IT was hardly surprising that international extractive industries watchdog, Revenue Watch Institute (RWI), recently released the Resource Governance Index (RGI), a global ranking of the quality of the governance of extractive industries in the world’s leading 58 natural resources-rich countries and in its assessment, Nigeria was ranked 40th. The ranking, based on issues such as the transparency with which taxes and other revenues are remitted to the government and reported correctly confirmed the correct status of Nigeria’s oil industry as one riddled with corruption and lacking in transparency.

The ranking would have gone largely unnoticed but for the diligence of the Nigerian Extractive Industries Transparency Initiative (NEITI), which came out to corroborate the characterization of the governance of Nigeria’s oil sector by the RWI as “very weak”. This diligence of NEITI is admirable. It has since inception consistently exposed the opacity and corruption, which reign supreme in Nigeria’s oil sector.

It is indeed tempting to think that NEITI’s origins in an international movement to promote transparency in extractive industries, which Nigeria signed up to, accounts for its tenacity and courage; but its leadership has been critical to its success. After all, NEITI is funded by the Nigerian government and its Executive Secretary and some board members are Federal Government appointees. Without the tradition of integrity and fearlessness it has built, the paymaster of the piper would have been dictating the tune. NEITI would have been one of the many agencies meant to fight corruption and promote transparency, which have failed so woefully to do so and Nigerians would never have had the benefit of its candid reports.

The Resource Governance Index assesses four key components of extractive industries: Institutional and Legal Setting; Reporting Practices; Safeguards and Quality Control and Enabling Environment. Nigeria scored moderately well on the first component i.e. Institutional and Legal Setting, on account of the passage of legislations, which promote ostensibly transparency, including the 2007 NEITI Act and the Freedom of Information Act. But crucially the manner in which various agencies in the oil and gas sector function was found to be totally deficient in providing an enabling environment for substantive transparency. This evaluation is hardly surprising as Nigerian officialdom has a tragic genius for crafting seemingly sensible laws and regulations and doing everything that expressly contravenes every letter and spirit of the laws. Besides, transparency seems less of a consideration in Nigeria given the constant exposure of gargantuan corruption. The impotence of the government on, if not active promotion of corruption, is the real issue. In its review of the 2013 RGI, NEITI revealed that its annual audit of the Nigeria oil and gas sector has found $9.6 billion in outstanding payments owed the Federal Government by oil companies, including the Nigerian National Petroleum Corporation (NNPC). Neither the NNPC nor the Ministry of Petroleum has confirmed or denied this claim. According to NEITI, “underpayment, underassessment, and variance in royalties, signature bonuses, levies and taxes” abound in the oil sector. No significant step has been taken to redress these anomalies despite NEITI’s detailed reports on the enormous cost to the national treasury and recommendations on stemming the fiscal drain.

It seems that successive Nigerian governments have deliberately created and left open a system of mammoth shadow revenue taps in the nation’s oil sector. The Federal Government has refused to address the urgent need to bring fairness, transparency and due process to the bidding through which oil blocks are allocated and the process for reviewing existing oil block concessions. Billions of dollars could easily be made by high-ranking politicians and corrupt bureaucrats as a result of the wide discretion the system has for long permitted. Shamefully, despite the prevalence of required metering technology, the Ministry of Petroleum Resources is yet unable to efficiently measure the quantity of crude oil pumped by the oil companies operating in Nigeria.

NEITI in its comments on the Resource Governance Index also highlights one of the gravest failure of the Goodluck Jonathan administration or that of the ruling Peoples Democratic Party (PDP): the failure to pass the all-important Petroleum Industry Bill (PIB). The government may significantly have diminished chances that the bill would be passed in good time by the National Assembly by making the bizarre choice to retain and by some accounts even expand the opaque discretionary powers that have often been abused by ministers. The National Assembly, dominated by the PDP, has delayed passage of the PIB with squabbles over regional distribution of oil export revenue. Not only is an opportunity to improve the transparency and revenues of Nigeria’s oil sector being lost, the industry is also being gradually reduced to irrelevance as more African nations are discovering oil and are attracting investment into exploration and production. New technology is also bringing greater volume of hitherto commercially unviable domestic oil and gas into the western markets on which Nigerian exports rely.

The Presidency seems too preoccupied with the politics of 2015 to exercise the leadership required to pass the Petroleum Industry Bill urgently. All the same, passing the PIB is the minimum first step that needs to be taken to put an end to the rampant corruption and impunity in Nigeria’s oil sector.

On this, history will not judge kindly anyone who failed to do his duty to ensure that Nigeria takes this remarkable step.