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Lessons from Reformers: Nigeria’s push for beneficial ownership transparency in procurement and in the extractives sector

Lecciones de los Reformadores: El impulso de Nigeria por la transparencia de los beneficiarios reales en las contrataciones y en el sector extractivo

Leçons à Tirer des Réformateurs : Les efforts du Nigéria en faveur de la transparence relative à la propriété effective en matière d’approvisionnement public et dans le secteur des industries extractives

Oil rig in the yards

This case study was originally posted in the OGP Global Report.

The country has legal provisions dating back to 2004 that partly address beneficial ownership. There is also a closed register of companies. However, many of the names cited are not the real owners and there is no mechanism to verify them, or sanctions for falsifying information. As a resource-rich country that has been plagued by grand corruption, beneficial ownership transparency has emerged as an important tool. For example, Global Witness helped to uncover shell companies that have since been implicated in the alleged theft of US$1.1 billion in revenues from the awarding of an oil field to a Nigerian company, Malabu Oil & Gas, which was actually owned by a former oil minister. Currently, two global oil companies, ENI and Shell, are standing trial with others in Italy over allegations of corruption related to this deal, which is estimated to have cost Nigeria US$6 billion in potential revenues. Overall, it has been estimated that US$15.7 billion in illicit flows leave the country’s financial system every year.

At the UK-hosted Anti-Corruption Summit in 2016, Nigeria committed to joining OGP and setting up a national public registry of beneficial ownership, which it included in its first OGP action plan. The body responsible for the register, the Corporate Affairs Commission (CAC), is reportedly attempting to change relevant national legislation to align with global good practice. At the same time, the country is pursuing a sectoral action plan on beneficial ownership through the EITI process by December 2019. It has produced a “road map” to require the public disclosure of beneficial owners of oil, gas, and mining companies in the country, and has made progress on the implementation of the EITI Standard. The Nigerian government is also applying beneficial ownership requirements to any company holding a government contract as part of its implementation of the Open Contracting Data Standard for its public procurement process.

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