April 8, 2017

Nigeria's story of corruption is instructive for SA’s government

’The cash-strapped Nigerian government’s latest corruption-fighting campaign has led to the recovery of more than $150m in looted funds in just a few months’

Business Day, 27 March 2017

By Dianna Games

There is a new game in town in Nigeria — whistle-blowing. The cash-strapped government’s latest corruption-fighting campaign has led to the recovery of more than $150m in looted funds in just a few months. This does not include the $9m in cash recently recovered from a former executive of the state petroleum company, the Nigerian National Petroleum Corporation, as a result of a tip-off.

The largest amount recovered — nearly $137m — was found in a commercial bank account where stolen funds were kept under a fake name, according to the government. Other recoveries emanating from tip-offs have also been large, running into millions of dollars. Although just the tip of the iceberg, the successes to date highlight the scale of the problem.

In December 2016, the government of Muhammadu Buhari approved the Whistleblowing Programme and Supporting Policy to boost the fight against corruption. The policy offers whistle-blowers anonymity and 2.5% to 5% of the amount recovered from the information they provide.

Although Buhari made the fight against corruption a key plank of his election campaign, keeping his promises has been difficult. Graft is an intrinsic part of the environment in Nigeria, a scourge built up over decades with tentacles reaching into almost every part of society.

Buhari’s campaign was effective in the early days of his administration. His strong anti-graft message made corruption unfashionable in Nigeria. Overt criminality in this regard started going underground and people became fearful of being targeted, not just because of the consequences but because of the associated moral taint.

But as the government tried to fight fires on many fronts, the campaign drifted and few scalps were taken.

The corruption-fighting body itself – the Economic and Financial Crimes Commission – has been criticised for failing to tackle corrupt politicians while being overzealous in its tackling of minor crimes and allegedly being paid by high rollers to focus on their adversaries.

But money talks, and by offering a monetary incentive, the campaign has started moving again. There is little downside. Some people get rich through the incentive payments, but the government repossesses money it is unlikely to find without a deep throat.

Three months into the campaign, the government has received 282 tip-offs, of which 154 were actionable.

They involve many areas of graft, which include contract inflation and conversion of government assets to personal use, ghost workers, payment of unapproved funds, improper reduction on financial penalties, failure to implement projects for which funds have been allocated and embezzlement of donor funds. 

 
 There has been the usual criticism that the campaign amounts to a witch-hunt of former officials and supporters of the former governing party, displaced by Buhari’s All Progressives Congress party in 2015.But the government has stood its ground, saying it is simply tackling the "primitive and mindless looting of the national treasury under the last administration".

This story has many lessons for SA. The insidious corruption creep in Nigeria was overseen and cultivated by successive administrations, overtly and by omission. Its deep reach into the economy has hollowed out the state and undermined inclusive growth. It has become so pervasive that it is proving very difficult to tackle, even with strong political will in place at the highest levels to do so.

SA, under the administration of Jacob Zuma, is heading down this road. It is not too late, yet, to turn this around, but it cannot happen when the state itself is the driver of corruption.

• Games is CEO of business advisory Africa @ Work

 

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