Strengthening the beneficial ownership policy to block leaks in public funds

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In a bid to combat corruption in Nigeria through the effective institutionalization of the Beneficiary Ownership Transparency Registry, the Civil Society Legislative Advocacy Center on behalf of Accountability in the Extractive Sector is coming together in the part of the project to strengthen civic advocacy and local engagement currently being implemented. by Palladium with funding from the United States Agency for International Development, recently hosted a day-long dialogue aimed at shaping advocacy for policy and legal reforms around the beneficial ownership registry. Sunday Ehigiator Reports

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

President Muhammadu Buhari, during his swearing-in ceremony in 2015, promised Nigerians that the fight against corruption was an integral part of his administration. His commitment to a large-scale anti-corruption agenda was further heightened in May 2016 when he participated in the UK Government’s International Anti-Corruption Summit.

It was on this global stage that he reaffirmed his commitment to strengthening anti-corruption reforms by implementing programs aimed at “exposing corruption; punish the corrupt and provide for the victims of corruption; and drive out the culture of corruption.

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

OGP is an international, multi-stakeholder initiative focused on improving transparency, accountability, citizen participation and responsiveness to citizens through technology and innovation. It brings together reform champions 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 scrutiny.

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

Despite these programs at several levels, the significant challenges posed by the optimization of domestic resources, the mobilization of revenue for the financing of sustainable development, have been occasioned by the obscurity of the real state of all the processes management of the country’s public finances and resources, which include undisclosed ownership of legal persons, taxation evasion and avoidance.

In response to this, several initiatives and efforts have been put in place, including the institutionalization of beneficial ownership reporting by the Nigerian Extractive Industries Transparency Initiative (NEITI) through the launch of the Openness Program Extractive Industries (OEP), a five-year global program to uncover the beneficial owners of assets in Nigeria’s oil, gas and mining sectors, in November 2021.

There is also the enactment of the Companies and Related Matters (CAMA) Act 2020 in August 2020, which provides for the establishment of a Register of Beneficial Owners for all corporate bodies in Nigeria by the Corporate Affairs Commission ( CAC); and the signing of the Petroleum Industry Bill in August 2021, which provides a legal framework for the effective and efficient implementation and mainstreaming of open data reforms like 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 accountability in the extractive sector is not has not yet obtained significant results.

It is in this context that the AES cluster led by CISLAC with the support of USAID organized on Thursday, April 29, 2022 a one-day political dialogue in Lagos whose objective was anchored on the existence and expectations of the effective implementation of the above frameworks to check the status of the implementation of the Beneficial Ownership Transparency initiative in Nigeria.

In his remarks, CISLAC Executive Director Auwal Musa Rafsanjani said that while NEITI’s efforts are commendable for making efforts to establish an extractive sector registry, legitimate companies have a critical role to play in ensuring compliance. registry efficiency.

According to him, “While legitimate businesses play a vital role in national development, the involvement of Politically Exposed Persons (PEPs) who hide corruptly acquired wealth through the complex networks of businesses deliberately created to hide their identity further heightened the risks they pose to unfortified economies.The Siemens, Halliburton and Malabu oil scandals, to name but a few high-profile cases, had a net impact of unsustainable revenue losses to the country’s finances and the economic well-being of citizens.

“We were already facing sanctions from the European Union for the lack of anti-money laundering legislation; while we see and hear of prosecutions of individuals and entities involved in the leaked Panama papers and Wiki-leaks among others, there does not appear to be a legal framework to convict all that was involved from the Nigeria.

“Besides the fear of the international community, it should be noted here that the concealment of beneficial owners is costing the lives of our compatriots, as terrorists use international financial systems to support their operations.”

Rafsanjani noted that without the transparent ownership of Nigerian and international corporations operating within Nigerian jurisdiction, Nigeria will not be able to stop the bleeding of money through illicit financial outflows which are perpetually increasing geometrically progressive d year on year and cost the country about $17 billion. annually.

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

In brief remarks from other stakeholders at the event who pleaded anonymity, they further underscored the need for enhanced and strong collaboration among all relevant stakeholders to ensure the full institutionalization of a “ beneficial ownership” open, efficient and free for all. ) Transparency register”.

According to a source from the Economic and Financial Crimes Commission (EFCC), the lack of transparency on the part of business owners hampers investigations into corrupt practices, as most of them present invisible addresses which do not cannot be traced while some even put unborn children as administrators or use their surnames interchangeably. He therefore insisted on closer collaboration with the commission to help combat the threat.

From the perspective of the Federal Inland Revenue Services (FIRS), it also revealed that some companies are trying to evade tax by not reporting their profits or even hiding their income tax under a pseudonym.

“Some do not separate corporate tax from personal income, which complicates regulation and oversight by the regulator. And for the extractive sector where foreigners and Nigerians are involved, it is always a leak management issue because some elements always collude with them.

The representative thus concluded that to fight these battles and rid the country of corruption, everyone must be on deck, as it is a collective responsibility which, if won, will move the nation forward.

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