$1 billion per year lost to corruption: a Nigerian saga

A protester sports an anti-corruption T-shirt in Lagos.

$1 billion per year lost to corruption

Recently, AAF reported on the multi-faceted PR efforts of the new Buhari regime to clean up the soiled image of “corrupt Nigerian politics” — among other things, by staging photo ops with World Bank leaders, charging former government officials with bribery, and moving ahead on basic appointments.

Today, the Guardian reports that the Nigerian Minister for Information, Lai Mohammed, “kicked off a corruption awareness campaign appealing to Nigerians to join the fight,” noting that the previous regime’s embedded corruption had “enriched a small elite but left many Nigerians mired in poverty, despite the country being Africa’s top oil producer and having the continent’s biggest economy.”

AAF spoke with John Oxenham, a legal expert on anti-corruption measures with Africa advisory firm Pr1merio.  Oxenham comments:

“The Buhari administration is finally making good on its promises, it would seem, as it had thus far been slow to implement even the most basic of administrative tasks, such as appointing a proper cabinet.  As previously pointed out on your site, the visit with Ms. Lagarde and her advisors serves to enhance visibility and (hopefully) honest dedication to the anti-corruption efforts.  At Primerio, we work with several foreign private entities that express concern over doing business in Nigera, given its reputation.  While we can advise on compliance and risk-avoidance (keyword FCPA etc.), the Nigerian government’s efforts to stamp out corruption from within are helpful, as well, in developing a more robust foreign-direct-investment climate.”

That said, the Buhari camp must be careful not to create the appearance of using the “war against corruption” as a sham front for silencing the opposition under the guise of rooting out fraud.  “Employing the help of the courts — presumptively more impartial and fair than the political process — is therefore key to the government’s fight against graft in Nigeria,” says Andreas Stargard, also with Primerio.

“The estimated $1 billion per year lost to corrupt dealings over the past 7 years is staggering, especially when taking into account that these are merely the official figures — our Africa economists estimate that the actual loss to corruption amounts to an even larger share of the (significant) Nigerian GDP.”

And so the Nigerian saga continues…

Advertisements

From Managing Director to President: Get rid of corruption!

IMF’s Lagarde to Nigeria’s Buhari: Country needs to strike balance, yet ensure long-term anticorruption measures

By Michael James Currie.

The managing director of the International Monetary Fund, Christine Lagarde, welcomed Nigeria’s anti-corruption campaign which has been significantly pushed by President Buhari who was elected in May 2015.

The Buhari administration is moving towards developing a strong independent central body to deal with corruption in one of Africa’s wealthiest countries. The task will not be easy as their does appear to be a degree of consensus that the Nigerian judiciary is in itself corrupt and inefficient and cannot meaningfully tackle corruption without substantial reform.

An expert on African anti-corruption measures, Andreas Stargard, with Africa advisory firm Pr1merio, notes:

“The apparent inability by the Buhari administration to make timely ministerial appointments (which were over half a year delayed) and its failure to create a dedicated anti-corruption ministry do not bode well for a solely internally-driven strategy to combat governmental misconduct.  In our view, having Ms. Lagarde and her advisors (as well as privately outsourced firms) looking closely over the shoulder of the current administration would only serve to strengthen any existing anti-corruption efforts underway in Nigeria, and we’re happy to see the meeting took place as a first step in the right direction.”

International Monetary Fund Managing Director Christine Lagarde (R) shakes hands with Nigeria’s President Muhammadu Buhari (L) as Nigeria’s Central Bank Governor Godwin Emefiele (Far Right) and Nigeria’s Vice President Yemi Osinbajo (Far L) look on after their meeting at the Presidential Villa in Abuja, Nigeria January 5, 2016. REUTERS/IMF Staff Photo/Stephen Jaffe/Handout

International Monetary Fund Managing Director Christine Lagarde (R) shakes hands with Nigeria’s President Muhammadu Buhari (L) as Nigeria’s Central Bank Governor Godwin Emefiele (Far Right) and Nigeria’s Vice President Yemi Osinbajo (Far L) look on after their meeting at the Presidential Villa in Abuja, Nigeria January 5, 2016. (c) REUTERS/IMF Staff Photo/Stephen Jaffe/Handout

A further challenge, however, in the fight against corruption is that Nigeria is on the brink of a credit crunch due to the low oil prices which brings about additional considerations that must be taken into account when developing and implementing anti-corruption policies.

One of the Buhari administration’s most dramatic moves in its fight against corruption was to issue a directive (which came into effect in September 2015) that all income generating federal institutions pay their revenues into the central bank as opposed to local banks. This would see an estimated $6.6 billion flow from local banks to the central bank.

Economists had warned that a move such as this may put pressure on the Country’s financial position in the short term given that Nigeria is facing a credit crunch and there is already minimal lending going on.

The IMF has also pointed out that Nigeria is overly reliant on oil and in order to ensure long term stability, anti-corruption measures must be coupled with a move away from relying so heavily on oil.

Nigeria’s fiscal situation must be closely monitored to evaluate the impact of Buhari’s policy changes on the economic landscape in Nigeria, however, it does appear at this stage that the anti-corruption campaign will bring about long terms benefits which outweigh short term fiscal concerns.