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$ 50bn loss: ‘Nigeria’s extractive sector deserves more from govt’

Following the 2020 UNCTAD report on Economic Development in Africa showing that the extractive sectors lose about $50 billion annually, the Manufacturers Association of Nigeria (MAN) has disclosed that the Federal Government needs to plug the channels through which multinational corporations take advantage of the resources by channeling funds offshore.

From records, Nigeria remains the highest loser in this regard, being the highest oil producing country in the region as well as the mining sector being ravaged illegally. Acting Director-General, MAN, Ambrose Oruche, in a chat with this newspaper, explained that it was time the country focused on leakages of domestic resource mobilisation in order to complement revenue generation to boost infrastructure and economic development post-COVID-19. The acting director-general explained that because COVID-19 had overstretched the resources needed to fund essential services like education and health in the country, increased national debt burden and limited inflows of aid and foreign development investment, there is the need, more than ever, to raise revenue locally.

He pointed out that Nigeria should be able to raise the needed funds if the duct allowing capital flight and illicit financial flows (IFFs) could be closed. Oruche emphasised that the lost funds mainly come from Nigeria’s extractive sectors, while Africa remains the poorest continent in the world. He said: ‘’The extractive sector presented the largest source of IFF from Africa.

In view of the pressure on governments to mobilise financial resources to mitigate the adverse impact of COVID-19, the extractive sector presents strategic potential to generate and raise the required resources.” According to him, there is the need to reimagine public policy and deploy strategies that address Nigeria’s vulnerabilities, which were made more visible by COVID-19. “For instance, oil, gas and minerals are finite resources.

The multinational corporations in the extractive sector, unfortunately, do not pay their fair share, and Nigeria’s development based on its natural resources remains an unattainable dream. “In this regard, the Nigeria Mining Vision (NMV), and the report of the High-Level Panel (HLP) on IFFs have provided recommendations to optimise domestic resource mobilisation and leverage on the extractive sector to drive inclusive and sustainable growth in the country,” Oruche stated.

The MAN helmsman, therefore, called on the Federal Government to improve on transparency and accountability of multinationals to end secretive jurisdiction and tax havens and also promote the automatic exchange of information, citizen participation in extractive revenue management. Additionally, he added that Nigeria should review policies that allow overly generous tax incentives and publicly report the revenue forgone to subsidise the multinational corporations. Speaking on Sustainable Development Goals (SDGs), Oruche stressed that Nigeria and other countries in Africa would not meet the SDG target of eliminating extreme poverty by 2030.

He disclosed that this slow progress derived from resource leakages and increasing poverty rates, as 64.3 per cent of sub-Saharan Africa is still living in multidimensional poverty. While other regions of the world are experiencing rapid poverty reduction, the decline is much slower for sub-Saharan Africa.

To provide a forum to discuss these issues, the acting DG said the Pan-African Conference on Illicit Financial Flows and Taxation (PAC) would bring together members of parliament, policymakers, researchers, academia, government representatives, media, international development partners, and civil society representatives from across the continent. To him, PAC 2020 will be a week-long virtual event and will focus on leakages of domestic resource mobilisation in the extractive sector.

 

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