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Nigeria Corruption

Nigeria's vice president said on May 03, 2016 that the previous government stole some $15 billion of public money through fraudulent arms deals. Vice President Yemi Osinbajo said the money was lost to "corrupt practices in... security equipment spending" during the administration of former president Goodluck Jonathan. The vice president, in a statement issued by his Senior Special Assistant on Media and Publicity, Laolu Akande, said: “When you look at the sheer amount of money that have been embezzled, the sheer amount of money lost from any of these various cases of corruption, you will find that far too much has been lost. ... It was discovered a few days ago that the total amount of money lost just to corruption in the provision of security equipments in the military is closer to $15 billion.”

The $2.1 billion that has been linked to former National Security Adviser, Sambo Dasuki, is just one transaction out of the $15 billion arms deal fraud. The majority of the companies involved in the arms deal are owned by serving military officers. They registered these companies using the names of their cronies.

A 13-man committee was inaugurated on 31 August 2015 on full audit of the procurement of arms and equipment in the Armed Forces and Defence sector from 2007 to date. The president’s media aide Femi Adesina noted that "troops fighting the insurgency in the North East were in desperate need of platforms, military equipment and ammunition. Had the funds siphoned to these non performing companies been properly used for the purpose they were meant for, thousands of needless Nigerian deaths would have been avoided."

On November 18, 2015 Nigeria's president ordered the arrest of a former national security adviser who was accused of stealing billions of dollars meant to buy weapons for the fight against Boko Haram militants. Police surrounded the house of Sambo Dasuki in the capital, Abuja, and refused to let him leave, despite a judge's ruling that Dasuki can go abroad for medical treatment.

Dasuki was the national security adviser to former president Goodluck Jonathan, who current President Muhammadu Buhari defeated in the March elections. The government said 17 November 2015 that between 2012 and 2015, Dasuki awarded fake contracts worth more than $2 billion for fighter jets, helicopters, bombs and ammunition that were never supplied to the Nigerian Air Force. It said his office also awarded $2.4 billion in "failed contracts."

Interestingly, it was noted that the amount of foreign currency spent on failed contracts was more than double the $1bn loan that the National Assembly approved for borrowing to fight the insurgency in the North East. The Report notes that contracts for purchase of 4 Alpha Jets, 12 helicopters, bombs & ammunition, awarded by former NSA Dasuki, were fictitious.

Probes conducted by the National Assembly into various cases of crude theft, pipeline vandalism, misappropriation, Joint Venture agreements, missing crude revenue in Nigeria’s corruption-tainted oil and gas sector from 1999-2014, revealed that about $15bn was lost to fraud while a whopping $6.8bn subsidy went unaccounted for. A total of 18 probes were carried out by different legislative committees. This information is contained in a study released by the the National Institute for Legislative Studies (NILS). According to study, released to the public on 20 October 2015, the period under review, also witnessed the alleged missing n500bn sure-p claims for oil subsidy for a period of time. Furthermore, about $16bn could not be accounted for in the power sector while about N2trillion was not remitted by the ministries, departments and agencies (MDAs).

Nigeria is not the only nation consistently ranked high on Transparency International's Corruption Perceptions Index; however the reach of Nigeria's fraud peddlers exceeds that of most other nations. There are numerous accounts of retirees and even churches losing many thousands of dollars when Internet users respond to these fraudulent requests. Those who try to obtain someone else's money are as criminal as those who initiate the scam.

Many people who use the Internet have received solicitations to claim foreign funds abandoned in some foreign bank account. These schemes, known to insiders as 419 Scams after the provision in the Nigerian law outlawing them but more generally simply as Nigeria Scams, are among the issues often cited by those who know little else about Nigeria.

The penchant for cold cash was widespread. Procurement contracts in particular were notorious for graft. The bigger the project, and the longer it takes to complete, the greater the opportunity to divert cash. Thus big projects in Nigeria routinely take far longer than planned and cost far more than originally budgeted.

The Nigerian Government has made an effort to address this problem. At the heart of corruption in Nigeria, however, are those who wield government authority. According to a report done by Nigeria's Economic and Financial Crimes Commission in 2005, the country's excessive government stole or misused about $400 billion during the last four decades of the 20th century. That amount is about equal to all of the aid given to Africa by Western donors during the same period of time.

One of the earliest government scams was the cement scandal of the early 1960s in which a grand public housing plan was announced where vast quantities of cement were purchased from foreign contractors, but far more cement was ordered than was needed. Overloaded Nigerian ports saw ships loaded with cement backed up for miles out to sea. Corrupt officials made profits, however, from selling cement import licenses. But the promised housing was never constructed on the scale that had been envisioned.

Another 1960s scandal involved an aluminum smelter that was supposed to be part of the industrialization of Nigeria. Unfortunately, corrupt manipulators drove the cost of the smelter up to $2.4 billion, which was 60 to 100 percent higher than comparable plants elsewhere in the developed world. Once completed, the smelter never operated above a fraction of its capacity.

More recently, in 2003, a commission of inquiry was appointed to investigate the collapse of Nigerian Airways. That commission found that former top airline officials, Federal cabinet members and high-ranking civil servants were to blame for the nation's airlines collapse through waste and misappropriation of funds.

One of the hallmarks of Nigerian corruption is that top officials most responsible for the looting of public enterprises are almost never punished for their crimes or forced to return the funds that they have stolen. Even President Obasanjo, who is seen as a campaigner for transparency, has failed to bring to justice the many corrupt officials who have yet to answer for their crimes.

Corruption in Nigeria squanders the vast resources available to this nation and has been a factor in the country's brain drain as well. Tens of thousands of Nigerian professionals have immigrated to America and other developed countries, where they can operate in environments in which those who loot their companies or steal government funds can expect prosecution.

After failing to successfully tackle corruption with the Independent Corrupt Practices Commission, the Nigerian Government in 2003 created the Economic and Financial Crimes Commission. Its initially limited mandate which focused on 419 fraud and other business crime now appears to include government corruption as well. Government actions in pursuit of greater transparency seem to indicate a renewed commitment to attacking high-level corruption. In December 2003, several prominent cabinet members were removed, and former ranking members of the ruling party were arrested, following investigation into the questionable national ID card scheme that year.

Fraud in programs designed to develop the oil-rich Niger delta region have left its residents bitter and frustrated and lacking in faith in reforms offered by their government. Every oil company official kidnapped or killed and every pipeline ruptured threatens global energy supplies and drives up the price of oil worldwide. The audit of Nigeria's oil industry as part of its commitment to the Extractive Industries Transparency Initiative is a good sign that the Nigerian government realizes that accountability must be established. Over a period of about 18 months some $20 billion in oil revenues had gone missing from the Nigeria National Petroleum Corporation (NNPC), a state-owned firm that manages the government’s shares in oil companies and pays subsidies for fuel imports. Even murkier are losses of crude oil being pumped out of the country. Oil theft, which is euphemistically known as bunkering, is thought to account for anything from 100,000 to 500,000 barrels of oil a day, syphoned off from pipelines or illegally pumped.

At the inception of the administration President Musa Yar’ Adua vowed to frontally fight corruption in the polity. Some critics have even accused the administration of insincerity in its battle against graft. One of the anti- corruption agencies which Yar’ Adua inherited is the Independent Corrupt Practices and Other Related Offences Commission ICPC headed by Justice Emmanuel Ayoola. For the retired Supreme Court judge the nation should fight absence of integrity rather than corruption. "What we need to do is to erase the popular mentality that some people are untouchable. Once we are able to do that, we will get a cleaner society. But the thing is to educate the people, change their attitude and remove the big-man / small-man-mentality."

The cost of all this graft vastly exceeds the actual amounts stolen. Investors are reluctant to put money into a country if they cannot be sure that contracts will be honoured. Local businesses deliberately stay small, hoping to stay beneath officialdom’s radar. Citizens are generally loth to pay taxes because they assume the money will be stolen. Billions of dollars in state spending are wasted on useless projects.

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Page last modified: 03-05-2016 19:45:36 ZULU