What a US$3.3 billion tax break means for Nigeria's children | ActionAid UK

Steven Frost

Campaigns Team

A new ActionAid report reveals that the Nigerian people lost out on a whopping US$3.3 billion after some of the world’s biggest oil and gas companies were given a ‘holiday’ from paying tax. Here’s what this means for the people of Nigeria, and why women and girls are the hardest hit. 

Women and girls are often the hardest hit by tax dodging
Elohor Siakiere, pictured, lost her baby in childbirth due to underfunded health services. Meanwhile, big business has been given big tax breaks in her region.

Taking a break from paying tax

A new ActionAid report, 'Leaking Revenue – how a big tax break to European gas companies has cost Nigeria billions (pdf)', shows that from 1999 to 2012 the people of Nigeria lost out on US $3.3 billion in taxes because of a tax break granted to some of the world’s biggest oil and gas companies, including Shell, Total and ENI. Broken down, that means each company managed to avoid paying the following amounts:

US$1.668 billion – Royal Dutch Shell
US$977 million - Total
US$677 million – ENI

It's unbelieveable. And yet it's considered completely normal. These kinds of breaks are all well and good for profit-rich companies, but what about the public services this money could pay for, and the people who so desperately need them?

The US$3.3 billion lost to this tax holiday was more than the Nigerian Government’s entire education budget for 2015

Paying the price for a leaky system

Education is essential to giving children the skills and knowledge they need to make decisions about their own lives, and pull themselves out of the cycle of poverty. So when Mrs Dafe Rose joined Abuator Primary School as a teacher in the oil-rich region of the Delta State, Nigeria, she could have been forgiven for thinking she was joining a well-equipped school.

Unfortunately, the reality couldn't be more different. 

Mrs Dafe Rose points out the unfinished classroom which has collapsed into ruin.

Mrs Rose found that the school had no library, no toilets, no blackboards and, crucially, no educational materials. The school only has three rooms which cater for students from grades 1 to 6. That means there aren’t even enough walls to separate the different classes – the school has to use planks and sheets instead.

A Nigerian classroom with year groups separated by sheets

The kindergarten children at Abuator Primary School have it even worse. They take lessons under a mango tree in blistering heat. Poisonous soldier ants frequently drop from the tree and crawl on the children’s skin.

Imagine how these children’s education could improve if companies paid their fair share of tax.

Children at Abuator Primary School studying under a mango tree.

Why tax matters so much for women and girls

For women and girls, funding for services like education is more important than ever. Since many countries, particularly Nigeria, traditionally prioritise boys' schooling over girls' - if education is poor quality and expensive because of inadequate funding, girls are even more likely to miss out.

Add to this the fear instilled by terrorist group Boko Haram, who are against girls' education, in many parts of Nigeria and girls are even less likely to risk their lives to go to school.

With 43% of girls in Nigeria being married before their 18th birthday - usually to much older men, helping girls to start and finish school is essential to them avoiding a marriage that can often be a life-time of abuse - it is the key to girls' indpendence, happiness, and their very survival.

What should be done to make tax fair

ActionAid is working with communities to improve education in Nigeria - and will continue to do so. But ultimately it is governments' responsibility to make sure there is enough money to fund vital services. And it's multinational companies who have a duty to make sure they don’t exploit the countries where they work.

We're calling on resource-rich governments and multinational companies to do something about it. They must be transparent in their tax dealings and stop handing out huge tax breaks, and companies must start paying their taxes responsibly. People in developing countries deserve a fair shot at leaving poverty behind.

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This webpage has been produced with the financial assistance of the European Union. The contents of this publication are the sole responsibility of ActionAid UK and can in no way be taken to reflect the views of the European Union