Abuja, February 19, 2004

PROTOCOL

It is with profound pleasure that I welcome all of you to the Nigeria Petroleum Revenue Management Workshop that the Administration is hosting in furtherance of our determination to improve transparent and accountable revenue management, particularly in the natural resource sectors. This workshop comes on the heels of the constitution of the National Stakeholders Working Group of the Nigeria Extractive Industry Transparency Initiative (EITI) as a clear demonstration of the priority that the Administration accords its mission for a more transparent and corruption-free Nigeria.

In signing up as one of the pilot countries for the EITI, we were simply as responsible members of the global community aligning our national and internal programme to foster stronger transparency in every aspect of government revenue and expenditure activities with acceptable international best practices. It is important to make this point because only a few people realise that our Government was already implementing a comprehensive programme of fiscal and financial transparency. The programme started in 2002 with expenditure and contract reforms and a programmed plan to commence an oil and gas sector transparency unique to the imperatives of

our country experiences.

Nigeria is often pilloried for her inability to have efficiently applied the oil resources earned over a thirty-year period to lift itself out of a regressive path to economic development. Majority opinion on the many facets of socio-political and economic challenges that the nation continues to face seems to coalesce around the fact that oil has not benefitted the vast

population of Nigeria either as individuals or as a group. Nigerians and non-Nigerians alike are quick to attribute the lack of openness, transparency and accountability in the most important sector of the economy to the poor governance records of the country.

Realising, therefore, that the most critical path to democratic consolidation is the heralding of procedures, systems, structures and institutions that promote openness and accountability, the Administration is determined to be a catalyst for the emergence of such fundamental changes and renewals.

Hence, through multi-stakeholders engagement consultation based on accuracy of relevant information, we are committed to a sharp turn of the corner in the not-too-open way that the petroleum sector operated in the past. We see our latest transparency initiative as a major step that would bolster the quality of democratic discussions of the many issues relevant to our wider economic reform agenda.

For the Administration, the case for the series of bold, difficult and, in real terms, painful reforms is made by the glaring failure of past policy choices over the decades to deliver the right pace and quality of economic growth and improved living standards that Nigerians desperately desire. The failure of those policy choices can be easily located within the half-hearted application of their costs or benefits to the diverse categories of stakeholders and constituencies within the Nigerian society.

The antidote to such sub-optimal reform approach is to transparently, even if not popularly involving the public and all relevant constituencies in attaining a better understanding of public finances and the whole range of revenue and expenditure activities that underpin the tough policy choices of government.

We recognise and wish to put in practice the "right to know" of every Nigerian. We believe that there are many benefits in ensuring that Nigerians can tell what government earns, how it earns, what sources it earns from and when it earns as well as on what it spends, how it spends, when it spends and how much it spends. It is within this context that the publication of the shares of allocation to the Federal States and Local Governments should be understood by everyone.

We have recorded considerable success at the Federal level in improving the efficiency of capital expenditure through simple procurement or contract reforms. That the Due Process Contract Review Mechanism has saved over N80billion of leakage in the form of the amount over and above the fair market cost of goods and services is indicative of the kinds of possibility that exist for a more broadly defined public finance efficiency in Nigeria.

Value-for -Money that is made possible by certifiable open and transparent competition has tremendously helped redefine the way that the public treasury was abused in the past through the legendary capital projects awarded indiscriminately.

Everyone dealing with the Federal Government of Nigeria, whether they be foreign firms or local ones, now know that the era of the big, inflated contract costs of works, goods and services is over. The establishment of the Federal Public Procurement Commission that will institutionalise and build on the current success of the Due Process is a key deliverable in the sphere or package of public sector efficiency paradigm that includes the monetisation programme, the pension reforms, the civil service reforms and the budget reforms.

The complement to the growing and efficiency is naturally, the maximization of all sources of petroleum revenues available to our country through transparent mechanisms for revenue generation (that is value for money cost structures that yield the revenues), collection, the enhanced capacities of the agencies involved in fiscal administration, revenue reporting and information, revenue management and the impact of accountability of all receivers of petroleum revenue and the oversight roles of civil society and the public at large over both revenue and expenditure activities of government and the oil industry. This range of issues will be your focus days of this workshop.

As a government, we hope that this additional practical demonstration of our commitment to "work our talk" on transparency by achieving a first in the opening up of the oil accounts to the highest levels of public scrutiny will sharply signal our unreserved resolve to enthrone greater transparency and accountability in all the activities of the Federal Government.

Furthermore, the strategic composition and clear terms of reference for the coalition of the media, civil society, private sector and public sector memberships of the National Stakeholders' Working Group that will drive the NEITI should engender confidence that this government believes in the value that the private sector and civil society jointly bring to its transparency mission.

I wish to commend the oil companies, all of whom have formally and informally communicated their commitment to the vision of the government for a very successful implementation of the reporting standards that the NSWG establishes. As partners with government in the petroleum industry, it is worthy that your constituency shares and believes in our mission to improve openness and transparency in your grossly esoteric industry.

As you begin publishing what you pay to us and we also publish what we receive from you, through an independent audit, any forms of inconsistencies will be revealed. Undoubtedly, the first outcome will be for such inconsistencies to attract questions and explanations from the public and from the side that should know respectively. A simple exercise like that helps in restoring confidence of the people in the transactions between government in the oil sector and your respective companies.

We hope that this model of partnership among the three principal sectors in our society will by its success incite similar initiatives .at the States and Local Governments in various ways that enhance the reputation and record of our country for good governance of resources.

The NSWG/NEITI will be fully supported by the Administration in whatever approach it decides to adopt toward enhancing the capacity of the people of Nigeria to feel a sense of participation in the way the petroleum sector operates and reports its operation.

Nigeria will continue to play our leadership roles in moving NEPAD forward. Already, we are inspired and motivated by the great success of the Africa Peer Review Mechanism and will take steps to initiate a meeting of oil resource economies in the very near future. I personally have no doubt that Africa's era to be clean, open, transparent and accountable is now. I rejoice greatly that Nigeria is and will continue to be at the forefront of the continent's new dawn of transparency!

I wish you very fruitful deliberation.

Thank you and God bless you all.