent and accountable and urged the NSWG to work towards further mainstreaming EITI disclosures.  

The Board’s determination of Nigeria’s progress with the EITI’s requirements is outlined in the assessment card, below. The EITI Board agreed that Nigeria had not made satisfactory progress on requirements 1.3, 1.4, 1.5, 2.2, 2.3, 2.4, 2.6, 3.2, 3.3, 4.1, 4.3, 4.4, 4.6, 4.8, 4.9, 5.2, 6.1, 6.2 and 6.3. The major areas of concern relate to civil society engagement (#1.3), MSG governance (#1.4), workplan (#1.5), license allocations (#2.2), license registers (#2.3), contract disclosure (#2.4), state participation (#2.6), including quasi-fiscal expenditures (#6.2), production data (#3.2), export data (#3.3), comprehensiveness (#4.1), barter and infrastructure agreements (#4.3), transport revenues (#4.4), direct subnational payments (#4.6), data timeliness (#4.8), data quality (#4.9), subnational transfers (#5.2), social expenditures (#6.1) and contribution to the economy (#6.3). The EITI Board disagreed with the validator on the following requirements: company engagement (#1.2), workplan (#1.5) and in-kind revenues (#4.2).

Accordingly, the EITI Board agreed that Nigeria will need to take corrective actions outlined below. Progress with the corrective actions will be assessed in a second validation commencing on 11 July 2018. Failure to achieve meaningful progress with considerable improvements across several individual requirements in the second Validation will result in suspension in accordance with the EITI Standard.  In accordance with the EITI Standard, the Nigerian National Stakeholders Working Group may request an extension of this timeframe, or request that Validation commences earlier than scheduled.

The Board’s decision followed a Validation that commenced on 1 July 2016. In accordance with the 2016 EITI Standard, an initial assessment was undertaken by the International Secretariat. The findings were reviewed an Independent Validator, who submitted a Validation Report to the EITI Board. Nigeria’s National Stakeholders Working Group was invited to comment throughout the process. The National Stakeholders Working Group’s comments on the report were taken into consideration. The final decision was taken by the EITI Board.

Corrective actions and strategic recommendations

The EITI Board agreed the following corrective actions. Progress in addressing these corrective actions will be assessed in a second Validation commencing on 11 July 2018:

  1. In accordance with requirement 1.3a, the NSWG should ensure that civil society is fully, actively and effectively engaged in the EITI process. In accordance with requirement 1.3eii, civil society should ensure that civil society organisations outside the multi-stakeholder group are substantially engaged in the design, implementation, monitoring and evaluation of the EITI process.

In accordance with requirement 8.3.c.i, the civil society constituency is requested to develop and disclose an action plan for addressing the deficiencies in civil society engagement documented in the initial assessment and validator’s report within three months of the Board’s decision, i.e. by 11 April 2017.

  1. In accordance with requirement 1.4.a.ii, the NSWG should ensure that its procedures for nominating and changing multi-stakeholder group representatives are public and confirm the right of each stakeholder group to appoint its own representatives. In accordance with requirement 1.4.b.ii and 1.4.b.iii, the NSWG should undertake effective outreach activities with civil society groups and companies, including through communication such as media, website and letters, informing stakeholders of the government’s commitment to implement the EITI, and the central role of companies and civil society. Members of the NSWG should liaise with their constituency groups. In accordance with requirement, the NSWG should ensure an inclusive decision-making process throughout implementation, particularly as concerns industry.
  2. In accordance with requirement 1.5.a, the NSWG should maintain a current work plan that sets EITI implementation objectives that reflect national priorities for the extractive industries. In accordance with requirement 1.5.b, the work plan must reflect the results of consultations with key stakeholders. In accordance with requirement 1.5f, the NSWG should ensure that the work plan is reviewed and updated annually.
  3. In accordance with requirement 2.2.a, the government should ensure annual disclosure of which mining, oil, and gas licenses were awarded and transferred during the year, including in the Nigeria- São Tomé and Príncipe Joint Development Zone, highlighting the technical and financial requirements and any non-trivial deviations from the applicable legal and regulatory framework governing license awards and transfers. In accordance with requirement 2.3, the government should also ensure that the dates of application and coordinates for all oil, gas and mining licenses are publicly available.
  4. In accordance with requirement 2.4, the NSWG should document the government’s policy on disclosure of contracts and licenses that govern the exploration and exploitation of oil, gas and minerals. This should include relevant legal provisions, actual disclosure practices and any reforms that are planned or underway. The next EITI Reports should provide an overview of the contracts and licenses that are publicly available, and include a reference or link to the location where these are published.
  5. In accordance with requirement 2.6, the NSWG should provide an explanation of the prevailing rules and practices related to SOEs’ retained earnings and reinvestment. The government should also ensure annual disclosure of any changes in government ownership in SOEs or their subsidiaries, and provide a comprehensive account of any loans or loan guarantees extended by the state or SOEs to mining, oil, and gas companies. In accordance with requirement 6.2, the NSWG should consider the existence and materiality of any quasi-fiscal expenditures undertaken by SOEs and subsidiaries in the extractive industries and ensure that all material quasi-fiscal expenditures are disclosed.
  6. In accordance with requirements 3.2 and 3.3, the NSWG should ensure future EITI Reports provide disaggregated production values as well as export volumes and values for all key minerals produced including crude oil and natural gas.
  7. In accordance with requirement 4.1.b, the NSWG should ensure that future EITI Reports clearly include all revenue streams listed under requirement 4.1.b in the scope of reconciliation. In accordance with requirement 4.1.c, the NSWG should also ensure that the Independent Administrator assesses the materiality of non-reporting companies and government entities as well as provide its opinion on the comprehensiveness and reliability of the EITI Report.
  8. In accordance with requirement 4.3, the NSWG should assess the existence of infrastructure provisions in oil and gas contracts during the scoping phase to ensure that companies’ disclosures are categorised according to strict definitions.
  9. In accordance with requirement 4.4, the NSWG should assess the materiality of any transportation revenues and disclose such revenues should they be assessed as material.
  10. In accordance with requirement 4.6, the NSWG should assess the materiality of direct subnational payments and ensure that any material direct subnational payments are reconciled.
  11. In accordance with requirement 4.8.b, the NSWG should ensure that data in EITI Reports be no older than the second to last complete accounting period, e.g. an EITI Report published in calendar/financial year 2016 must be based on data no later than calendar/financial year 2014.
  12. In accordance with requirement 4.9.b.iii and the standard Terms of Reference for the Independent Administrator agreed by the EITI Board, the NSWG and Independent Administrator should:
  1. examine the audit and assurance procedures in companies and government entities participating in the EITI reporting process, and based on this examination, agree what information participating companies and government entities are required to provide to the Independent Administrator in order to assure the credibility of the data in accordance with Requirement 4.9. The Independent Administrator should exercise judgement and apply appropriate international professional standards[1] in developing a procedure that provide a sufficient basis for a comprehensive and reliable EITI Report. The Independent Administrator should employ his/her professional judgement to determine the extent to which reliance can be placed on the existing controls and audit frameworks of the companies and governments. The Independent Administrator’s inception report should document the options considered and the rationale for the assurances to be provided.
  2. ensure that the Independent Administrator provides an assessment of comprehensiveness and reliability of the (financial) data presented, including an informative summary of the work performed by the Independent Administrator and the limitations of the assessment provided.
  3. ensure that the Independent Administrator provides an assessment of whether all companies and government entities within the agreed scope of the EITI reporting process provided the requested information. Any gaps or weaknesses in reporting to the Independent Administrator must be disclosed in the EITI Report, including naming any entities that failed to comply with the agreed procedures, and an assessment of whether this is likely to have had material impact on the comprehensiveness and reliability of the report.
  1. In accordance with requirement 5.2.a, the NSWG should assess the materiality of subnational transfers prior to data collection and ensure that the specific formula for calculating transfers to individual states and Local Government Areas be disclosed, to support an assessment of discrepancies between budgeted and executed subnational transfers.
  2. In accordance with requirement 6.1.a, the NSWG should agree a clear distinction between mandatory and voluntary social expenditures prior to data collection. Where beneficiaries of mandatory social expenditures are a third party, i.e. not a government agency, the NSWG should ensure that the name and function of the beneficiary be disclosed.
  3. In accordance with requirement 6.2, the NSWG should agree on a reporting process on quasi-fiscal expenditures from state owned enterprises with a view to achieving a level of transparency commensurate with other payments and revenue streams, including subsidiaries of state-owned enterprises and joint ventures.
  4. In accordance with requirements 6.3, the NSWG should ensure that the size of the oil and gas sector in absolute terms, the solid mineral sector’s share of government revenues in relative terms, the value of oil and gas exports in absolute and relative terms and the size of solid minerals employment in absolute terms for the year(s) under review.

The NSWG is encouraged to consider the other recommendations in the Validator’s Report and the International Secretariat’s initial assessment, and to document the NSWG’s responses to these recommendations in the next annual progress


[1] For example, ISA 505 relative to external confirmations; ISA 530 relative to audit sampling; ISA 500 relative to audit evidence; ISRS 4400 relative to the engagement to perform agreed-upon procedures regarding financial information and ISRS 4410 relative to compilation engagements.

Scorecard for Nigeria: 2017

Assessment of EITI requirements

  • Not met
  • Partly met
  • Mostly met
  • Fully met
  • Exceeded
Scorecard by requirement View more Assessment View more

Overall Progress

MSG oversight

1.1Government engagement

The government is fully, actively and effectively engaged in the design, implementation, monitoring and evaluation of the EITI process and the government appears to have a strong commitment to the implementation of EITI in Nigeria (NEITI). The NEITI Act is a powerful tool to empower the multi-stakeholder group (MSG). Although funding is a challenge, this appears to be systemic and is not indicative of a lack of government engagement.

1.2Company engagement

Companies are actively and effectively engaged in the EITI process, but only mostly as providers of information. The NEITI Act of 2007 provides an enabling legal environment for EITI reporting and there do not appear to be legal barriers to company disclosure. The MSG is working on improving engagement with the industry constituency.

1.3Civil society engagement

Civil society in Nigeria is able to engage in public debate without restraint, coercion or reprisal, and its representatives are able to operate freely in relation to the EITI process. NEITI has developed a structure to ensure that civil society representatives are able to be fully, actively and effectively engaged in the design, implementation, monitoring and evaluation of the EITI process. However, stakeholder consultations indicate that civil society on the MSG does not function as a link between the EITI and the broader constituency.

1.4MSG governance

The dual nature of NEITI as both an autonomous self-accounting body and as a secretariat supporting EITI implementation poses a number of challenges. The MSG acts more as a consultative board rather than a representative decision-making group, and there is little evidence that broader constituencies participated in the establishment of the MSG. At the same time, it is clear that NEITI and the MSG have taken internal governance seriously and has developed a number of governing documents to guide their work.

1.5Work plan

While work plans are made publicly available, there were delays in approving the 2016 work plan. The objectives for implementation have remained the same since 2012, while the scope of NEITI’s activities have expanded beyond the publication of annual audits.

Licenses and contracts

2.2License allocations

The 2013 EITI Report includes information on the petroleum license allocation and transfer procedures, but does not disclose details on technical and financial criteria used for assessing license allocations and the practice of license transfers and renewals in 2013. For mining, the 2013 EITI Report does not clarify the number of licenses awarded or transferred to material companies in the year under review, nor does it describe the actual practice of these license allocations and transfers.

2.3License register

The 2013 EITI Report provides information on petroleum licenses including names of license holders and dates of award, although license coordinates and dates of application and expiry are not included. The report provides information on mining licenses including dates of award and expiry, commodity covered and license-holder name, but not dates of application or license coordinates.

2.4Policy on contract disclosure

The 2013 EITI Reports do not clarify government policy on contract disclosure, nor any planned or ongoing reforms in this area. They do not comment on actual contract disclosure practice, despite the fact that some 31 oil and gas contracts are in the public domain.

2.1Legal framework

NEITI Reports describe the legal environment and fiscal framework for both solid minerals as well as oil and gas. The main laws are described in general terms, the main taxes are listed, the degree of fiscal devolution is clearly defined and the main on-going or planned reforms are noted.

2.5Beneficial ownership

Not assessed

The MSG has initiated discussions on beneficial ownership disclosure and Nigeria participated in the BO pilot in 2015 for its solid minerals sector. The 2013 EITI Report discloses legal owners of material companies, although there appears to be confusion over the distinction between legal and beneficial ownership.

2.6State participation

In oil and gas, the MSG has undertaken significant efforts over the past ten years to disclose information on the operation of Nigerian National Petroleum Corporation’s (NNPC, a state-owned enterprise) and its subsidiaries. The 2013 EITI Report states that state-owned enterprises (SOEs) made material payments to government and provides information on some SOEs, the rules governing financial relations between the state and SOEs both statutorily and in practice, some information on changes in state ownership and on loans contracted by SOEs. The 2013 EITI Report provides information on the transfers of NNPC shares in joint venturelicenses prior to 2013. However, the list of SOEs does not appear to be comprehensive and the report does not address any loans or loan guarantees extended by the government or SOEs to oil and gas companies.

Monitoring production

3.1Exploration data

The EITI Reports provide extensive information on the solid minerals, oil and gas sectors, including information on history, reserves, location, trade profile and significant exploration activities.

3.2Production data

Nigeria has gone beyond the requirement by not only publishing production volumes for crude oil and natural gas but also reconciling oil and gas production lifting figures. The 2013 EITI Report provided minerals production volumes for the eight most significant minerals by volume but not values.

3.3Export data

The EITI Reports provide export volumes for crude oil, natural gas and oil export values, although the value of natural gas exports is not disclosed. They also provide the export values for the three largest solid mineral exports, but only export volumes for companies included in the report.

Revenue collection

4.3Barter agreements

In oil and gas, the 2013 EITI Report discloses terms and assesses performance of barters of crude oil for refined products as well as some information on infrastructure provisions, although these infrastructure provisions may be social expenditures that have been mis-categorised. This requirement is not applicable in the solid minerals sector.

4.6Direct subnational payments

The MSG has made efforts to go beyond the requirement by publishing a standalone report, disclosing information on the management and allocation of revenues to nine states . The EITI Reports provide company disclosures of payments to state and local governments. However, the MSG does not appear to have considered the materiality of subnational direct payments and did not reconcile such payments.


The 2013 EITI Reports disclose of revenue data disaggregated by individual company, government entity, and revenue stream.

4.9Data quality

While the MSG has agreed quality assurance procedures for the 2013 EITI Report, gaps were identified in assessing data quality, including assurance mechanisms being agreed prior to the Independent Administrators’ review of auditing procedures and a lack of overview of audit procedures for companies. Procedures adopted to ensure the reliability of data in are not sufficiently described and the 2013 EITI Report does not provide an assessment of whether the payments and revenues were subject to credible, independent audit, applying international auditing standards.


The 2013 EITI Reports defines materiality thresholds for selecting material companies and revenue streams, listed material entities, described material revenue streams and identified omissions in reporting. Gaps related to documentation of changes to the materiality threshold, the list of material companies, the assessment of the comprehensiveness of the reports and full government disclosure are identified in the reports.

4.2In-kind revenues

The 2013 EITI Report provides volumes collected, sold and proceeds generated from the state’s share of in-kind revenues. The MSG has gone beyond the requirement in disclosing significant additional information on the terms of sales and buyers of Nigeria’s share of crude oil production. The requirement is not applicable in the solid minerals sector.

4.4Transportation revenues

In oil and gas, while the 2013 EITI Report describes arrangements for the transportation and storage of crude oil by joint ventures majority-owned by NNPC, there is no evidence of the MSG’s assessment of the materiality of transportation revenues. This requirement is not applicable in the solid minerals sector.

4.5SOE transactions

The 2013 EITI Report discloses SOE transactions with government including the remittance of proceeds of the sale of the state’s in-kind revenues as well as dividends by Nigeria LNG Limited (NLNG, a state-owned enterprise), highlighting deviations from statutory rules in practice. This requirement is not applicable in the solid minerals sector.

4.8Data timeliness

There appears to have been consistent delays in Nigeria’s EITI reporting. Nigeria submitted a request for a six-month extension to the reporting deadline for its 2013 EITI Reports, which were published more than five months after the 31 December 2015 deadline.

Revenue allocation

5.1Distribution of revenues

The EITI Reports clearly state which extractives revenues were recorded in the federal budget, deviations in practice from statutory rules and the use of revenues collected by federal entities not recorded in the budget.

5.2Subnational transfers

The 2013 EITI Reports provide the general formula for calculating subnational transfers, but not the actual formula used for calculating transfers to individual states and local government. Discrepancies between actual and calculated transfers are not described.

5.3Revenue management and expenditures

Not assessed

The MSG has attempted to include information on the federal budget-making process and links to some of the relevant government websites in the EITI Reports.

Socio-economic contribution

6.1Mandatory social expenditures

The 2013 EITI Report discloses mandatory and voluntary social expenditures by mining companies, both cash and in-kind. The data are not disaggregated by project and the identity of beneficiaries was not disclosed. There are no mandatory social expenditures in Nigeria in the oil and gas sector. The 2013 EITI Reports contain descriptions and some figures of voluntary corporate social responsibility projects by some companies, without being consistent and comprehensive across the oil/gas and mining sectors.

6.2Quasi-fiscal expenditures

While the 2013 EITI Report provide disclosures of quasi-fiscal expenditures undertaken by NNPC’s joint ventures, these expenditures appear to be social expenditures that have been miscategorised. While the 2013 EITI Report also discloses subsidy payments for refined products, it discloses the share covered by the Federal budget, the share retained at source by NNPC but not the share of subsidies absorbed by NNPC without compensation. Finally, the MSG does not appear to have considered other expenditures which might constitute quasi-fiscal expenditures. This requirement is not applicable for mining.

6.3Economic contribution

Most of the information on the extractive sectors’ constribution to GDP, revenue, exports and employment is provided, although some elements are missing. The report provides an overview of informal activities and of the location of activities.

Outcomes and impact

7.2Data accessibility

Not assessed

EITI Reports, and particularly their simplified versions, are accessible, provided in machine readable format, and actively disseminated.

7.4Outcomes and impact of implementation

NEITI uses the Annual Progress Reports to benchmark its strategic decisions to its overall record of achievements, identify shortcomings and look at future projections.

7.1Public debate

The MSG has taken steps to ensure that the EITI Report is comprehensible, actively promoted and publicly accessible. Through the organisation of dissemination events and workshops, NEITI has ensured that the EITI has also contributed to public debate.

7.3Follow up on recommendations

While recommendations of EITI Reports are not consistently implemented, the MSG has debated the recommendations and ensured that they are addressed by relevant government entities. The government has also established the Inter-Ministerial Task Team to steer implementation of the recommendations while legislators have formed an ad hoc committee to follow up.