Global transparency initiative insists on July 1 date
Says funding challenge not exceptional ground for deferment
NEITI cites inadequate financing for inability to meet deadline
Emmanuel Addeh in Abuja
The Board of the Extractive Industries Transparency Initiative (EITI) has rejected Nigeria’s request for a one-year extension of its validation exercise by 12 months, insisting that the process must commence on July 1, 2026.
In the decision published by the EITI Board on its website, it cited the absence of exceptional circumstances to justify the request by Nigeria, stressing that the reasons advanced by Nigeria did not meet the criteria required for granting an extension.
The request was submitted by the National Stakeholders Working Group (NSWG), the governing board of the Nigeria Extractive Industries Transparency Initiative (NEITI), which argued that budgetary constraints and fiscal deficits had delayed funding for the procurement of an Independent Administrator to produce the country’s 2024 EITI Report.
NEITI informed the EITI Secretariat that the report, which it considers critical to demonstrating Nigeria’s progress in implementing the 2023 EITI Standard, would now not be ready until October 2026.
Essentially, EITI validation, which is held between two and four years, is the organisation’s quality assurance mechanism to assess a member country’s performance, level of compliance with its standards in terms of transparency; review of stakeholder engagement and measurement of outcomes and impact.
The implementing country is required to receive a fixed score out of 100, based on six categories of progress, with the risk of either being suspended from the group temporarily for receiving a “poor” score, or being delisted for a “very poor” overall score, for failure to make progress in two subsequent validations or targeted assessments.
However, the EITI Board said the reasons advanced by Nigeria did not meet the criteria required for granting an extension.
“The justification for the request for extension relates to budgetary constraints affecting the finalisation and publication of the 2024 EITI Report. NEITI notes that the report would provide a better basis for an assessment of Nigeria’s progress in implementing the 2023 EITI Standard.
“The International Secretariat considers that these reasons do not constitute exceptional circumstances as defined under the Board’s criteria, as the 2023 EITI Report is still timely and an appropriate basis for Validation. Moreover, the issues of allocation of resources and budgetary constraints are well within the control of the government to address,” EITI decided.
While dismissing Nigeria’s reasons for requesting the deferment, the organisation said that Nigeria’s case was not exceptional enough, according to EITI rules, to accede to the request.
“The EITI Board is of the view that there are no exceptional circumstances. Furthermore, the MSG is currently well functioning, which is a key improvement from the previous validation. The MSG (multi-stakeholder group) can prepare the templates based on the 2023 EITI report, supported by a well-staffed secretariat,” EITI stated.
Besides, the board warned that postponing the exercise could create additional challenges, noting that elections expected in 2027 may lead to the dissolution and subsequent reconstitution of the multi-stakeholder group, potentially disrupting the process.
“There is a risk in delaying the validation to next year. Elections scheduled in early 2027 will likely lead, as previously, to the disbanding of the MSG. Reconstituting the MSG will take time and is likely to lead to turnover from key government representatives.
“Instead, the objective of the international secretariat is to have an expedient assessment which would allow for MSG comments under the sitting MSG, to avoid further disruption and delays. The MSG may always request the validation committee to consider updated disclosures from the 2024 EITI report during the MSG commenting period,” it pointed out.
The Board noted that while Nigeria fulfilled the procedural requirements for requesting an extension, including obtaining endorsement from all stakeholder groups, it failed to establish the existence of exceptional circumstances beyond its control.
According to the EITI secretariat, Nigeria currently has favourable conditions for validation, including a functioning multi-stakeholder group, a reconstituted NSWG, regular implementation activities and a secretariat with more than 100 staff members.
It also argued that the country’s 2023 EITI report remains sufficiently current to serve as the basis for the upcoming validation exercise, even without the completion of the 2024 report.
Nigeria’s next validation is particularly significant because the country was directed in its previous assessment to address a number of shortcomings relating to stakeholder engagement, contract and licence disclosures, beneficial ownership reporting, state participation, subnational transfers and other transparency measures.
The board of the global transparency group, which is its highest decision-making body, explained that “There are currently good conditions for conducting validation.”
“ The NSWG was reconstituted in April 2024 appointing a high-ranking official as the chair. The NWSG meets regularly and continues to deliver implementation activities in line with its work plan for EITI implementation, demonstrating the group’s effective functioning and coordination.
“The government has also reactivated an Inter-Ministerial Task Team (IMTT), providing a cross-sectoral platform for implementation and follow-up on corrective actions. The functioning of the MSG is a key improvement since the previous validation. The MSG is supported by a secretariat of over 100 staff.
“There is clear and sustained government commitment to EITI implementation with continued financing of NEITI’s core operations, outreach and analytical work including the Fiscal Allocation and Statutory Disbursement (FASD) and 2023 EITI Reports.
“Preparations towards Validation are under way. The NSWG through implementation of its work plans has taken steps to systematically address key corrective actions from the last Validation, including those related to contract disclosure, resource-backed loans, subnational transfers and state-owned enterprise transparency.
“In preparation for Validation, NEITI has facilitated discussions on the new Validation model, templates and corrective actions with each constituency. NEITI has confirmed that it has begun work on the Validation templates. However, drafts of the templates are yet to be shared with the International Secretariat.
“While NEITI noted that it considers publishing the 2024 EITI Report as part of the preparations for the upcoming Validation, the International Secretariat is of the view that the 2023 EITI Report can also serve as basis for Validation and would allow the MSG to progress on the templates based on a report which has been issued in 2024,” the global organisation said.
