This, according to the Bretton woods institution will make leading African economy to reap from the newly restructured national oil company, Nigerian National Petroleum Company Limited, particularly in its reporting system and ecosystem of the sector.
IMF stated this in its latest report titled, “Good Governance in Sub-Saharan Africa: Opportunities and Lessons.”
Specifically, it re-emphasised the need to strengthen oversight on the NNPC through the office of the auditor-general of Nigeria as well as improve legislative actions.
It stated: “Strengthening transparency is crucial if Nigeria is to receive maximum benefits from the oil and gas sector.
The IMF’s Fiscal Transparency Code requires that resource corporations report on project-level fiscal payments to and from the government, reconciled with government receipts in line with international standards, with no major unexplained reconciliation errors.
In line with good practices, it is important for the NNPC to disclose all revenue transfers and remittances to the federation account by providing complete and timely information that ensures the accountability of its receipts and expenditures.
The corporation could also consider enhancing and integrating its transparency practices by reporting on environmental, social, and governance considerations.”
The fund noted that the Sustainability Disclosure Guidelines established by the Nigeria Exchange Limited (NGX) could provide useful guidance in this regard.
The guidelines are intended primarily to provide the value proposition for sustainability in the Nigerian context citing that it articulates a step-by-step approach to integrating sustainability into organizations, indicators that should be considered when providing annual disclosures, as well as timelines for such disclosures.
Furthermore on oversight, it added: “The role of the auditor-general can be strengthened. The constitution does not give the auditor-general a direct mandate to audit NNPC.
It establishes the appointment of the auditor-general to audit public accounts and offices of the federation but explicitly excludes the accounts of government statutory corporations from the mandate.
However, it grants the auditor-general power to conduct periodic checks aimed at verifying that spending is in accordance with the Ministry of Finance’s instructions and at investigating expenditure patterns of the government, including payments by NNPC to the federation account.
“The Office of the Auditor-General is resource-constrained and requires greater financial and operational independence, and this impacts the timeliness of the information provided to the National Assembly.
The relationship between the Office of the Auditor-General and the oversight committees of the National Assembly should be enhanced to ensure that, to the extent possible, current financial, fiscal, and governance challenges related to SOEs are being analysed and discussed.
In addition, these steps could be combined with examinations of audit reports by parliamentary committees, allowing public hearings during the review process, and submission of a report to Parliament on the issues arising from the audit reports.”
The IMF added that the fiscal oversight role of the Ministry of Finance should be enhanced, “The Finance Act gives the Minister of Finance powers to supervise and control the expenditure and finances of the federation and all matters related to the financial affairs of the federation that are not by law assigned to any other Minister.
However, the Ministry’s fiscal oversight function over NNPC should be strengthened.”
It further stated: “The Nigerian authorities must accelerate their anticorruption efforts to maintain momentum against both entrenched challenges and evolving threats.
The high-level commitment of the government and the devotion of many public servants working in the SOE sector, as well as in the country’s institutions dedicated to countering corruption and combating money laundering and the financing of terrorism are the foundation for reform.
To make a durable dent in the incentive structures that underpin corruption in Nigeria, however, the government will need to accelerate and intensify its reforms in this area as stated in its ERGP.
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“The Nigerian authorities’ efforts to enhance transparency in the oil sector should include full disclosure of NNPC’s JV arrangements and establishing clear institutional responsibilities for revenue assessment, collection, and reporting. Achieving critical improvements to governance will require a combination of legislative action, institutional reform, and additional resources.”