NIGERIA: NEITI BRIEFS U/S JEFFERY AND REQUESTS ASSISTANCE

UNCLAS ABUJA 001603 UNCLASSIFIED SIPDIS DEPT OF ENERGY FOR CAROLYN HAYLOCK AND GEORGE PERSON E.O. 12598: N/A TAGS: EPET ENRG ECON PGOV EAID NI SUBJECT: NIGERIA: NEITI BRIEFS U/S JEFFERY AND REQUESTS ASSISTANCE SENSITIVE BUT UNCLASSIFIED - NOT FOR DISTRIBUTION OUTSIDE USG ¶1. (SBU) SUMMARY: In a July 25 meeting, Nigerian Extractive Industries Transparency Initiative (NEITI) officials briefed visiting Under Secretary Reuben Jeffery and requested additional USG assistance to strengthen the institution's capacity to implement required audits of revenues and expenses in the gas and oil sectors. NEITI has made strides since its creation and continued USG assistance could increase transparency in Nigeria' soil and gas sectors. END SUMMARY. ¶2. (SBU) Under Secretary (U/S) for Economic, Energy and Agricultural Affairs Reuben Jeffery, the Ambassador, and Embassy staff met with Nigerian Extractive Industries Transparency Initiative (NEITI) Chairman Professor Assisi Asobie and NEITI Executive Secretary Mallam Sa'eed July 25. The U/S acknowledged NEITI's leadership on transparency and Asobie thanked the Embassy and USAID for its continued support and expressed sincere gratitude for USAID's assistance to civil society organizations (CSO) that were instrumental in pushing EITI legislation through the National Assembly. He urged USAID to work with CSOs to advocate for implementation of NEITI at the state level. Sa'eed requested additional USG assistance to train and support staff as a way to strengthen NEITI's capacity to implement required audits of revenues and expenses in the gas and oil sectors. ¶3. (U) Sa'eed asserted that in order to fight oil theft in the Niger Delta, the GON needed to create a control mechanism to publish oil sales, perhaps with description or source information, which would include disclosure of the commodity buyer and shipment destinations. The Ambassador offered to look for available models to address supply and demand, perhaps aided by the use of electronic bills of lading. Sa'eed reiterated NEITI's staff needs, reporting that the institution had a staff of only 35, but needed about 75, and that a lack of knowledge of how the extractive industries operated, particularly oil and gas, slowed down the auditing process. NEITI Background -------------- ¶4. (U) Nigeria signed on to the Extractive Industries Transparency Initiative (EITI) in 2004 to boost its fight against corruption. NEITI has recorded several achievements in its four years of operations, such as commissioning and publishing (?) the first comprehensive audit of the petroleum sector for the period 1999 to ¶2004. NEITI's future challenges are two-fold: 1)upgrade the technical skills of current auditors, and recruit and retain auditors and specialists with extractive industries experience; and 2)obtain appropriate assistance to develop a global information-sharing database to capture oil sale information, matching sales with delivery recipients. ¶5. (U) President Yar'Adua inaugurated the current NEITI board January 29, 2008 in accordance with the 2007 NEITI Act. Its mandate is to promote transparency and accountability in Nigeria's management of revenues from the oil, gas, and mining sectors. The oil sector provides 20 percent of Nigeria's GDP, 95 percent of foreign exchange earnings, and about 80 percent of budgetary revenues. A 2007 revision in NEITI's enabling legislation extended its mandate to include examining the use of revenues from petroleum and mineral sales, allowing a new focus on state-level expenditure of oil proceeds. ¶6. (U) COMMENT: USG and other donor assistance continues to support NEITI. The Embassy has initiated a NEITI Support Group, coordinated by the World Bank, but NEITI could benefit from additional technical assistance. A new National Stakeholder Working Group (NSWG),which includes representatives from the extractive industries, civil society, relevant labor unions, industry experts, and one member from each of Nigeria's six geo-political zones, appears to be making progress. END COMMENT. PIASCIK