The good news is that the authorities have decided to place into the Consolidated Fund the signature bonus of US$18 million that it received from ExxonMobil, and whenever the funds are needed parliamentary approval will be sought, presumably via a Supplementary Estimate. However, by Section 38(1) of the Fiscal Management and Accountability Act, “All public moneys raised or received by the Government shall be credited fully and promptly to the Consolidated Fund…” To the extent that the funds are yet to be deposited into the Consolidated Fund, the requirement of this section remains unfulfilled.
We are on record as having expressed our reservations about whether or not we should have accepted a signature bonus, considering the figure has been arbitrarily decided with no laid-down basis of arriving at it. Rather, our negotiations should have focused on: (i) arriving at a reasonable percentage of royalty by comparison to what other oil producing countries are receiving; (ii) sharing of revenue from the sale of crude oil, as opposed to profit-sharing because of the tremendous difficulty in verifying recoverable costs, as experienced by other countries; (iii) agreeing on a reasonable amount of fiscal concessions necessary to attract investment; and (iv) ensuring that the U.S. oil giant pays its fair share of income tax, value added tax, corporation tax and property tax, among others. Going forward, because of long-term commitments, we support the involvement of and approval by the Legislature of any petroleum agreement before it is signed by the Executive.
In our last two articles, we dealt with the King IV Report on Corporate Governance and the 17 basic principles that organisations should embrace to ensure efficiency and effectiveness of operations as well as positive outcomes and impacts in achieving their strategic objectives. These principles have been elaborated in a Code of Corporate Governance that governing bodies and their members should follow. In total, the Code comprises 215 items under five headings, namely, leadership, ethics and corporate citizenship; strategy, performance and reporting; governing structures and delegation; governance functional areas; and stakeholder relationships.