Nigeria's foremost Online Energy News Platform

CACOL Laments Nigeria’s Over-Reliance On Oil, Gas Sector

The Centre for Anti-Corruption and Open Leadership (CACOL) has lamented Nigeria’s over-reliance on oil and gas as the mainstay of its economy, almost 60 years after independence, saying that this has been responsible for much of the official heists, distrust and other social malaise bedeviling the country.

Debo Adeniran, CACOL Executive Chairman, who spoke through a statement issued by Adegboyega Otunuga, the group’s Coordinator for Media and Publications, said the report of an exhaustive research carried out by the Nigeria Extractive Industries Transparency Initiative (NEITI) and Trust Africa (TA) specifically stated that 92.9 per cent of the total amount of illicit financial flows (IFF) in Nigeria annually were from businesses in the oil and gas sector.

He said the report, entitled, ‘Averting Illicit Financial Flows in Nigeria’s Extractive Industry’, and released in Abuja on Tuesday, stated that while it was generally difficult to measure IFFs as a result of their illegality, types of activities and data challenges, it was, however, discovered that the country’s oil sector contributed the most to the illegality on a yearly basis.

The report, he added, stated that out of the majority percent contribution of the sector to IFFs in Nigeria, illegal oil bunkering accounted for about 35 percent while commercial transactions by multinationals that dominated the sector contributed more than 60 per cent of the fraud.

The NEITI and TA report, according to him, stated that the firms were found of evading tax and laundering funds, and that the country’s oil sector had remained vulnerable to IFFs due to Nigeria’s economic dependence on the sector.

It also stated further that the oil industry was highly influenced and controlled by the political class and had remained technically and structurally complex.

“In addition, NEITI and its partner agency TA, equally affirmed that Nigeria’s reliance on the cash-based economy was another reason why IFFs thrive in the country.

“According to them, ‘Opportunities for IFFs through fraud and money laundering in Nigeria’s oil industry generally started as administrative control failures by those expected to exercise statutory and regulatory frameworks in the industry.”