Publication:
Taxation and State Participation in Nigeria's Oil and Gas Sector

Loading...
Thumbnail Image
Date
2004-08
ISSN
Published
2004-08
Author(s)
Editor(s)
Abstract
Oil and gas are critical to Nigeria's economic and social performance. Oil alone accounts for 40 percent of the country's GDP, 70 percent of budget revenues, and 95 percent of foreign exchange earnings. Nigeria's dependence on petroleum is much greater than that of many other major producing countries. 2. Taxation and state participation are both designed to deliver benefits from the petroleum sector to the state and are the subject of this report. This report is based on Bank staff missions to Nigeria in January and July 2000. Principal conclusions and recommendations are also included in this report.
Link to Data Set
Citation
World Bank. 2004. Taxation and State Participation in Nigeria's Oil and Gas Sector. Energy Sector Management Assistance Programme (ESMAP) Technical paper;no. ESM 057. © http://hdl.handle.net/10986/18078 License: CC BY 3.0 IGO.
Associated URLs
Associated content
Report Series
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections

Related items

Showing items related by metadata.

  • Publication
    Revenue Sharing of Natural Resources in Africa : Reflections from a Review of International Practices
    (World Bank, Washington, DC, 2014-04) Brosio, Giorgio; Singh, Raju Jan
    The African continent is one of the world richest regions in oil, gas and minerals. Proven reserves have expanded and prospects improved recently making the continent an important player on the world stage. The share of natural resources in GDP is increasing rapidly. Exports of minerals and hydrocarbons account for more than a quarter of total exports in half of the sub-Saharan economies and the share of natural resources revenue (NRR) on total government revenue is expected to become dominant for an increasing number of countries. Wealth of natural resources offers opportunities but it also brings in challenges. Natural resources have generally been linked to a series of negative outcomes like economic decline, corruption and autocratic rule (McNeish, 2010). Oil and minerals reserves are often point source natural resources, being usually very spatially concentrated. Their discovery becomes almost inevitably a potential source of conflict between the governments, the people of the producing areas and those of the rest of the country (Fearon and Laitin, 2003). In other words, intergovernmental sharing is a big issue that needs a solution when natural resources are discovered and exploited. Full centralization of NNR is the exception rather than the rule, as we will observe in the paper. It is practiced for oil and gas by both autocratic regimes (such as Saudi Arabia and other Middle East countries), and fully fledged democratic systems, such as Norway and the UK. Full centralization does not imply, however, the absence of compensating mechanisms, or of indirect transfers in favor of the governments of the producing areas. In the UK, for example, Scotland receives no share of oil taxes, but is compensated with a larger share of block grants to local governments (the Barnett formula ). Norway rewards the local governments closer to the producing areas with generous infrastructure projects, such as tunnels and bridges linking very sparsely populated areas and islands. Autocratic countries may also use repression to quench the request for a share of NRR from their producing areas.
  • Publication
    Fiscal Systems for Hydrocarbons : Design Issues
    (Washington, DC: World Bank, 2007) Tordo, Silvana
    Although host governments and the investors may share one common objective-the desire for the project to generate high levels of revenue-their other goals are not entirely aligned. Host governments aim to maximize the rent for their country over time, while achieving other development and socioeconomic objectives. Investors' aim is to ensure that the return on investment is consistent with the risk associated with the project, and with their corporations' strategic objectives. To reconcile these often conflicting objectives, more and more countries rely on transparent institutional arrangements and flexible, neutral fiscal regimes. This paper examines the key elements of the legal and fiscal frameworks utilized in the petroleum sector and aims to outline desirable features that should be considered in the design of fiscal policy with the objective of optimizing the host government's benefits, taking into account the effect that this would have on the private sector's investment. Chapters 2 and 3 provide background material on, respectively, the stages of an oil and gas project and the type of legal arrangements normally used in the petroleum sector. The relative advantages and disadvantages of the tax and non-tax instruments used in petroleum fiscal regimes are discussed in Chapter 4. Chapter 5 outlines the features of successful fiscal regimes, while system measures and economic indicators are described in Chapter 6. Finally, in Chapter 7, a sensitivity analysis is used to illustrate some typical fiscal systems' design issues.
  • Publication
    Zambia Economic Brief, June 2015, Issue 5
    (World Bank, Washington, DC, 2015-06-01) World Bank Group
    After several years of strong economic performance, Zambia now confronts several important challenges that must be managed carefully to ensure sustained and inclusive growth in the future. On the one hand, the economy grew by an estimated 5.5–6.0 percent in 2014, somewhat above the average for African economies. Monthly copper production increased by an average of 8 percent during the second half of 2014, reversing the sharp slide in early 2014. Inflation fell to 7.2 percent in March and April, helped both by falling world oil prices and by the Bank of Zambia’s monetary tightening. In the first half of 2015, the authorities adjusted several key economic policies to respond to serious problems: revising rules on VAT refunds in February, announcing a new mining fiscal regime in April, and raising fuel prices in May so that the government could recover import costs. On the other hand, the kwacha has come under renewed pressure. It lost 17 percent of its value against the U.S. dollar from December 2014 through the end of March 2015. Since then it has recovered somewhat, but foreign exchange markets remain volatile. Interest rates have been rising since September 2014, due in part to increased government borrowing and in part to steps taken by the Bank of Zambia to tighten credit. Over the medium term, growth should hold steady in 2015 and then accelerate to around 6–7 percent per year in 2016–2018. Although inflation is expected to rise towards the end of 2015, it should resume falling in 2016. Low commodity prices, a more stable exchange rate, and adequate local harvests would help contain inflationary pressures and boost real disposable incomes. The resulting pick-up in private consumption, coupled with increasing copper exports, should help strengthen growth prospects.
  • Publication
    Raising and Sharing Revenues from Natural Resources
    (World Bank, Washington, DC, 2015-08) Brosio, Giorgio; Singh, Raju Jan
    Natural resources offer opportunities, but also bring challenges. They have generally been linked to a series of negative outcomes like economic decline, corruption, and conflict. Oil and minerals reserves, in particular, are often very spatially concentrated, and their discovery becomes a potential source of conflict between the governments, the people of the producing areas, and those of the rest of the country. But can this increased risk of conflict be prevented? Are there ways for the government to change this course of events? This paper tries to contribute to this discussion by looking at the international practices in raising and sharing natural resource revenues (NRR) among different levels of government. The study observes that sharing NRR with subnational governments of the producing areas is the prevailing practice worldwide. There is a rationale to compensate the subnational government of the producing areas for the negative environmental, social, and economic impact of production activities. Assignment to all - including the non-producing - subnational governments is less frequent, although it is increasingly used (particularly in Latin America). This option increases the number of stakeholders and gives them incentives to exert control. This is a relevant argument, particularly in countries with a weak capacity of public scrutiny of government activities. The volatility of revenue or the low absorption capacity of small government units may nevertheless create problems. Similarly, the allocation of NRR to individuals with direct transfers, a complement to the intergovernmental allocation rather than an alternative, can increase the welfare of citizens by increasing their scrutiny of NRR use by government.
  • Publication
    Transitional Islamic State of Afghanistan : Mining as a Source of Growth
    (Washington, DC, 2004-03) World Bank
    This Note examines the potential of the mining sector to be a source of growth for the Afghanistan economy. In order to address this fundamental and strategic issue, this Note will ask and provide answers to three principal questions. First, what is the potential in Afghanistan for large and small scale minerals development? Second, given the potential, what are the constraints for development of the sector in terms of the enabling environment (policy, regulatory, taxation) for private investment, institutional capacities, infrastructure and other constraints? And, third, what would be a reasonable sector development scenario over the next five years and what could be the benefit streams (production value, taxes, jobs, value added, etc.) generated under such a scenario? It is intended that the Note serve as a baseline document to help the government reflect on sector policies and strategies and to provide a "roadmap" for development of the sector. The roadmap will help the government to know where it wishes t o go, how it intends to get there, what obstacles and impediments it may face along the way, and what it can reasonably expect to receive in terms of economic and social impacts. This, in turn, will serve as the basis for the development of enabling legislation and fiscal mechanisms for the sector as well as for institutional strengthening required to stimulate investment.

Users also downloaded

Showing related downloaded files

  • Publication
    The Journey Ahead
    (Washington, DC: World Bank, 2024-10-31) Bossavie, Laurent; Garrote Sánchez, Daniel; Makovec, Mattia
    The Journey Ahead: Supporting Successful Migration in Europe and Central Asia provides an in-depth analysis of international migration in Europe and Central Asia (ECA) and the implications for policy making. By identifying challenges and opportunities associated with migration in the region, it aims to inform a more nuanced, evidencebased debate on the costs and benefits of cross-border mobility. Using data-driven insights and new analysis, the report shows that migration has been an engine of prosperity and has helped address some of ECA’s demographic and socioeconomic disparities. Yet, migration’s full economic potential remains untapped. The report identifies multiple barriers keeping migration from achieving its full potential. Crucially, it argues that policies in both origin and destination countries can help maximize the development impacts of migration and effectively manage the economic, social, and political costs. Drawing from a wide range of literature, country experiences, and novel analysis, The Journey Ahead presents actionable policy options to enhance the benefits of migration for destination and origin countries and migrants themselves. Some measures can be taken unilaterally by countries, whereas others require close bilateral or regional coordination. The recommendations are tailored to different types of migration— forced displacement as well as high-skilled and low-skilled economic migration—and from the perspectives of both sending and receiving countries. This report serves as a comprehensive resource for governments, development partners, and other stakeholders throughout Europe and Central Asia, where the richness and diversity of migration experiences provide valuable insights for policy makers in other regions of the world.
  • Publication
    Argentina Country Climate and Development Report
    (World Bank, Washington, DC, 2022-11) World Bank Group
    The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.
  • Publication
    World Development Report 2006
    (Washington, DC, 2005) World Bank
    This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.
  • Publication
    Lebanon Economic Monitor, Fall 2022
    (Washington, DC, 2022-11) World Bank
    The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.
  • Publication
    Classroom Assessment to Support Foundational Literacy
    (Washington, DC: World Bank, 2025-03-21) Luna-Bazaldua, Diego; Levin, Victoria; Liberman, Julia; Gala, Priyal Mukesh
    This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.