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Thursday, 2 October 2014

How to Tackle Corruption Effectively in Nigeria


By
Sam Ejike Okoye


"The accomplice to the crime of corruption is frequently our own indifference." Bess Myerson. (First Jewish Miss America, 1924-?)

Introduction
Bribery, which is an important aspect of corruption, needs two parties for it to happen: the bribe giver and the bribe taker. In some countries the culture of corruption extends to every aspect of public life, making it more or less impossible to stay in business without giving bribes. The most common bribe-giving countries are not in general the same as the most common bribe-taking countries. The 12 least corrupt countries, according to the most recent Transparency International perception survey, are (in alphabetical order): Australia, Canada, Denmark, Finland, Iceland, Luxembourg, Netherlands, New Zealand, Norway, Singapore, Sweden, and Switzerland. On the other hand, the 13 most corrupt countries are (in alphabetical order): Azerbaijan, Bangladesh, Bolivia, Cameroon, Indonesia, Kenya, Nigeria, Pakistan, Philippines, Russia, Tanzania, Uganda, and Ukraine.

In Nigeria, corruption is akin to cancer. As the great English intellectual, Rev Charles Caleb Colton (1780-1932), put it: "Corruption is like a ball of snow, once it's set a rolling it must increase." Indeed this has been the Nigerian experience with corruption developing to such staggering proportions that it is now not only a bane of the country, but has largely defied present and past efforts to stymie it. The position now is that corruption is so entrenched that anyone hoping to do any kind of business with the Nigerian bureaucracy must take it into account. Indeed the situation is now so bad that even some government officials are alleged to bribe one another to get government business done. But in the political arena, Nigeria has found it difficult to prove corruption, but also impossible to prove its absence. Indeed there are indications that many Nigerians, some of them politicians, retired civil servants, judges, and a few generals, have engaged in corrupt practices. Indeed politicians are often placed in apparently compromising positions because of their desperate need to solicit financial contributions ostensibly for their campaigns, but in reality for rigging elections. They appear sometimes to be acting in the interests of those parties that sponsor them, but mostly they are driven by personal aggrandisement.

For the most part, corruption has bedevilled Nigeria’s political scene encompassing abuses by government officials such as embezzlement and nepotism, as well as abuses linking public and private actors such as bribery, extortion, influence peddling, and fraud. As the award winning US scientist and social critic, David Brin, put it: "It is said that power corrupts, but actually it's truer that power attracts the corruptible. The sane are usually attracted by other things than power." Indeed there is a certain nexus between mediocrity and corruption which so far has been ignored in the Nigerian corruption equation. May be as David Brin suggests, it is the wrong people that get into positions of influence and merit in Nigeria (thanks to “federal character affirmative action based only on arbitrarily created states of origin”). For this reason, the question that Nigerians should be asking is not, who among the moneyed elite class is corrupt? But, who is NOT corrupt? That this must be so is evident from the way many Nigerians today seem to live above their visible legitimate incomes. Otherwise how does one explain the sources for the financing of those luxurious, palatial, stately mansions (that have mushroomed in many Nigerian cities, towns, and even villages), not to speak of the sumptuously lavish social parties and very expensive top-end luxury cars put on display by a large number of businessmen, senior public servants and military personnel, serving and retired. Perhaps the real challenge with tackling corruption in Nigeria is that most of the corruption warriors (in the form of the policy makers, the legislators, the police and the judiciary) pressed into service are themselves not exactly clean. These are the realities that have stared past and present Nigerian leaders on the face as they moan about corruption and pretend to fight it.

Causes of corruption
Although Nigerian leaders in the last twenty to thirty years have made such a sing-song of fighting corruption, it does not appear that any serious effort has been made to address the real causes of corruption. Thus without a proper diagnosis of the causes of corruption, trying to fight it is akin to treating symptoms rather than rooting out the disease itself. This unfortunately appears to be the strategy adopted so far in fighting corruption in Nigeria. We must now attempt to answer the questions that Nigerians should be asking their crusaders of corruption. What indeed are the domestic causes of corruption in one of the world’s most corrupt countries?

It is necessary to observe that aside from the quality, or lack of it, of people running the Nigerian economic and political shows, there are some systemic conditions in the Nigerian polity that promote corruption. To start with, it is unfortunate that power is concentrated in the hands of decision makers who in reality are not directly accountable to the people as is often seen in non-democratic regimes. This is a direct result of Nigeria’s inability since independence to always conduct credible, free, fair and uncontroversial elections to political offices in the country. With political office holders acquiring power through disputable if not illegitimate methods, the situation is not helped by perennial lack of government transparency in decision making. Again costly political campaigns in recent times, with expenses exceeding normal sources of political funding mean that elected officials’ first priority on assuming office is to recoup their election expenses. This is facilitated by the design of marginally relevant prestige projects requiring expenditure of large amounts of public capital. In the subsequent award of contracts for these projects, self-interested closed cliques, ethnic-cum-family members, and "old-boy" networks are favoured. The bulk of the bureaucracy (often poorly paid) and bedevilled with below-living wages and supported by apathetic, uninterested, or gullible populace, become actors and accomplices in the public contracts gravy train. With a weak rule of law in the land and the absence of adequate controls to prevent bribery, the express corruption train rolls on.

But the crux of the present Nigerian corruption problem is the overarching crude oil economy and politics. It is not a secret that “lifting crude oil” is a major form of political patronage in Nigeria since the 1970s oil boom. Indeed since the advent of the oil boom in the 1970s, Nigerians have developed an unhealthy love for easy wealth and luxury goods while at the same time loosing their traditional appetite for hard work, as well as the knack to generate resources and accumulate capital. Instead the national preoccupation now is the sharing of the so-called “national cake” which in an imposed quasi-federal regime has been raised to the high level of state policy via a revenue sharing formula! With the spending of Nigerian oil incomes in the Gowon days being declared to be a problem, Nigerian agriculture (the former mainstay of the Nigerian economy) was abandoned and the many assembly plants that masqueraded as manufacturing industries soon followed suit.

According to allegations made by some members of the House of Representatives, the Nigerian oil industry appears to be a den of corruption. If their allegation is to be believed, no one outside a certain restricted inner circle of government knows exactly how much oil income flows into the national coffers. Not even the legislature could compel the executive to exhibit total transparency in the handling of Nigeria’s oil resources. As if to underline this situation the new Minister of Solid Mineral Resources, Mrs. Oby Ezekwesili, while speaking recently in Port Harcourt at the road show of the Nigeria Extractive Industry Transparency Initiative (NEITI) accused oil and gas companies operating in the country of corrupt practices, and said that was the reason why they avoid disclosure of their annually generated revenue and expenditures.

Indeed for a long time, Nigeria was the only OPEC member without an oil minister. The reason for this anomaly could be that the President, who himself is presumed to not only be clean, but the de facto oil minister, may have believed that no other Nigerian could be trusted with honest management of such a major source of Nigeria’s foreign exchange earnings. But following the conclusion of the recent National Political Reform Conference and the controversy for “resource control” demand by the South-South zone that trailed it, the President perhaps in a deft move to deliver a sop to the South-South zone has now appointed an oil technocrat from Bayelsa State as petroleum minister of state while remaining the de facto oil minister. Nonetheless, it is difficult not to suspect that any transaction shrouded in secrecy, as is the case in the oil industry, may not be free from corrupt practices or even above board. It seems logical that any effort to tackle corruption in Nigeria must start with sanitizing the oil industry, because of its all pervading knock-on effects on other sectors of the national economy.
The effects of corruption
Corruption poses a serious development challenge. In the political realm, it undermines democracy and good governance by subverting formal processes. Corruption in elections and in legislative bodies reduces accountability and fair representation in policymaking; corruption in the judiciary undermines or suspends the rule of law; and corruption in public administration results in the unequal provision of services. More generally, corruption erodes the institutional capacity of government as procedures are disregarded, resources are siphoned off, and officials are hired or promoted without regard to performance. At the same time, corruption undermines the legitimacy of government and such democratic values as trust and tolerance.

Corruption also undermines economic development by generating considerable distortions and inefficiency. In the private sector, corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Although some claim corruption reduces costs by cutting red tape, an emerging consensus holds that the availability of bribes induces officials to contrive new rules and delays. Where corruption inflates the cost of business, it also distorts the playing field, shielding firms with connections from competition and thereby sustaining inefficient firms.

Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. Officials may increase the technical complexity of public sector projects to conceal such dealings, thus further distorting investment. Corruption also lowers quality of standards of compliance with construction, environmental, or other regulations; reduces the quality of government services and infrastructure as is too evident to Nigerians; and increases budgetary pressures on government. This may be the reason why in spite of the unprecedented hikes in crude oil prices that have led to the so-called excess oil revenues, the federal government is still finding it quite difficult to balance its annual budgets.

Economists argue that one of the factors behind the differing economic development in Africa and Asia is that in Africa, corruption has primarily taken the form of rent extraction with the resulting financial capital moved overseas rather than invested at home (hence the stereotypical, but sadly often accurate, image of African dictators having Swiss bank accounts). Also, corruption has been identified as the main cause of poverty and underdevelopment in most African countries. By contrast, Asian dictators such as Suharto had often taken a cut on everything (requiring bribes), but otherwise provided more of the conditions for development, through infrastructure investment, law and order, etc.

Political corruption is widespread in many countries, and represents a major detriment to the well-being of their citizens. Political corruption means that government policies tend to benefit the givers of the bribes, not the general public. Another example is how politicians would draft laws that protect large corporations while hurting small businesses. These "pro-business" politicians are simply returning favours to those commercial enterprises that contributed heavily to their election campaigns.

How to wage a credible war on Corruption.
The establishment of the Independent Corrupt Practices and other Related Offences Commission (ICPC), the Economic and Financial Crimes Commission (EFCC) as well as the Code of Conduct Bureau and its Tribunal is a laudable start on the war against corruption. Unfortunately, though some successes have been registered by these bodies, the general impression is that these bodies have gone after the tail of the monster of corruption rather than its head. It is not helpful that some politicians meanwhile allege that these bodies are being used by the Presidency as instruments of blackmail or vendetta against political opponents. There is therefore a need to expand the activities and range of instruments available to these bodies.

Indeed, an effective war on corruption has to be fought on, at least, the three axes of (a) Prevention, (b) Detection, and (c) Sanctions and Restitutions. While to date some efforts have been made in terms of the prevention (e.g. the Due Process mechanism) and sanctions of corruption offenders, present efforts being made to detect corruption are at best half-hearted. It is no wonder that when some time ago the Nigerian media accused a former military head of state of embezzlement of public funds, Mr. President was to retort that he would take immediate action if he is provided with actual evidence of wrong-doing of this particular predecessor. Yet the President himself announced that he has received the names of some naughty public officials who have been reported to him by Nigeria’s western creditors as having siphoned and are still siphoning some huge resources abroad. Clearly Nigeria needs robust corruption detection and bursting agency as up and doing, and as zealous as the Nigerian Police Force sometimes demonstrates at road check points, and the SSS always exhibits in matters of the President’s personal security.
Prevention of corruption

If corruption is to be given a short shrift in Nigeria, then the social, business and bureaucratic environments must be corruption-hostile rather than friendly. This means that there must be well funded comprehensive public education and enlightenment programs on the nature of corruption as well as the negative effects of corruption in the Nigerian polity. This is a job that the National Orientation Agency (NOA) as well as the Federal and State Ministries of Information must undertake. This could take the form of well tested public enlightenment techniques such as the use of hand bills, public posters, print media adverts and Radio and TV jingles. At the same time, the citizenry must be made aware of the stiff penalties that await those to be engaged in corrupt practices. To this end, certain legal instruments must be put in place to enable unfettered corruption detection, arraignment and conviction to be facilitated. In this regard, appropriate legislation should be enacted along the following lines:
A law compelling all banks to report to both the appropriate Federal and State Boards of Inland Revenue/Tax Authorities, as well as the law enforcement agencies any deposits, transfers or withdrawals of funds in excess of a specified amount (e.g. N5 million) by any individual. Such a law should provide for the automatic State confiscation if it turns out that the sources of such funds are proved in a court of law to be illegitimate or are connected with illicit money laundering.

A law requiring tax in the form of “capital gains tax” to be levied against people who appear to have come into large sums of money illegitimately or even legitimately, other than as a result of a legitimate business transaction (for example, accruals to registered businessmen who have declared taxable business profits), or otherwise sums received by a salaried person as part of an emolument package (for which normal income taxes would have been paid).

A law requiring the Federal and State Ministries responsible for Lands and Housing to make it a condition for the granting of Certificates of Occupancy, as well as for approval of building plans on registered plots of land, to require applicants to indicate legal sources of funds for the development or purchase of a landed property, as well as evidence of income taxes being paid that are commensurate with the acquisition or possession of such valued property in question.

A law enabling the Federal and State Tax Assessment and Collection Agencies as well as the Anti-Corruption Intelligence Agency (discussed below) and the Police to demand explanations for large acquisitions and expenditures (for any purpose including donations and pledges at “public launches“and other events) of large sums of money beyond the legitimate incomes whether of public servants or private entrepreneurs, and to impound same when sources for such funds cannot be justified in a court of law.

A law requiring the mandatory public declaration of the assets of the “immediate family” (meaning husband, wife and children) of all specified senior public officers on appointment or assumption of duty as well as after disengagement. In addition such assets (which must be covered by the Freedom of Information Act) must be verified and monitored routinely by the Anti-Corruption Intelligence Agency and the EFCC. (In this regard, it is relevant to observe that Nigerians can be very creative over asset declaration. Hence an elected or appointed official who targets stealing 100 million naira during his/her term in office could, for example, declare 105 million naira upon assumption of office. Usually, the declaration is taken on its face value; no further attempt is made to ascertain that the official is actually worth the declared amount. He/She subsequently would steal 100 million and when he/she is about to leave office, he/she declares 100 million plus whatever little money he/she might have made legitimately. No one can query the loot because it was declared when the official came into office. Hence what the government should do is to demand physical evidence of the declared assets and at the same time establish their legitimacy).
A law should be enacted, declaring all crimes of corruption “federal crimes” justiciable in federal courts or tribunals.
Finally, a law should be enacted creating Federal Tribunals for Corruption offences (FTCO). The powers of such courts, sitting in Abuja and State capitals, and the form of sentences within their scope must be carefully spelt out, and the court or courts of final appeal specified.

It is relevant to mention that virtually every American is wary of the US Internal Revenue Service (IRS), because it can land on anyone’s doorstep, at any time and indeed, the IRS has the power to examine anyone’s lifestyle and to ask for explanations about one’s sources of income, and woe betides anyone who is unable to account for any newfound wealth. That in a nutshell is the sort of social environment that must be established in Nigeria if a credible start is to be made in the difficult job of corruption prevention and eradication.

Detection of corruption
It is often said that it is difficult to nail down corrupt officials, but it has to be observed that such circumstantial evidence as someone’s luxurious or flamboyant lifestyles, could easily give away a corrupt person and lead to detection. Unfortunately, Nigerians are not in the habit of questioning the sources of sudden wealth. Instead those who flaunt unexplained sudden wealth are extolled. Moreover, it has to be understood that corruption is a crime of calculation not passion. When bribes are large, the chances of being caught small, and penalties if caught meager, many officials will succumb to corruption. The problem in Nigeria is that when corrupt officials are caught, they are not punished severely. Most of the time, the authorities go through the motions (e.g., fanfare in the media about the apprehension and trial but then nothing happens). Severe sanctions that are actually required to act as a deterrent are not applied. Nevertheless, corruption like crimes relating to sedition and national security are often hatched in secrecy and without an effective intelligence facility, it would be difficult if not impossible for government to expose and scuttle corruption. Because corruption is a very serious crime, its detection must follow a similar route as the detection of other crimes which are often aided in the advanced countries by “wire tapping” and the use of secret informants. Hence Nigeria should give the country’s law enforcement agencies the leeway to use electronic intelligence gathering techniques to catch offenders of corrupt practices. In looking for evidence of corrupt deeds of accused persons, government should set up a corruption intelligence agency similar to the “E Branch” and the Criminal Investigation Division (CID) of the Nigeria Police Force. In other words, there is a need for government to establish a well funded Anti-Corruption Intelligence Agency (ACIA) which can be a stand-alone agency that could have a relationship with the present Independent Corrupt Practices and other Related Offences Commission (ICPC) as well as the EFCC, but which preferably should report to the Federal Minister of Justice (which ideally should be different from the Attorney-General of the Federation). The legislation establishing the ACIA should provide for powers of arrest and detention (for a limited short period) of accused or indicted persons as well as the power to use electronic intelligence techniques to apprehend their quarry. Efforts should also be made by the Presidency and the National Assembly to ensure that funding of the ACIA is made part and parcel of the national security vote. But if different, the ACIA funding must be comparable in size and handling to the security vote, since corruption in the end impinges very significantly on overall national security.

Sanctions and restitution from those found guilty of corruption.
Before discussing methods and forms of trial and sanctions of those indicted of corruption, it is necessary to observe at the outset that it is immoral to allow those indicted of corruption offences to be allowed to still enjoy their alleged loot while their trial is in progress. In this regard, there should be established, interest yielding escrow accounts maintained by the ACIA where any seized funds suspected to be associated with corrupt activities will be lodged. If at the end of trial, the accused persons are found innocent, all seized assets must be returned in full and any seized funds returned with commensurate interests, except that such persons will not be entitled to subsequently sue the ACIA claiming damages for any wrongful arrest or detention.

However application of sanctions on corruption offenders must always be a matter for the courts of the land. However in handling corruption cases, the current arcane court processes and rules that lead to delayed justice because of legal technicalities and endless injunctions and adjournments of court proceedings based on contrived court motions and legal arguments by counsels on both sides must be dispensed with in corruption cases. To this end, the Nigerian Bar Association (NBA) should come up with home grown fast track procedures, including rules of evidence, for handling cases in Corruption Tribunals. Indeed election tribunals could also benefit from such fast track procedures to deal with election results petitions arising from election malpractices, which represent a veritable form of political corruption.
Where persons or group of individuals or corporate bodies have been convicted of corrupt practices, any funds or assets seized by law enforcement agencies must automatically be forfeited to the relevant arm of government which has been a victim of such corruption. In addition, persons convicted of corrupt practices must be disqualified from holding any public office for a specified period, such as ten years. In the case of convicted corporate bodies, sentencing will include heavy fines as well as the suspension of any legal instruments that facilitate their existence and enable them to operate in Nigeria. In addition, the executive directors of corporate firms convicted of corrupt practices will be debarred from serving on the boards of any publicly quoted companies or holding any elective political office, for a specified period, such as ten years.

Epilogue
"Power does not corrupt men. Fools, however, if they get into a position of power, corrupt power."
–George Bernard Shaw

It is often claimed that corruption like prostitution cannot be wiped out entirely in any society. This may well be so. But it seems evident from the examples of some virtually corruption free countries, like the Scandinavian countries, that any country, that can muster the will, can indeed reduce corruption to the barest minimum. This is the gauntlet that Nigeria must embrace. For a start, the war on corruption will be bedevilled by quite a few people of questionable integrity that have already worked their way into positions of political (executive and legislative), judicial, corporate and bureaucratic authority and influence. Hence Nigeria must draw a line somewhere and grant amnesty to past offenders of corruption up to an arbitrarily set cut-off date to be determined. But the key to preventing and controlling further corruption crimes is to implement such measures geared towards prevention, detection, sanctions and restitutions as suggested in this article. These measures, particularly the sanctions, may appear draconian and stringent. This may not sit well with some Nigerians who may feel they will loose out. Indeed from the experience at the recently concluded National political Reform Conference(NPRC), some Nigerians did not seem to have the stomach for the imposition of stiff sanctions on those that destroyed the Nigerian economy and rendered at least a hundred million Nigerians destitute, and in like manner left hundreds of thousands (including children) dying annually because of malnutrition and lack of adequate medical care (a crime that compares well with genocide) arising from official corruption and poor governance. The debate at the NPRC, about disqualifying former military rulers (who came to power by force) from occupying any elective offices, soon took a sectional coloration and vehemently resisted by some retired military officers. In the controversy, disqualification (which in the present constitution even applies to illiterates and criminals) was simply equated to a blanket ban.

When all is said and done, Nigerians must not forget where the country would have been today had they not been subjected to the misfortune of being ruled by selfish and self serving leaders. But it is not enough to start a credible war on corruption. The Nigerian elites and the political class in particular, must get their acts together and desist from the malaise of indifference that has overtaken them since the military entered into national governance and politics. They owe it to their compatriots to politically re-engineer their country by restoring in Nigeria the true structures of federalism dismantled by their erstwhile military rulers. Even so, it is one thing to politically re-engineer the country and another thing to make it work. After all, one cannot hope to achieve a victory in a grand prix by putting a bad driver in the driving seat of the best engineered racing car. Hence the rules of the political game in Nigeria must be reviewed to open up the political space and to make it attractive for Nigeria’s best minds, as well as men and women of ability, commitment and integrity to volunteer to serve the people by joining the partisan political arena without the handicap of not having the financial clout that present day politicking demands.

Nigeria has indeed been endowed (thank God!) with all the human and natural resources it takes and requires, to become a great African and world power. But she cannot achieve that potential by her relying on mediocrity and people of questionable integrity to run her affairs.
Sam Okoye, a former Dean of the Graduate School at the University of Nigeria, Nsukka, and former Science Attaché at the Nigeria, High Commission, London, writes from London.

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