Nigeria 2016 Validation

Nigeria's Validation commenced on 01 July 2016.

In January 2017, Nigeria was validated against the 2016 Standard

Validation is the EITI's quality assurance mechanism and measures the progress countries have made in meeting the requirements of the EITI Standard. For more information about the country, visit the country page on

The Board's decision

On 11 January 2017, the EITI Board came to the following decision on Nigeria's status: 

The Board agreed 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.

Nigeria's progress by requirement

The EITI Board agreed the following assessment card:

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Corrective actions

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 report.

[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.

Next Validation date

A second Validation will commence on 11 July 2018.

Impact of the EITI in Nigeria

Section 8 of the initial assessment (see Validation documentation).

Documentation of progress

Impact: According to an analysis carried out by NEITI after ten years of implementation, the greatest benefit that NEITI has contributed to the country was to “promote a culture and consensual framework for making the extractives sector more transparent and accountable” where “in the past, information on revenue and physical flows of oil and gas in Nigeria was treated as confidential.”[1] NEITI is credited with having recovered more than USD 2.4  billion for the FGN on the basis of findings of NEITI Reports.[2]

Nigeria’s 2015 EITI annual progress report highlighted that EITI information had empowered Nigerians to demand accountability in the revenues derived by the government, which had attracted greater scrutiny from industry experts, other stakeholders and international investors and generated further public demands for reform. The annual progress report also emphasized that the extension of EITI reporting to the solid minerals sector since 2011 had highlighted the sector’s potential to contribute to the national economy.  On a broader level, the report notes that NEITI activities have led to greater collaboration between the legislative, civil society, companies and government for better governance in the extractive industry sector, in particular in oil and gas.

In the 2016 EITI Progress Report[3], former NEITI Executive Secretary and current Minister of State for Budget and Planning Zainab Ahmed noted that the NEITI Act had led to other reforms such as the PIB, which provided a sound policy roadmap for a legal and regulatory framework for the oil and gas sector. The reforms at NNPC since 2015 (related to offshore processing agreements, swaps (RPEAs), subsidies and NLNG dividends) were also highlighted in this context, as “largely informed” by EITI recommendations. Other examples of ongoing internal reforms among government agencies that manage the extractive industry revenues brought upon by EITI implementation include the introduction of the Software Application Project by the NNPC and the development of the Upstream Operational Manual by the Federal Revenue Service, both of which are due to recommendations to the government agencies from findings in NEITI Reports.[4]

Sustainability: Beyond annual FGN funding ensured under the 2007 NEITI Act, the NSWG has sought to raise additional financial support for EITI implementation from various development partners.

The World Bank approved a third tranche of MDTF support for EITI implementation in Nigeria, USD 900,000 earmarked for capacity building and support for the Fiscal Allocation Statutory Disbursement (FASD) scoping study, in early 2013.[5] The agreement was counter-signed by the Accountant General to the Federation in Q3-2013.[6] The UK DfID’s FOSTER programme ended in April 2016 and was succeeded by FOSTER 2 starting in May 2016. The latter will have a focus on capacity building and implementation of the knowledge gained from FOSTER 1. There is a possibility that the remit of FOSTER 2 will encompass the solid minerals sector. FOSTER has commissioned numerous research papers on crude oil governance, industry restructuring and the Petroleum Industry Bill, sector revenue management, impact on local communities, scenarios on declining oil prices, oil theft and illegal refining, privatisation of refineries, beneficial ownership, roadmap for oil sector governance, and many others. FOSTER has documented various options for blocking leakages in the oil sector and is constantly looking for champions to drive their implementation.[7] While the African Development Bank had indicated interest in early 2013 in providing financial support to capacity building related to oil bidding rounds[8], it subsequently declined funding for NEITI in Q2-2013 due to unavailability of funds.[9] The United Nations Office on Drugs and Crime (UNODC) also expressed interest in supporting some NEITI activities in early 2013[10]. The NEITI Secretariat subsequently worked with UNODC in Q2-2013 to ensure that potential support for NEITI was aligned with UNODC work under relevant EU projects.[11] The NEITI Secretariat met with EU Ambassadors on 12 March 2013 to discuss possible funding for specific NEITI activities.[12] The NSWG Chair also reached out to the Norwegian Embassy in mid-2013 for financial support for specific NEITI activities.[13]

The NEITI Secretariat and NSWG has also consistently liaised with the Secretary to the Government of the Federation. The NSWG Chair wrote to the Presidency through the SGF requesting additional funds and undertook visits to the offices of DG Budget and SGF to explain NEITI activities and explain the request for additional funding in Q2-2013.[14] The NSWG established a four-member working group on NEITI funding at its 19 September 2013 meeting.[15] The SGF agreed to lobby the Coordinating Minister for the Economy on funding for NEITI in Q4-2013, following an unfavourable response from DG Budget.[16] The NSWG directed its Finance and General Purpose Committee to establish a framework for donors to be able to pool their financial support for NEITI, at its 11 December 2013 meeting.[17]

The NSWG has also considered means of cutting costs since 2014. Minutes show that the idea of moving the NEITI Secretariat to the new offices of the Petroleum Training Development Fund (PTDF) was mooted at the NSWG’s 27 March 2014 meeting but despite regular updates at NSWG meetings,[18] there was no resolution of this issue. At its 11 March 2016 meeting, the NSWG noted that payment for 2016 rent had not yet been paid for the current offices.[19] In total, NEITI had paid a total of over NGN 300 million in office rental as of April 2016.[20] At its April 2016 induction retreat, the new NSWG discussed the possibility of NEITI becoming financially independent of the government of Nigeria and concluded that this would require changes to the 2007 NEITI Act.[21]

Innovations and actions beyond EITI Provisions: Nigeria’s EITI Oil and Gas Reports, which from the outset included financial, physical and process audits, went beyond the minimum EITI criteria and were considered the ‘Gold standard of global EITI’ by the World Bank.[22] The physical report tracks volumes of production, lifting and exports, reconciling figures between figures from companies, NNPC and the Federal Government. The process report covers how agencies manage the sector, including licensing, pricing of government equity oil, the management of the government’s interest in joint ventures (JVs), crude oil supplies to refineries and oil imports. The financial report reconciles company payments and government revenues, including the financial revenue flows from state-owned enterprises to the Federal Government. In addition to large amounts of detailed quantitative and qualitative information about the oil and gas industry, the NEITI Reports also highlighted challenges and formulated recommendations for reform.[23]

Stakeholder views

As part of the International Secretariat’s assessment of the impact of the EITI in Nigeria in its eleven years of implementation, all stakeholders were asked why Nigeria was implementing the EITI. Several CSOs noted that before the EITI (pre-2004), no communities knew how much money the government was getting from the sector. People now had access to this type of reliable information and the level of national debate over the governance of the extractive industries had improved. This was partly seen to be due to NEITI’s work and partly to the boom in commodity prices as well as a series of scandals uncovered independently of the EITI. The number of NGOs focused on transparency has also grown, and transparency is now a regular topic of discussions among parliamentarians, companies and government officials. CSOs also noted the government used Nigeria’s compliance status as a sign of prestige, even if they were concerned over the lack of meaningful support for the process and disclosures required under the EITI Standard under the former government and amongst mid-level bureaucrats. Civil society also considered that the EITI provided them with a crucial platform for discussing issues and raising concerns about sector laws and their implementation, as well as in shaping planned reforms like the PIB or the PIGB. Several CSOs considered that Nigeria was implementing the EITI to ensure appropriate public oversight of the government’s management of extractives revenues and improve relations between companies and host communities.

Several government stakeholders confirmed the impact of EITI implementation in generating informed public debate and in providing an independent source of analysis and recommendations that was useful for policy-making. Several government stakeholders noted that Nigeria had decided to implement the EITI in 2003 when the extractive industries were opaque and at a time when the government was negotiating debt relief with the international community, which was finalised in October 2005. Demonstrating the government’s desire for proper accounting of its oil and gas revenues during these negotiations was seen as a government priority. The EITI was thus seen as a tool for improving governance of Nigeria’s oil and gas sector, particularly ahead of oil and gas block bidding rounds in 2005, 2006 and 2007.

Most industry stakeholders viewed EITI implementation through the prism of compliance, although a few representatives noted the importance of EITI in rectifying the public’s understanding of the industry’s contribution to the national economy, highlight inefficiencies in government management of the sector and improve relations with host communities. Most industry stakeholders agreed that EITI implementation had generated public debate but expressed concern over some aspects of NEITI’s analysis that they considered misinformed, for instance in areas of crude oil pricing and crude-for-refined oil swaps (RPEAs). This was also a concern raised by a specialized international civil society organization and a representative of the donor community.

Several stakeholders from government and civil society also highlighted the enactment of standalone EITI-specific legislation as one of the most important impacts of EITI implementation, which had led to other sector-specific reforms.

According to EITI Board member and former NEITI Executive Secretary Minister Zainab Ahmed, NEITI Reports have become a reference material for public demand for transparency, accountability and reforms of the oil and gas as well as the mining sectors. Many of the present reforms in the Nigerian oil sector – including the discontinuation of the oil swap arrangements, the review of fuel subsidies, the restructuring of the national oil company, the review of contracts and the management of the joint ventures – are recommendations from the NEITI reports.[24]

Conclusions, lessons learnt and recommendations

The implementation of EITI in Nigeria has had important impacts, even if there is agreement amongst stakeholders that the impact could have been even greater. Among the main impacts that stakeholders consistently pointed to were increased awareness of the sector’s revenues to the government and having a deterrent effect on corporate malfeasance through the annual auditing of financial data.

At the same time Nigeria is in some ways a victim of its own success. As information has been made increasingly available, stakeholders start to ask themselves what next. As NRGI wrote in a 2015 briefing, “the biggest obstacle that EITI implementation is yet to overcome in Nigeria is its inability to deliver poverty reduction, reduce conflict and guarantee sustainable development as anticipated in the concept that gave birth to it”.[25] If there was one thing that all stakeholders could agree on it was that more accountability was needed as a result of NEITI’s process.

Given the level of trust that it has developed as an independent institution, NEITI could – through TUGAR or otherwise – play a coordinating role amidst all the other reporting agencies and initiatives in the sector. Deeper coordination with agencies like the EFCC and other specialised task forces could in turn help identify additional data points that could be disclosed through EITI Reports. Building on the foundation that it has already set up, NEITI could concentrate on ensuring that government agencies, companies and NNPC in particular regularly provide useful data points in a manner that ensures the quality of the data. This would imply moving away from large annual reports that are too complex for easy accessibility and that are often delayed, towards a more regular publication of data through strengthened government and industry reporting systems.


[1] See
[2] Estimated at USD 1 billion on 1994-2004 NEITI Reports, USD 550 million on the 2005 NEITI Report, USD 440 million on the 2006-2008 NEITI Reports and USD 416 million on the 2009-2011 NEITI Reports. See EITI (2016), 2016 Progress Report: From Reports to Results,
[3] EITI (2016), 2016 Progress Report: From Reports to Results,
[4] See
[5] See minutes of NSWG meeting, 21 March 2013, unpublished, provided by NEITI Secretariat.
[6] See minutes of NSWG meeting, 20 June 2013, unpublished, provided by NEITI Secretariat.
[7] NEITI (15 April 2016), Induction Retreat for the National Stakeholders Working Group of the Nigeria Extractive Industries Transparency Initiative, Programme Report, unpublished, provided by the NEITI Secretariat.
[8] See minutes of NSWG meeting, 21 March 2013, unpublished, provided by NEITI Secretariat.
[9] See minutes of NSWG meeting, 20 June 2013, unpublished, provided by NEITI Secretariat.
[10] See minutes of NSWG meeting, 21 March 2013, unpublished, provided by NEITI Secretariat.
[11] See minutes of NSWG meeting, 20 June 2013, unpublished, provided by NEITI Secretariat.
[12] See minutes of NSWG meeting, 21 March 2013, unpublished, provided by NEITI Secretariat.
[13] See minutes of NSWG meeting, 19 September 2013, unpublished, provided by NEITI Secretariat.
[14] See minutes of NSWG meeting, 20 June 2013, unpublished, provided by NEITI Secretariat.
[15] See minutes of NSWG meeting, 19 September 2013, unpublished, provided by NEITI Secretariat.
[16] See minutes of NSWG meeting, 11 December 2013, unpublished, provided by NEITI Secretariat.
[17] See minutes of NSWG meeting, 11 December 2013, unpublished, provided by NEITI Secretariat.
[18] On 25 June 2014, 20 November 2014, 12 March 2015 and 16 June 2015.
[19] See minutes of NSWG meeting, 11 March 2016, unpublished, provided by NEITI Secretariat.
[20] NEITI (15 April 2016), Induction Retreat for the National Stakeholders Working Group of the Nigeria Extractive Industries Transparency Initiative, Programme Report, unpublished, provided by the NEITI Secretariat.
[21] NEITI (15 April 2016), Induction Retreat for the National Stakeholders Working Group of the Nigeria Extractive Industries Transparency Initiative, Programme Report, unpublished, provided by the NEITI Secretariat.
[22] World Bank (August 2011), ‘Political Economy of the Petroleum Sector in Nigeria’, and International Institute for Environment and Development (2014), ‘Localising transparency: exploring EITI’s contribution to sustainable development’,
[23] NEITI (2015), ‘Ten years of NEITI Reports: what have we learnt?’,
[24] EITI (2016), 2016 Progress Report: From Reports to Results,
[25] See