Strengthen beneficial ownership policies to block leaks in public ownership

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With the intention of curbing corruption in Nigeria through the effective institutionalization of the Beneficiary Ownership Transparency Register, the Civil Society Legislative Advocacy Center is grouping on behalf of the Accountability in Extractive Sector under the “Strengtening Civic Advocacy and Local Engagement” project being implemented of Palladium, with funding from the United States Agency for International Development, recently organized a day-long dialogue aimed at shaping advocacy for political and legal reforms around the beneficial ownership registry. Sunday Ehigiator reports

Nigeria holds a special place in Africa and global affairs. It is Africa’s largest economy and 26th in the world, with great potential to become a major player in the global economy through its human and natural talents. However, as recognized in the Economic Recovery and Growth Plan (2017-2020), this potential has remained relatively untapped over the years, partly due to corruption and public finance management, resulting in poor social and development indices.

President Muhammadu Buhari promised Nigerians during his swearing-in ceremony in 2015 that fighting corruption would be an integral part of his government. His commitment to a comprehensive anti-corruption agenda was underscored in May 2016 when he attended the international anti-corruption summit organized by the UK government.

On that global stage, he reaffirmed his commitment to strengthening anti-corruption reforms through the implementation of programs aimed at “uncovering corruption; punishing the corrupt and caring for the victims of corruption; and expelling the culture of corruption.

Following these commitments, the federal government sought to deepen institutional and policy reforms, leading to Nigeria joining the Open Government Partnership (OGP) in July 2016.

The OGP is an international, multi-stakeholder initiative focused on improving transparency, accountability, civic participation and outreach through technology and innovation. It brings together reform advocates from government and civil society who recognize that government is likely to be more effective and credible when governance is open to public input and oversight.

At the national level, OGP introduces a domestic policy mechanism through which government and civil society can engage in ongoing dialogue. Internationally, it provides a global platform to connect, empower and support indigenous reformers committed to transforming every society through openness.

Despite these multi-tiered programs, the significant challenges in optimizing domestic resources and mobilizing revenues for sustainable development finance have been caused by the ambiguity of the true state of the country’s full public finance and resource management processes, which include undisclosed corporate ownership and taxes Dodge and Avoid.

Several initiatives and efforts have been launched in response, including the institutionalization of a Beneficial Ownership Report by the Nigeria Extractive Industries Transparency Initiative (NEITI) through the launch in November 2021 of the Opening Extractives Program (OEP), a global, five-year program addressing the true owners of assets in Nigeria’s oil, gas and mining sector.

Also, the enactment of the Companies and Allied Matters Act (CAMA) 2020 in August 2020, which provides for the establishment of a register of beneficial ownership for all corporate entities in Nigeria by the Corporate Affairs Commission (CAC); and the signing of the Petroleum Industry Act in August 2021, which provides a legal framework for the effective and efficient implementation and integration of open data reforms such as the beneficial ownership transparency initiative.

However, while these efforts are commendable, it should be noted that the BO Transparency Register is not an end in itself but a means to an end, as its effectiveness in terms of accountability in the extractive sector has yet to achieve significant results.

With this in mind, the CISLAC-led AES Cluster, with the support of USAID, organized a one-day policy dialogue in Lagos on Thursday, April 29, 2022, the aim of which was to identify the existence and expectations of the effective implementation of the above frameworks the status of progress in the implementation of the Transparency of Beneficial Ownership Initiative in Nigeria.

In his address, CISLAC Executive Director Auwal Musa Rafsanjani said that while NEITI’s efforts to seek the establishment of a commodity sector registry are commendable, legitimate companies have an essential role to play in ensuring the registry’s effectiveness.

According to him, “legitimate corporations play an integral role in national development, but the involvement of Politically Exposed Persons (PEPs), who hide corruptly acquired wealth through the complex networks of corporations deliberately created to hide their identities, has the Risks they pose further increased to unfortified economies. The Siemens, Halliburton and Malabu oil scandals, to name just a few high-profile cases, had a net revenue impact that was unbearable for the country’s finances and the economic well-being of its citizens.

“We have already faced some European Union sanctions for the non-existence of anti-money laundering laws; While we see and hear of the prosecution of individuals and organizations involved in the Panama Papers leaks and the Wiki leaks, among others, there appears to be no legal framework that would allow for the conviction of all Nigerians involved.

“Apart from the fear of the international community, it is worth noting here that concealing beneficial ownership is costing the lives of our compatriots as terrorists use international financial systems to sustain their operations.”

Rafsanjani pointed out that without transparent ownership of Nigerian and international companies operating within Nigerian jurisdiction, Nigeria will not be able to stop the bleeding of funds from illicit financial outflows that are geometrically progressively increasing year by year and that Country cost about $17 billion annually.

He expressed his belief that a collaborative partnership of relevant stakeholders in the beneficial ownership campaign will help “give a voice to this simple but strategic endeavor that will help eradicate corruption in our financial, procurement and and other strategic sectors, and effectively contribute to domestic revenue mobilization to finance the development of critical industries.”

In brief comments from other stakeholders at the event, who pleaded for anonymity, they further stressed the need for increased and robust collaboration between all stakeholders concerned to ensure the full institutionalization of an open, effective and free for all Beneficiary Ownership (BO) Transparency Register”.

According to an Economic and Financial Crime Commission (EFCC) source, a lack of transparency on the part of business owners makes investigating corrupt practices more difficult, as most of them provide invisible addresses that cannot be traced, while some even place unborn children as directors or use their family names interchangeable. He therefore stressed greater cooperation with the Commission to help combat the threat.

From the perspective of the Federal Inland Revenue Services (FIRS), it was also shown that some companies try to evade taxes by not declaring their profits or even hiding their income taxes under a pseudonym.

“Some do not separate corporate taxes from personal income, making it difficult for regulators to regulate and monitor them. And for the commodities sector, which involves both foreigners and Nigerians, dealing with leaks is still a problem as some elements are still ok with it.”

The representative concluded that all hands must be on board to fight these battles and rid the country of corruption as it is a collective responsibility that will move the nation forward if won.

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