Economic Confidential

For the 18th year running, Transparency International, the leading civil society organisation fighting corruption worldwide, is set to release its 18th annual Corruption Perceptions Index on December 5 2012.

Although there has been an upward movement for Nigeria on the ladder, there is little cheer for citizens as evidence and perception of pervasive corruption permeates the fabric of the society.

This year’s index ranks 176 countries/territories by their perceived levels of public sector corruption in an index drawing on 13 surveys covering expert assessments and surveys of businesspeople.

The Corruption Perceptions Index is the leading indicator of public sector corruption, offering a yearly snapshot of the relative degree of the corruption problem by ranking countries from all over the globe.
2012 has been a particularly revealing year for Nigeria regarding the level and incidences of corruption within the polity.

The year opened with revelations that petroleum marketers have been fleecing the treasury of trillions of naira through spurious claim on petroleum subsidy. On April 18, the Ad-Hoc Committee set up by the House of Representatives to investigate the implementation of the subsidy regime submitted its report, which recommended that the Nigerian National Petroleum Corporation (NNPC), Petroleum Products Pricing and Regulatory Authority and some petroleum marketing companies be made to refund N1,067,040,456,171.31 to the Federation Account being unlawful payments made to them.

It also noted that that there were marked differences in the amount paid as subsidy; While the committee established that the total subsidy payment as at 31st December 2011 was N2,587.087 Trillion, the office of the Accountant General of the Federation put the figure at N1.6 Trillion as against N1.7 Trillion quoted by the Central Bank of Nigeria (CBN).

It also recommended that the companies that sourced for and obtained foreign exchange for the purpose of importing petroleum products, but which failed to do so, be investigated and properly prosecuted by the relevant anti-corruption agencies and that management and board of the NNPC and the PPMC be overhauled to make it more efficient, while thorough investigations be carried out to determine the individuals in the agencies involved for due criminal prosecution.

It was later discovered that in the course of its work, even the anti-corruption committee became enmeshed in corruption by striking deals with alleged offenders by demanding and obtaining bribe from marketers and other individuals.

Later in the year, the executive arm also instituted another body to still look into monumental fraud in the subsidy regime.

Then came the disclosure of the stealing of N39 billion from the police Pension Fund allegedly by a Task Team that was set up some years ago to plug loopholes identified in the scheme. Incidentally, the Senate committee that investigated the scam was later accused of also demanding billions for it to look the other way.

While appearing before a Senate committee last month, Chairman of the Economic and Financial Crimes Commission, Mr Ibrahim Lamorde, declared that it is difficult to fight public officers that loot the treasury because former state governors and public officers facing corruption charges have adopted various strategies and use legal lacuna to delay or evade justice.

The fact is that whereas EFCC has in 2012 alone recorded over 200 convictions in various courts across the country, they are mostly advance fee frauds relating to the ‘Yahoo Yahoo’, the commercial cases, the executives of financial institutions that are involved in currency trafficking. However, the cases that most people are interested in their conclusion are those before the Supreme Court.”
In October, the Nuhu Ribadu committee set up to determine how much government is being owed in the petroleum sector submitted a report, which indicated that Nigeria may have lost $29billion in the sweet-heart gas deals with major oil companies, such as Shell and Total while crude oil theft is reaching an alarming level of 250,000 barrels daily at a cost of $6.3billion a year in the last 10 years.

The 146-page study covers the year 2002 to 2012 held that Ministers of Petroleum Resources between 2008 and 2011 handed out seven discretionary oil licences, but that $183m in signature bonuses was missing from the deals. Three of such oil licences were awarded since Alison-Madueke, current Petroleum minister took office in 2010.

The report concluded that oil majors Shell, Total and Eni made bumper profits from cut-price gas, while oil ministers handed out licences at their own discretion. This, while not illegal, did not follow best practice of using open bids. Hundreds of millions of dollars in signature bonuses on those deals were also missing, it said.

And despite denials and pretences from officials, global audit and financial advisory firm, KPMG, last month rated Nigeria as the most fraudulent country in Africa, with the cost of fraud during the first half of 2012 estimated at N225 billion ($1.5 billion).

Africa Fraud Barometer was instituted this year, by the firm which measures fraud in Africa and asses the fraud risk that confronts companies in their operations. In another report, KPMG identified Nigeria, Kenya and South Africa as accounting for 74% of the total number of cases on the African continent, with Nigeria recording the highest overall value of fraud in the first half of the2012. It observed that Nigeria’s fraud profile has been compounded by fraud and corruption in the oil sector, with “bribes in the private and public sector, misappropriation, and contract inflation” as common forms of fraud.
In 2011, Nigeria ranked 143rd out of 183 surveyed countries in terms of public perception of corruption by Transparency International (TI), dropping nine places from her ranking of 134th in 2010 and maintaining her score of 2.4 out of a possible 10 marks, same as in the previous year.

In Africa, Botswana came first with a ranking of 32nd and a score of 6.1, while Cape Verde emerged the best-ranked country in West Africa with a ranking of 41st and a score of 5.5. Ghana, was, however, ranked 69th globally, with a score of 3.9.

TI said in 2011 that corruption continued to plague too many countries around the world and showed some governments failing to protect citizens from corruption, be it abuse of public resources, bribery or secretive decision-making.

“This year, we have seen corruption on protestors’ banners be they rich or poor. Whether in a Europe hit by debt crisis or an Arab world starting a new political era, leaders must heed the demands for better government,” said the Chair of Transparency International, Huguette Labelle.