Global Financial Integrity

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Fighting the Good Fight Against Corruption and Illicit Financial Flows (IFFs) In Nigeria

By Ijeoma Nwala

During his presidential campaign in 2015, President Muhammadu Buhari promised to end all forms of corruption in Nigeria. His anti-corruption fight has received both praise from international governments, like the United Kingdom, which pledged to support the Nigerian government’s efforts, and criticisms for being partisan and targeting only political opponents. However, the Buhari anti-corruption war has not achieved a significant milestone in the overall prevention of corruption in the country. Nigeria is currently ranked 146th out of 180 countries in the 2019 Corruption Perceptions Index of Transparency International (148th in 2017) and the 14th most vulnerable country out of 125 countries on the 2020 Basel Anti-Money-Laundering Index (33rd in 2017). The aftermath of corruption and IFFs in Nigeria is evident in the current state of the economy with growing inflation, poverty, organised crime networks, insurgency, human rights abuses and unemployment. The Nigerian people are deprived of high-quality public services and infrastructure, and the country loses the opportunity to close the wealth gap. More so, women are disproportionately affected because they are especially dependent on public services.

The efforts of this administration to tackle corruption have focused on two key measures: ramping up indictments, including of high-profile cases, and implementing good governance measures.

The number of indictments of high-profile cases has increased in recent years. The process of ramping up convictions and indictments has, however, been marred by human rights abuses and disregard for the rule of law. Also problematic is the fact that the anti-corruption fight appears to be politicised. This does little to deter criminal activities if they believe that they can avoid investigation and scrutiny by supporting the administration. These problems result in a lack of legitimacy and poor public perception of anti-corruption efforts.

Good governance measures such as the Treasury Single Account (TSA) and the whistle-blower programme were introduced to ensure transparency in the management of public funds. However, the implementation of the TSA has not guaranteed that funds disbursed for development activities are properly managed. The purpose of the TSA is defeated where there is no established procedure to ensure that both the generation and disbursement of public funds are properly monitored. Other issues shrouding the TSA are the use of a monopolised payment platform to facilitate payments into the TSA and the lack of a legal framework for its implementation.

Also, the whistle-blower programme, which was introduced in 2016 as part of the government’s efforts, was short-lived and only sector-specific regulations on whistleblowing remain. Corruption and IFFs involve a complex network of interconnected players from banks, company directors and employees to professionals such as lawyers and auditors. Whistle-blowers play an important role in tackling corruption by reporting the activities of companies, public officials etc. to the anti-corruption agencies. The current whistleblowing policies are not broad enough to achieve the intended purpose. Beyond financial reward, any whistle-blower programme needs to be encompassing and backed up by statute with guaranteed protection from retaliation for the whistle-blowers. In the absence of this legal protection, whistle-blowers have been victimised and discouraged from reporting suspicious transactions which results in the policy’s loss of momentum.

There have been concerns around the adoption of other principles of good governance, such as accountability and transparency, by the administration. In a bid to manage the funds recovered through the anti-corruption measure, the Buhari administration is proposing to create a new agency. This proliferation of anti-corruption institutions will merely be a clog in the already inefficient wheel of anti-corruption efforts in Nigeria. The proposed functions of this new agency are already being carried out by the Central Bank of Nigeria and the Ministry of Finance. A guiding question for the administration should be how well are existing institutions faring? The Central Bank of Nigeria, which is an important government agency and a key institution in the anti-corruption war, has yet to publish its financial statement since 2019 in contravention of legal requirements. There are already a few recommendations which the Buhari administration can implement in good faith in order to ensure transparency and independence of the Economic and Financial Crimes Commission.

In the COVID-19 era and beyond, there needs to be a proactive shift in the policies of the Buhari anti-corruption war for reclaiming IFFs for sustainable development financing in Nigeria. Constant reforms of the policies as well as the political will to ensure the independence and transparency of the anti-corruption institutions, beyond political patronage, are key to ensuring the success of the Buhari anti-corruption war.

Ijeoma Nwala is a fall 2020 Africa policy intern and is currently pursuing a Master of Laws at the London School of Economics and Political Science.