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Center for International Private Enterprise

ECONOMICREFORM Feature Service® July 16, 2012

Checkmating the Malaise of Corruption in Nigeria Chukwunonso Ogbe

Article at a glance • Evidence suggests that corruption takes on numerous forms and continues to run rampant throughout Nigeria. • Corrupt acts have far reaching consequences that can affect all levels of supply and demand. • Nigerian youth should use media tools to promote transparency, highlight government projects and ministries that are prone to corruption, and pressure the government to ensure accountability. • Youth can help transition Nigerian society away from an “ends justify the means” attitude by engaging in rallies, protests, and boycotts against corrupt private and public sector leaders.

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Checkmating the Malaise of Corruption in Nigeria

Center for International Private Enterprise

Introduction

constructed for him. Dubem, however, faces one major challenge in pursuing his entrepreneurial endeavour. Artisans working within the neighborhood where he carries out his trade will only purchase his soft drinks if they are chilled. Invariably, this affects the sale of his snacks since virtually everyone that buys drinks must also buy snacks to complement them. Frequent power outages frustrate Dubem’s business as without chilled soft drinks he records many unsold snacks. This results in financial loss and has forced him to reduce the number of snacks he buys at wholesale.

Recently, the Nigerian government sponsored a series of advertisements emphasizing its sincerity to combat corruption. I state without fear of being labelled a non-patriot that this war being waged against corruption is a mirage that depicts the highest level of hypocrisy. Despite the Nigerian government’s claims, corruption remains pervasive on both national and local levels.1

The Many Faces of Corruption

Ifeanyi is a mechanical engineer by profession. He is gifted in the art of manufacturing standby power generating sets and has fostered a dream of becoming a world renowned mechanical engineer. After his graduation from university, Ifeanyi approached the Nigerian Federal Ministry of Science and Technology seeking assistance to start manufacturing standby power generating sets. Ifeanyi could not believe his ears when he was told by an official at the government owned Ministry that he had to make a financial contribution to the Ministry before his application for assistance could be forwarded to the minister in charge. In this way, Ifeanyi’s dream of rendering useful economic help to his fatherland was killed.

Ajaokuta Steel Complex is located in Kogi State, Nigeria. The Complex promises to be a viable site that could spur an industrial revolution in the economic terrain of Nigeria. Already, USD $4.6 billion has been spent on the revitalization of the Complex, but the situation on the ground leaves no doubt that something has gone awry with the Nigerian system.2 The money intended for the rehabilitation of the Ajaokuta Steel Complex is apparently being funnelled to the financial base of corrupt contractors and their government cronies, who end up diverting the funds into their personal coffers. Andrew is a talented young man from Anambra State, Nigeria. He possesses ingenuity for manufacturing automobiles and aspires to have a car entirely made in Nigeria. Despite the fact that Nigeria has spent billions of dollars developing the Ajaokuta Steel Complex, Andrew’s dream continues to elude him as the country is still unable to manufacture its own steel. Unfortunately, the case of the Ajaokuta Steel Complex is not unique. Between 1999 and 2007, the Nigerian government spent USD $13.28 billion on the generation of a new power supply, but the money was not utilized for the intended objective. Rather, government officials in charge of the power sector used it for personal purposes. 3 As a result, the generation of electric power supply has not been able to meet the high demand for its consumption in Nigeria. Dubem is a resident of Enugu State, Nigeria. He sells snacks and soft drinks in a sales outlet his father

Onyeka is a businessman based in Aba, a commercial city in Abia State, Nigeria. He goes to Onitsha Main Market, the largest market in West Africa, on a weekly basis to purchase goods at wholesale, which he then sells at retail prices in his kiosk. Onyeka encounters one unavoidable challenge whenever he goes to Onitsha Main Market. Policemen at various check points on the highway leading from Onitsha to Aba always extort money from him. At each of the 60 check points where he stops, he gives the equivalent of USD $1 as a contribution to the policemen. Onyeka feels no joy in giving the money, but he has no other option as he stands the risk of being shot to death by the policemen if he fails to comply with their demands.4 In the end, Onyeka uses whatever money that remains to procure the goods he needs for his business. Because of the police officers’ actions, Onyeka is forced to sell his produce at higher prices that deter customers, thereby frustrating Onyeka’s aspirations of becoming a successful businessman.

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Checkmating the Malaise of Corruption in Nigeria

Center for International Private Enterprise

Less than one year after he acquired his shares in Jedede PLC, disaster struck. News spread that the global economic meltdown had dealt a heavy blow to the Nigerian Stock Market and that the officials of the financial body never told Nigerians the truth. Joseph rushed to sell his shares in Jedede Ltd to recover the money he invested, but it was too late. He found out that the 2,000,000 units of shares he bought in 2007 at the rate of 1 NGN per share crashed to 50 Kobo per share, losing half their value.6 Joseph felt betrayed and deceived. Most of his friends who became aware of what happened vowed never to invest their money in a Nigerian company and take such a risk. They feared that the same fate that befell Joseph might befall them.

Paschal is a brilliant graduate of Lagos State University where he studied banking and financial management. Upon graduation, he hoped to become a renowned banker and looked forward to working with any Nigerian bank of repute upon graduation. After graduating in the year 2004, Paschal read an advertisement in a newspaper for a job opportunity with Triumph Bank, then one of the most wellknown banks in Nigeria. Paschal applied for the job along with many others who, unlike Paschal, never studied banking in university and had little knowledge of the banking business. To the chagrin of Paschal, Emmanuel, one of his university mates who took Social Sciences as a course was offered the job in the bank and Paschal’s application was turned down. Paschal’s only offence was that he did not know anybody in the bank who could help get him the job.

Femi is a graduate from the University of Ibadan majoring in industrial chemistry and hails from Oyo State in Western Nigeria. He is gifted in manufacturing detergents and has been saving money so that he might start a business of his own one day. In order to manufacture detergents and turn a profit, he must go to a part of Nigeria where the natural resources needed for his job are readily available. He migrated to Ebonyi State in the Eastern part of Nigeria, known for its viability in the production of palm oil which is an essential component of his detergent.

While Emmanuel worked as a cashier with Triumph Bank, he was grossly inefficient. He hardly ever came to work on time and carried out his financial calculations in a manner well below what is expected of a professional banker. As a result, a good deal of the bank’s fortune was lost. At the end of 2005, the Central Bank of Nigeria declared Triumph Bank insolvent. Customers who deposited money in Triumph Bank accounts lost their livelihoods and many customers stopped doing business with other Nigerian banks for fear of losing their savings. The closure of Triumph Bank made them lose confidence in the Nigerian banking sector.

When Femi approached the Ebonyi State Ministry of Lands in order to inquire about a piece of property, Femi was informed that the land would be allotted to him at a higher rate than what was being offered to the indigenous citizens of Ebonyi State. Femi’s offence was that he hailed from another tribe. Ebonyi State was made up of the Igbo tribe and Femi was from the Yoruba tribe. The conditions given to Femi by the Ebonyi State Ministry of Lands were too stringent and he had to go back to his home State of Oyo where he eventually started his business. Femi is now forced to transport the palm oil produced in Ebonyi State to Oyo State and this costs him extra money and delays production. The high cost of transporting the palm oil makes the cost of production for his detergents rise. As a result, his products are not able to compete favourably with those imported from other parts of the world.

Joseph is a young entrepreneur based in Kaduna State in Nigeria. He was able to save 2,000,000 Nigeria Naira, or about $12,000 USD, from his labour of more than 10 years as a roadside metal welder. He learned about the Nigerian Stock Market from friends who advised him to acquire shares in a viable Nigerian company of his choice. Joseph approached officials of the Nigerian Stock Market who convinced him of the stock market’s profitability. Joseph invested his 2,000,000 NGN in Jedede PLC, a manufacturing company reputed for its financial potential. Joseph had no idea that nearly all the companies that were listed on the Nigerian Stock Exchange were on the verge of liquidation in 2009.5 The information the officials had given him in regards to the viability of Jedede PLC and the stock market was false.

Mgborie is a farmer from Amodu, a remote village in Enugu State of Nigeria. Like many other farmers –3–


Checkmating the Malaise of Corruption in Nigeria

Center for International Private Enterprise

living within her locality, Mgborie brings many farm products to urban markets in Enugu State at cheaper rates. However, Mgborie faced a grave challenge in selling her produce. There was no accessible bridge spanning the Nyaba River that could connect her rural community in Amodu with other parts of Enugu State. In the year 2006, the governor constructed a bridge across the Nyaba River in order to provide a link between Mgborie’s rural community and other regions. About a year after the construction of the Nyaba Bridge, tragedy struck when the bridge collapsed.7 News spread that the construction company that made the bridge was incompetent and that the budgetary allocation made for the construction may have been shared between the governor of Enugu State and the contractors. This made life terrible for Mgborie and other farmers in her area; she now has to resort to an alternative route to access external markets. This route is much longer and the drivers who transport her to the market charge her higher rates. Attempts by Mgborie to raise the price of her produce to cover the added expenses are usually met with financial loss on her own part as customers are not willing to buy her goods at higher prices.

Why the Problem Persists Most Nigerians seem to have gotten used to the menace of corruption in society. The moral undertone against acts of corruption which existed in the past has faded away. Society now welcomes those who made their wealth through corrupt means and gives them positions of honor. Those who were convicted by the courts for corrupt practices are celebrated as heroes, and an informal message seems to have been passed on to an uncountable army of upcoming Nigerians: the end justifies the means. A readily available example is the case of Bode George, a former public officer in Nigeria who was convicted of corrupt practices, but was welcomed back into society with lots of celebrations by many top government dignitaries—including a former President of Nigeria—after serving his jail term.8

The Way Out of the Nigerian Predicament Nigerian youths who earnestly believe in fighting corruption should engage in acts of civil disobedience, rallies, and protests against the corrupt practices perpetuated by government officials. In other parts of the world where corruption still reigns high these sorts of tactics have proven to be effective. For example, on August 16, 2011 Anna Hazare embarked on a 13 day fast and inspired thousands of Indian youths to stage protests against government corruption. Their actions yielded positive result as members of the parliament were compelled to create proposals for the enactment of laws that would ensure a proper fight against corruption, such as the Lokpal Bill.9 Nigerian youths should use the media to query the government on the reasons why money budgeted for national projects does not match the work done at the various projects sites. There should be serious sensitization of the populace by nationalistic youths on the harm that corruption has done to our nation. Social media, especially Facebook, serves as a unifying avenue for most Nigerian youths to discuss personal and public issues and should be utilized as a tool to expose corruption and to pressure the government to ensure accountability. Since most Nigerians make use of mobile phones for communication, bulk messages could also be sent to phone subscribers to educate them on the need to shun corruption. 10 In addition to a media campaign, utilizing electoral rights is crucial if Nigerian youth want to have any serious hope of redeeming their country from the stronghold of corruption. Nigerian youths should only vote for leaders who have a track record of being disciplined and incorruptible, devoid of any tribal, ethnic or religious biases. The shortlived regime of General Muhammadu Buhari that spanned from 31st December, 1983 to 27th August, 1985 is an example of a regime that was adamantly against corruption, both in words and in action. The government of General Muhammadu Buhari was able to fight corruption to a standstill. Having an honest leader at the top has a tremendous effect on every other segment of society.

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Checkmating the Malaise of Corruption in Nigeria

Center for International Private Enterprise

Similarly, prominent Nigerians who made their wealth through corrupt means should be reprimanded, not awarded. This might pose a difficult task, but Nigerian youth who want to be on the good side of history should make it clear in unequivocal terms to cultural leaders that they are tired of men with corrupt tendencies being accorded respect when they are not deserving. This will send a clear signal to anyone that might be disposed to honouring such men to desist from doing same.

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Chukwunonso Ogbe was born into the family of Mr. Francis Onam and Mrs. Caroline Chinyere Ogbe of Amechi Uwani in Enugu State, Nigeria, on August 16, 1985. He had his junior secondary education at the College of Immaculate Conception, Enugu between the year 1996 and 1998. He thereafter moved over to Federal Government College Enugu, for his senior secondary education in the year 1999 and graduated in the year 2001. He is an alumnus of University of Nigeria, wherein he secured admission in the year 2002 and was admitted to the degree of Bachelor of Laws in the year 2008. He subsequently underwent a one year mandatory legal study at the Nigerian Law School, Abuja, and emerged successful, as a result of which he was called to the Nigerian Bar as a Barrister and Solicitor of the Supreme Court of Nigeria on November 3, 2009. He recently received a degree in United Nations and International Understanding from the Institute of United Nations Studies in New Delhi, India.

If these suggestions are put in place, Nigeria might once again get back on track and become a nation whose progress is unfettered by the shackles of corruption. Notes Wole Soyinka, “Unholy Pursuit,” The New Black Magazine, December 11, 2008, http://www.thenewblackmagazine. com/view.aspx?index=1731 2 “Ajaokuta Steel Company, Symbol of Monumental Official Corruption,” The Nigerian Daily, August 28, 2011, http:// www.thenigeriandaily.com/2011/08/28/ajaokuta-steelcompany-symbol-of-monumental-official-corruption/ 3 “Power Project Probe: How Obasanjo, Imoke, others wasted N2.5tr,” Elombah, April 26, 2010, http://www.elombah. com/index.php?option=com_content&view=article&id= 3439:power-project-probe-how-obasanjo-imoke-otherswasted-n25tr&catid=48:corruption-reports 4 “Police Corruption in Nigeria,” Human Rights Watch, August 17, 2010, http://www.hrw.org/features/police-corruptionnigeria 5 Caroline Duffield, “Nigeria’s iron lady takes on fraudsters,” BBC News, July 1, 2010, http://www.bbc.co.uk/ news/10464725 6 The lower denomination of Nigerian currency denoted by capital letter K. 100 Kobo makes 1 Naira. 7 Francis Ugwoke, “Nigeria: N292m Nyaba Bridge Collapses,” AllAfrica, July 8, 2007, http://allafrica.com/ stories/200707091082.html 8 Olawale Olaleye, “Obasanjo, PDP Chieftains Receive Bode George,” This Day Live, February 27, 2011, http://www. thisdaylive.com/articles/obasanjo-pdp-chieftains-receivebode-george/86918/ 9 Jim Yardley, “Victorious Hunger Striker Shakes a Political Status Quo,” The New York Times, August 28, 2011, http:// www.nytimes.com/2011/08/29/world/asia/29india.html?_ r=1 10 Isaac Fadeyibi, “Nigeria’s GSM Prepaid Subscribers SIM Cards Registration: a Necessity,” Press Release Point, May 16, 2009, http://www.pressreleasepoint.com/ nigeria%E2%80%99s-gsm-prepaid-subscribers-sim-cardsregistration-necessity 1

Chukwunonso had his one year mandatory Nigeria National Youth Service Corps Programme at the Ogun State Ministry of Justice, Ijebu-Ode, Ogun State, Nigeria from 2009 to the year 2010 and served in the capacity of a State Counsel in the Criminal Prosecution Department of the Ministry. He thereafter joined the private law firm of Dennis Mba and Associates in Enugu, Nigeria as a private counsel from the year 2010 till the month of July, 2011. He subsequently moved over to the Republic of India in July, 2011 for further legal studies, where he is currently enrolled as a postgraduate student of Comparative Law at the University of Delhi, India. Chukwunonso Ogbe enjoys writing on issues that borders on his immediate environment and the human society at large. He has to his credit a published book entitled: The Dilemma of Nigerian Youths, that deals basically with the challenges being faced by Nigerian youths, and which was published in the year 2009. He also has to his credit two other yet to be published books. The views expressed by the author are his own and do not necessarily represent the views of the Center for International Private Enterprise (CIPE). CIPE grants permission to reprint, translate, and/or publish original articles from its Economic Reform Feature Service provided that (1) proper attribution is given to the –5–


Checkmating the Malaise of Corruption in Nigeria

Center for International Private Enterprise

original author and to CIPE and (2) CIPE is notified where the article is placed and a copy is provided to CIPE’s Washington office. The Economic Reform Feature Service is CIPE’s online and electronic article distribution service. It provides in-depth articles designed for a network of policymakers, business leaders, civic reformers, scholars, and others interested in the issues relating to economic reform and its connection to democratic development. Articles are e-mailed and posted online twice a month. If you would like to subscribe free of charge, please join the CIPE network by entering your e-mail at www.cipe.org. CIPE welcomes articles submitted by readers. Most articles run between 3-7 pages (1,000-

3,000 words). All submissions relevant to CIPE’s mission will be considered based on merit. The Center for International Private Enterprise (CIPE) strengthens democracy around the globe through private enterprise and market-oriented reform. CIPE is one of the four core institutes of the National Endowment for Democracy and an affiliate of the U.S. Chamber of Commerce. Since 1983, CIPE has worked with business leaders, policymakers, and journalists to build the civic institutions vital to a democratic society. CIPE’s key program areas include anti-corruption, advocacy, business associations, corporate governance, democratic governance, access to information, the informal sector and property rights, and women and youth.

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Checkmating the Malaise of Corruption in Nigeria

Center for International Private Enterprise

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Checkmating the Malaise of Corruption in Nigeria