21 March 2013, by Oluajo Babatunde.
Corruption remains a major developmental challenge to Nigeria. According to UNODC sources, close to US $400 billion is believed to have been embezzled from the Nigerian central government between 1960 and 1999. The former Head of State Sani Abacha alone is estimated to have siphoned off the equivalent of 2 – 3 per cent of the country’s GDP for every year of his five year Presidency, between 1993 and 1998. This comes to approximately US $ 34 billion (based on 2012 GDP estimates).
The advent of democracy in 1999 did not make things better. According to a report from the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA), 10 ex-Governors and political leaders in Nigeria embezzled public funds estimated at USD$250 billion within a three year span. The report alleges that most of these funds are hidden in Western banks and offshore centres, while a significant amount is believed to have been laundered through the acquisition of properties, luxury cars and purchase of high net worth shares in blue chip companies.
With law enforcement officials reporting that half of Nigeria’s $ 40 billion annual oil revenueis being stolen or wasted Nigeria stands as a classic example of the damage that corruption can cause in the life of a nation. Despite increased earnings from oil, the Nigerian National Bureau of Statistics reports that around 69 % of the population of Nigeria, that’s 112.47 million people, live below the poverty line of less than a dollar per day. This makes Nigeria the host of the largest population of poor people in Africa.
The role of the private sector
In all this, the private sector has been identified as an active player in the corruption ravaging the Nigerian nation. When public procurement is driven by a culture of bribery, and businesses are able to pay their way out of regulations and tax obligations, citizens suffer.
Oil-rich Nigeria is an attractive playground for ambitious multi-nationals looking to expand. In recent years there have been a number of scandals, including the infamous Halliburton and Siemens corruption cases in which hundreds of millions of dollars of bribes were paid into the pockets of Nigerian public officials to receive favourable tax treatment and to secure contracts in the country.
The need to engage the private sector
In 2009, Nigeria volunteered as one of the fifteen countries to test run the Self-assessment Checklist on the United Nations Convention against Corruption (UNCAC) developed by the United Nations Office on Drugs and Crime (UNODC) under the direction of the Convention’s Conference of States Parties. This assessment included a review of the conformity of Nigerian laws and policies with a number of provisions of the UNCAC.
In 2012 Zero Corruption Coalition (ZCC) conducted a narrower review with the support of UNODC and used the official self-assessment software to assess Nigeria’s implementation of UNCAC articles 12, 21, 22 and 39. These articles relate specifically to the private sector and among other things direct States Parties to encourage cooperation between the private sector and national authorities.
On 1 November 2012, ZCC held a public meeting to present the outcome of this review and the views of Nigerian private sector players were sought and considered. Stakeholders from the organised private sector were in attendance, including representatives of the National Association of Small and Medium Scale Enterprises, compliance officers from around 12 private sector organisations such as banks, media organisations, stock-brokers and hospitality organisations. They acknowledged the role the private sector plays in fueling public sector corruption and acknowledged the potential role they could play in tackling it.
This meeting, as well as both the 2009 and 2012 assessments, revealed that the critical role of the private sector in causing corruption and in the fight against corruption has not been fully acknowledged in Nigeria and the majority of anti-corruption initiatives have been directed to the public sector alone.
Recommendations regarding the private sector
The private sector participants at the November review meeting gave some clear recommendations to help ensure that Nigerian laws regulating the conduct of the private sector are in tune with the provisions of the UNCAC. They recommended that:
- Sanctions for corruption involving the private sector should be reviewed to assess whether they are dissuasive and proportionate.
- To ensure that better records of companies are kept, the Government should decentralise the registration of business entities. This will increase the ease and efficiency of registration. A central database of all private entities in Nigeria should be maintained.
- Monitoring of private sector compliance with relevant laws should be supported by a well-trained Association of Shareholders of private entities.
- Whistleblowing protection should be improved. Policies should be adopted by businesses and shareholders should be encouraged to report bad practices.
- Training on international ethical standards in business should be given to company directors.
- Civil society organisations (CSOs) should collaborate with the private sector to deliver educational campaigns on compliance and initiate more collaborative research and policy work on private sector corruption.
The stakeholders from the private sector left the review meeting in November 2012 with a commitment to work and engage more with CSOs in the run up to the forthcoming UNCAC country review due to take place this year. They plan to use the opportunity to push for the relevant amendments needed to make laws governing the operations of private business entities in Nigerian compliant to the UNCAC prescribed standards. The possibility of submitting a joint civil society and private sector memorandum on specific policy issues and legislative changes during the review process was discussed.
Here we are seeing the beginnings of positive engagement between the private sector, government and civil society working together to monitor and help improve effective implementation of the UNCAC. This is an important step in involving all fronts in the fight against corruption.
About Babatunde Oluajo
Babatunde Oluajo is the National Secretary of the Zero Corruption Coalition (ZCC) in Nigeria. The ZCC is a coalition of over 150 civil society organisations committed to the fight against corruption. He also serves on the Coordination Committee for the UNCAC Coalition as one of the representatives of Sub-Saharan Africa.
- GIBIA Mutual Evaluation Report, ‘Anti-Money Laundering and Combating the Financing of Terrorism’, 7 May 2008, p. 17