Nigeria, Corruption And The Law: The Development Conundrum

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NIGERIA @ 55

Sofiri Joab-Peterside

 

The objective of this piece is to probe the sad role of the corruption in ongoing economic crisis, and what can be done to rescue the Nigerian state from the capture of the governing elite. Focus on the Nigerian economy derives from considerable interest has been shown by people from all walks of life in the socio-economic development of the country, both in the advanced and developing countries. As a matter of fact, politicians and statesmen, administrators, civil servants, international organizations, foundations, social and research scientists have shown such increasing concerns that are now cumulating in a supposed commitment to solving the problems of lack of development.

I use the occasion of the country’s celebration of fifty-five years of political independence to share with you my reflections on the problem as I have formulated it in preceding paragraphs. My point of departure is twofold. First, we need to revisit the concept of the state with emphasis on the state in Nigeria and the extent to which it exists for the public good. Secondly the role of the state as an instrument of appropriation and accumulation and how these interpose with other sociological variables to impoverish the citizens whose interest the governing elite ought to defend and pursue as a sacred duty. Little is realized that the crisis of lack of development is intricately and /or inextricably intertwined with the nature of the state and the role of the governing and business elites who have captured it and patterned themselves into specific ways of life against the interest of majority of the citizens.

It is my contention that the profligacy and corruption in government combine to eventually rob the country of the necessary development it should have witnessed in the last sixteen years. Put differently, the nature of the state as a mechanism of private accumulation punctuated by perennial instability and apostle of neo-liberalism lurks the germs of success or the viruses of failure of the Nigerian economy. Against the points of my departure, let me outline my reflections on the subject matter.

Nigeria is a classic case of paradox of riches. As a country, it is wealthy in natural and human resources as some of her citizens are counted among the richest persons in the world; sadly its economy is underdeveloped and majority of the population wallow in abject poverty and misery The average Nigerian lives on less than one dollar a day, most of our roads are in deplorable conditions, just as the public hospitals themselves are “dead” and the higher education sector practically broken by Academic Staff Union of Universities (ASSU) strikes over the Federal government’s unfulfilled agreement, while the culture of impunity has become an integral part of the norm of political appointees. The adoption of neo-liberalism as a development paradigm by the political leadership brought to the fore a constellation of ideas and forces promoting economic growth- based development strategies. Spearheaded by a variety of institutional sources – including the World Bank, international organizations, Non-Governmental Organizations (NGOs), and governments, this inarticulate approach to development dominate contemporary development policy and is being increasingly employed in the current government’s “rescue mission”.

The impacts and implications of the government reform programme raise a number of important questions regarding governance and development. On the one hand, an unlikely convergence between neo-liberalism and people oriented development in terms of service delivery and empowerment of the most marginalized social groups. On the other hand, a body of scholarship highlights key transformative potentials of neo-liberalism with inflation rate moving in the right direction. Critics raise particularly serious concerns regarding the critical disconnect between growth and development as epitomized by rising misery index, poverty, unemployment, and lending rate and exploitative labour processes. Primary production and export of crude oil continue to define the economy, while level of moral depravity and political degeneracy among public officers is worsening on a daily basis.

What is the explanation for this apparent inability of government’s development strategies to contain the nagging problems of underdevelopment since 1999? What can be done to reverse the prevailing condition? I argue that the nature of the state located at the conjuncture of intra-elite dynamics and wider political and economic forces offer a more sophisticated understanding of the possibilities of transformation, corruption of power, executive impunity; and the failure of law in regulating the accumulative propensities of the governing elite.  It is difficult to explain the persistent diversion of state resources by politicians and private sector officials for personal purposes outside the general framework of perceiving state and corporate powers as the means for appropriation and accumulation.  For majority of the governing elite, power is conceived as a prebend.

A prebendal system is one in which the legal/ rational and other societal norms of authority merge, producing a hybrid that cannot be conveniently subsumed under any specific heading. The point being made is that there are specific legal rules guiding the purview of offices, however, personal loyalties and communal identities, the private appropriation of the means of administration, and the transformation of offices and their administrative purposes into a direct or indirect economic resources, have equal weight in determining the nature and exercise of public power. The existence of a prebendalized state, and the easy adaptation of traditional patron- client relationships to the pursuit of modern material goods, means that prebendalism and clientilism-are mutually reinforcing. Prebendalism is encouraged by the existence of patronage system in which an individual/individuals of higher-socio economic status(patron) uses his or their influence and resources to provide protection or benefits or both, for a person of lower status(client) who for his/their part, reciprocate(s) by offering general support and assistance, including personal services.

The return of democratic rule in 1999 revitalizes and promotes clientelistics networks because of its vast array of political appointments( legislative, and executive) and private staff positions to be filled is a veritable boom to prebendal politics. Opportunities for access to the state are multiplied as political appointees and their

clients enjoy new leverages to procure preferential treatments. Although social commentators and scholars have sought to distinguish clientelism from prebendalism, the two constitute complementary aspects of a general phenomenon. Clientelism defines the nature of individual and group relationships within the wider socio-political sphere, while prebendalism is primarily a function of the competition for, and appropriation of, offices of the state. Prebendalism therefore is the treatment of state power as a congeries of offices which can be competed for, appropriated and then deployed for the benefit of positional incumbents and their support groups.  How the nature of the Nigerian state and associated social forces led to this process will become clearer.

One of the key issues associated with underdevelopment of Nigeria by 2002 was corruption as an overwhelming majority of Nigerian companies were continuing to pay bribes to secure the services they needed. Virtually, all indices of governance are in the negative. Peace has become elusive, unemployment is increasing, hunger and poverty has become pervasive, while insecurity has enveloped the economic and political terrain due to greed, inordinate ambition of leaders and winner-takes all approach to governance. Corruption was institutionalized as the foundation of governance to the extent that institutions of society easily decayed to unprecedented proportions as opportunities were privatized by the powerful.

Power became nothing but a means of accumulation and subversion as productive initiatives were abandoned for purely administrative and transactional activities. The process of conducting government business degenerated to such an extent that Public service Rules, Financial Regulations and Ethic and Norms of the Service were jettisoned either due to sheer ignorance or to further primitive capitalist accumulation. Consequently all elements that enhance efficiency, reliability and continuity of the system were tempered with resulting in major and severe setbacks for the conduct of government business.

The country’s situation was so bad that in 2008 a Global Competitiveness Report released by the World Economic Forum ranked Nigeria’s economy as the 99th in the World among 133 countries assessed by the forum. The Forum also ranked Nigeria in terms of security, corruption, wasteful expenditures by government, infrastructure availability, health and primary education where it was placed the 117th, 122nd, 127th, and 132nd position among 133 nations. A 2009 World Bank and the International Finance Corporation report ranked Nigeria 125th among 183 economies in the world in terms of the general regulatory ease of doing business. These rakings is an affirmation that Nigeria is a country wracked by poverty, insecurity, corruption and general despondency.

Government reasoned that part of the problem emanates from lack of discipline. It is against this backdrop that privatization was conceived as the key to reinvigorating public enterprises that had fallen due to poor management. Government’s intention is for these enterprises to benefit from private-sector discipline. Privatization is a neo-liberal policy fashion of the 1980s and 1990s. Under this policy, monopoly utilities were deregulated and subjected to competition. Purported aim of the process is to ensure that government enterprises operate on commercial basis or subject to fair competition .The attraction of privatization to government is profit making, as asset sales led to huge injection of cash into its treasury. In many instances, Nigerians were skeptical about the acclaimed benefits of privatization.

An important component of the privatization programme was the unbundling of the Power Holding Company of Nigeria (PHCN) in 2005 into 18 separate units for the generation and transmission of electricity across the country due to the organization’s consistent failure to provide enough power to meet demand, despite consuming more than US$6 billion in state subsidies between 1999 to 2007. The problem is that the issue of provision of power was politicized as politicians took over the responsibilities of technocrats in the sector . Generally, a political contractor who have no expertise whatsoever nor even the intention to perform, simply sells the contract to a third party and pocket the commission running into billions of naira for acting as a conduit of executive fiat.

Leadership in Nigeria in both the public and private sectors at a time lost public trust because personal and corporate integrity in leadership is low. In the private sector, there were glaring cases of betrayal of public trust by Chief Executives of business organizations who falsify records and produce accounting reports that do not reflect the true health of their organizations, making the gullible public invest in their organizations, only for those shares to become worthless in the shortest possible time.  The banking industry was a classic example as the sector’s regulatory supervision was too weak. In fact, the collapse of some of the new entrants led to severe loss of confidence in the system.

Despite government’s effort to enthrone transparency and accountability in the oil and gas sector, corruption in this vital sector of the nation’s economy subsists. This disturbing information about the corruptibility of the oil sector was brought to the fore by the Nigerian Liquefied Natural Gas Industry (NLNG)/Halliburton bribe scandal. The security situation and level of corruption is alarming. The nation’s current security landscape contains potential threats such as sectarian violence, civil crises, communal clashes, cultism, killings and robberies, vandalism, proliferation of light weapons and small arms, and terrorism. Kidnappings, hitherto restricted to the Niger Delta, have spread to other parts of the country, just as more cases of assassination have joined the long list of unresolved cases in the country.

Government in 2000 established the Niger Delta Development Commission (NDDC) to address the economic problems of the oil rich Niger Delta region. The sad paradox is that the Commission rather than extricate the inhabitants of the region from the stranglehold of poverty turned into a patronage agency to benefit the rapacious governing elite through reckless award of projects and flagrant breach of the Public Procurement Act 2007. While unrest in the Delta has sharply declined since the 2009 amnesty deal, there is now the incredible growth of oil theft and illegal refining of petroleum products in the region in spite of the clamp down on the illicit trade by Nigeria’s security forces. It is estimated that some 150,000 barrels of oil are stolen from facilities every day. This is huge amount and the effects of this industrial scale theft are devastating for both the people and the environment. Oil theft industry is almost becoming the biggest economy in the region contributing to employment and income generation in communities. The rouge industry is a monopoly business with established command and control structure comprising the ex-militants and segments of state security force established for protection and security of oil and gas infrastructure in the Niger Delta.

Corruption has grown enormously in variety, magnitude and brazenness because it has been extravagantly fuelled by budgetary abuse and political patronage. Consequently, public and private sectors funds were channeled to political allies, business surrogates, personal or family friends either in the guise of contracts to execute public works of one kind or another. Proceedings of the House of Representatives ad-hoc committee on fuel subsidy revealed a high degree of manipulation and sharp practices officially engineered by top government functionaries and corporate executives. It is estimated that over fifty percent of nearly N3 trillion paid out as subsidy to fuel importers and marketers in 2011 was fraudulent.

Corruption is a national malaise that has crippled national progress repeatedly confirmed by Nigeria’s ranking in international corruption perception survey. There is also agreement among scholars and social commentators that addressing the cankerworm of corruption is key to realizing government development goals and collective welfare of citizens. Little wonder all post independence regimes denounced corruption and over the years enacted plethora of laws as well as put in place institutions to deal with this problem. It is important to emphasize that political corruption more than any other type has a crippling effect on the democratization process and the democratic state because it erodes the sanctity of the votes and the quality of elections, and consequently governance.

In consonance with its economic reform framework, Government’s strategy for fighting corruption is drawn from market approaches rooted in neo-liberal economic theories which perceive corruption as a product of excessive state intervention and rent seeking behavior. The neo-institutionists on the other hand, sees corruption as driving from the weakness or failure of governance and state institutions which yield to the argument that institutions need to be strengthened. There was therefore an urgent call for Reforms and enthronement of Due Process in the Nigerian public sector. Consequently, the Public Procurement Act 2007 otherwise known as Due Process was enacted. Due Process implies that government activities can be carried out openly, economically and transparently without favouritism and corruptible tendencies. The essence of Due Process is to ensure that rules and procedures for procurement are made in such a way as to be implementable and enforceable. Some state governments domesticated the Public Procurement Act.

The establishment of the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and the Economic and Financial Crime Commission (EFCC) demonstrates government’s commitment in curtailing endemic corruption which taints Nigeria’s business environment. The Independent Corrupt Practices and Other Related Offences Commission (ICPC) Act was enacted in 2000 after so much public debate and disagreement between the Executive and the National Assembly. The Commission’s mandate empowers it to effectively adopt a 3-pronged approach in fighting corruption namely, to educate against, prevent, investigate and prosecute cases of corruption in the Public sector and to a limited extent in the Private Sector.

ICPC enjoys some latitude in prosecuting cases of corruption as it could, in the absence of directive of the Attorney-General of the Federation proceed based on the provision that every prosecution for an offence under the Act or any other law prohibiting bribery and corruption will be deemed to be performed with the consent of the Attorney-General. ICPC secured only 2 convictions of minor individuals out of 27 in the first 3 years highlighting poor investigation skills. By April 2005 the Commission had in its employment 32 investigators and 17 prosecutors out of 271 workers; and another 45 out of 152 employees in October of the same year.

The Economic and Financial Crimes Commission was established in 2003 in response to the obvious gaps in the Act establishing the ICPC; notably exclusion from investigating offences committed before the passage of the Act and omission of financial crimes. The Commission was specifically charged with the responsibility of conducting investigations into crimes of a financial and economic nature; money laundering, counterfeiting, 419, capital and market fraud, cyber crimes, credit card frauds, contract fraud, terrorism and terrorism financing. The powers of EFCC also includes identifying, monitoring, freezing and confiscating proceeds from financial crimes in addition to coordination role with all institutions charged with fighting corruption including the police, Ministry of Justice, Customs, Immigration, Prisons, Central Bank of Nigeria and the National Drug Law Enforcement Agency(NDLEA). The EFCC Act was amended in 2004 to provide for the establishment of a Nigerian Financial Intelligence Unit within the EFCC.

National Assembly when it made moves to investigate then Senate President and Speaker whose vendetta in amending the Commission’s Act was reversed by the Court.

The Economic and Financial Crimes Commission(EFCC) despite criticism of high handedness and human rights violations, proved to be more effective compared to the ICPC because it was better funded, politically protected and with more skilled manpower. For example, by June 2006, it had received 5, 400 petitions, investigated 2, 103 and prosecuted 550. The Commission was estimated to have recovered over US$40 billion at the time Ribadu left as its chairman. In some instances funds were paid back to the public treasury from state officials and convicted persons in the private sector.

With regard to management of revenues from the oil and gas sector of the economy, Nigeria signed on to the Extractive Industries Transparency Initiative (EITI) and established the Nigerian subset known as Nigeria Extractive Industries transparency Initiative (NEITI) with the mandate of ensuring transparency and accountability and eliminating corrupt practices in payment and receipts within the extractive sector.  The Technical Unit on Governance and Anti-Corruption Reforms (TUGAR) was established as part of government’s anti-corruption intervention in Nigeria. TUGAR was established to address the need to generate coordinated country-specific data as a basis for isolating and addressing issues of corruption and governance, while also facilitating coordination, synergy and strategic linkages among anti-corruption and oversight agencies (TUGAR).

Similarly, the Public Complaint Commission (PCC) conceptualized and established as the ombudsman with the mandate to investigate and redress complaints of citizens relating to administrative injustice and anomalies against government or private entities, while office of the Auditor-General of the Federation and States are established by the Constitution to audit public accounts and present periodic reports to the National Assembly. Despite these embedding ant-corruption measures pursued in context of a comprehensive Economic Reform programme, bribery of public officials, intentional abuse of office for the purpose of obtaining an undue advantage, illicit enrichment by officials of the state and private sectors, embezzlement, misappropriation, and other diversions subsist.  These underscore the fact that generally, broad-based progress in the fight against corruption became slow.

Although there have been more determined efforts by the governing elite to provide so-called people oriented or inclusive development models and strategies to advance the development of the country, such attempts have failed to satisfy three main requirements  namely, theoretical adequacy, empirical validity and policy effectiveness. The consistent irreconcilability between previous and contemporary development approaches heavily drawn from variants of growth models and superficial structural frameworks, and the incontrovertible reality of state managed underdevelopment in present-day Nigeria, apart from accentuating the Nigerian crisis, has added impetus to the continued quest for an alternative national development orientation which must take into account the current development impasse in the country. Few examples why an alternative and authentic development strategy is unavoidably called for will suffice.

The National Bureau of Statistics (NBS) revealed that N51.50 trillion accrued to the state as proceeds from oil in the last thirty one years, a stark contrast to the poverty that pervades Nigeria. The Bureau further captured the grimy situation of the country in its survey in which it noted that about one hundred million Nigerians live below $2 per day. The report also showed that poverty was worse in the North West and North East geo-political zones while the South West and South East zones recorded the lowest poverty rates in the country. The impressive performance of the two zones notwithstanding, the report indicated that the number of Nigerians living in poverty has been on the increase since 1980, yet the economy has been recording impressive Gross Domestic Product (GDP)..

Poverty in Nigeria is not necessarily a consequence of the global economic crisis that was triggered off in 2008, but to a large extent rooted in corruption, greed and poor governance at all sectors and levels (public and private), in what the leaders have done or failed to do especially, in the application, deployment and management of the vast human and material resources available to the nation. The N255 million bulletproof cars scandal accentuated the high-level impunity, corruption and propensity of politicians and other public officers to squander the nation’s riches. This transaction viewed largely by Nigerians as an abuse of office by the Minister threw the aviation community in particular and the country into confusion. Revelations at the House Representatives hearing in Abuja had it that the approved 2013 budget was inflated.

One of the audits of the country’s oil and gas sector by the Nigeria Extractive Industries Transparency Initiative (NEITI) showed that after over five decades of commercial oil production, the country lacks capacity to measure the quantum of crude oil it produces. Department of Petroleum Resources (DPR) has no system for measuring production other than through monitoring terminal receipts. Consequently, the amount of oil produced at the well-head is not known. Poor management of the oil industry nurtured all manner of mafia groups who shortchange the nation. Although government made effort to reform the oil industry, it does appear that all the leakages were not been blocked. Accusations of fraudulent allocations of oil blocks and misappropriation of huge sums of money continue to trail some of those at the highest levels of government and the national oil company-NNPC.

Although the country’s airports are being refurbished, the poor state of the aviation industry has been linked to poor leadership, unbridled corruption as well as poor financing and management of the sector. Consequently in the past two decades, nearly 1, 000 people have been killed in plane crashes in Nigeria. Most of the deaths were between 2006 when after a series of deadly crashes Nigeria passed new legislation and improved its air record, yet crashes continue. On June 3, 2012, Dana Airlines Flight 9J 992 carrying 153 passengers onboard crashed at a residential area of Iju-Ishaga, Lagos killing all the people onboard. Similarly on October 3, 2013, Associated Airlines plane crashed at Lagos airport, killing 15 out of 20 persons onboard. Granted that plan crash can occur in any part of the world, but the amount of plane crash incidents in Nigeria compared to other parts of the world calls for concern.

The foregoing underscore the fact that poor economic management; rising poverty level; decline of effectiveness of institutions; and infrastructural decay are the outcome of  the nature of the state and its development engineering policies.

As a consequence of years of failed dreams, shattered expectations and betrayed hope, majority of Nigerians have lost hope in their political leaders. The bewildered electorate believes that elected representatives and other political office holders are acting for themselves and in their own selfish interests. In fact, for many citizens, the politicians are not statesmen. What is required is a proper diagnosis of the problems and challenges confronting the Nigerian economy with a view to arriving at an appropriate development framework. The concept of inclusive growth bandied about by managers of the economy failed fundamentally to reduce the rate of unemployment in the long run.

It is pertinent to note that Government had no doubt created both strong and weak institutions to tackle corruption and promote good governance. To a great extent, there are institutional disconnect between the citizens and government. There is thus the need to prevent these institutions from being turned into oversized patrimonial and predatory organs. For example, in politics, a strong electoral institution, free and fair participatory democracy should ensure that politicians who have acted only in their self-interest are voted out at elections. The judicial and law enforcement institutions should also ensure that those who commit crime or steal public funds are caught, prosecuted and punished as deterrent against corruption. In the private sector, the regulatory institutions should conscientiously ensure that the corporations are governed well for the greater good of the shareholders who owned the companies and the larger society.

For the anti-corruption agencies to discharge their duties honestly and faithfully as intended by the laws establishing them there is an urgent need to address the seven sins that undermined their effectiveness. These sins are Economic “sins” or lack of resources; Political “sins” or absence of political will; Legal “sins” or lack of inefficient legal system or framework or structural dependence; Organizational “sins” or Leadership weakness such as poor administrative style; Governance “sins” or lack of effective complimentary institutions such as the police and the judiciary; Performance “sins” or level of efficiency; and Public confidence “sins” or lack of public trust and confidence.

Nigeria must invest in the knowledge production industry. Thus it is essential for funds to be provided to encourage the development of knowledge and marketing of ideas. In truth, the private sector cannot optimally support this process, hence the urgent need for government to provided the much need fund. This also calls for a fundamental link between universities, research institutes/centres and the market as a means of bridging the divide between the town and gown, between the intellectual world and the world of commerce and industry.

The country’s political leadership must take interest in diversification of the economy away from heavy reliance on oil and gas as chief sources of public revenue. Although I advocate strong state intervention in the economy it is pertinent to state the need for government enterprises to operate according to the principles inherent in commercial and efficient business enterprises best practice as a safeguard against corrupt practices.

Nigeria is not beyond change, but can only change if the citizenry discover leaders with the will, capacity and vision to turn the country around. Such visionary leaders are rare to come by, but it is the duty of the citizens to create the enabling environment for their emergence. The process of transformation either in an organization, or a nation, requires transformational leadership- that unique set of change agents united in vision, purposefulness of mission and, sustained by such shared values as motivation and morality that progressively elevate one another and the followership to higher levels.

 

Dr. Sofiri Joab-Peterside earned PhD in Sociology from the University of Port Harcourt with specialization in Sociology of Development and currently a Senior lecturer with the Department of Sociology, University of Port Harcourt, Associate Research Fellow, Centre for Advanced Social Science (CASS), Port Harcourt and Assistant Director Claude Ake School of Government, University of Port Harcourt. He became first Luce foundation Fellow (Fall 2005) on Green Governance and Green Peace at University of California, Berkeley, United State of America.  Dr. Sofiri Joab-Peterside has solid grounding in development theory and methodology of the social sciences, which he has brought to bear, with remarkable insights, on relationship between democracy, ethnicity, federalism and intergovernmental relations in Nigeria. He has extended the scope of his earlier focus on the dynamics and contradictions of development politics and processes in the Niger Delta to a more comparative canvas, covering resource rich countries like Brazil and Indonesia, as a member of cross national, multidisciplinary team of scholars, working on a project “Green Governance and Green Peace”.