Nigeria’s anti-corruption drive and the transparency index

Transparency International published its 2021 Corruption Perception Index (CPI) on 25 January and Nigeria’s score of 24/100 is its lowest in a decade. It would be difficult to capture the nuances of local corruption syndromes in a single index. For example, where sectoral or structural mitigants may reduce risks to a specific project. Taken on its own, the CPI score could obscure the reputational positives accompanying specific projects or individuals. That being said, the report underlines Nigeria’s still elevated corruption risk despite the campaign to fight graft on which President Muhammadu Buhari rode to power in 2015. The removal of the head of the Economic and Financial Crimes Commission (EFCC) during a turf war in 2020 is one of the most significant events relating to the campaign’s loss of momentum, and it reflects gaps in the political and legal framework that continue to expose businesses to risk.

Significance – Government and business

One of the loopholes in Nigeria’s legal system is that the EFCC Act allows the president to unilaterally remove the agency’s leadership and effectively control the agency. This can embolden corrupt public officials with high level relationships and it promotes money laundering through real estate. Last June, the EFCC chair Abdulrasheed Bawa described the case of an unnamed minister who arranged for a bank executive to help her move USD37.5 million in cash from her house to a real estate developer.[1]

The political capture resulting from that loophole has curtailed the EFCC’s capacity to meaningfully prevent corruption. For example, Ibrahim Magu was removed as EFCC chair in July 2020 after he fell out with the justice minister Abubakar Malami who is a central figure in Buhari’s inner circle. Magu was accused of corruption, put before a makeshift panel formed by the presidency and later released without a court procedure. Now, his successor Bawa is widely understood to have been placed in the position by the justice minister Malami who is also known to exert significant influence at the organisation.

Another longstanding flaw is that the constitution grants state governors immunity from prosecution while they have almost unfettered powers over public finance and procurement. This reduces the efficacy of any deterrents against corruption at subnational levels. For instance, the EFCC said in December that a governor in the central north had withdrawn NGN60 billion (USD144 million) in cash from the state government’s accounts within the last six years.[2] Abdullahi Ganduje, governor of northern Kano, was also filmed while personally receiving bribes from a contractor in 2018. The EFCC did not declare a probe into the governor, the journalist who published the tapes fled the country and the governor was re-elected a year later.

Where regulatory and political institutions are weak politicians are able to manipulate terms and processes by which government interacts with business, and in a way that can attract reputational risk. Transport minister Rotimi Amaechi barely caused a stir when he said last year that he required a contractor to build a transport university in President Buhari’s hometown before approving a railway construction contract. Another contractor would be required to build a second transport university in the minister’s own hometown.

Outlook – New administration, same system

A new president will take charge after Buhari’s final term ends in May 2023, but corruption will not be a prominent campaign issue ahead of the upcoming presidential election because insecurity and economic instability are most concerning at present.

Still, a change in EFCC leadership is likely imminent. Every incoming president has sacked the chair since the agency was formed in 2003. A crackdown on politically exposed persons linked to the outgoing government is also likely should there be a change in ruling party. To illustrate, many real estate properties were abandoned and eventually seized in Abuja after the People’s Democratic Party lost power to Buhari’s All Progressives Congress in 2015. On that note, legislative reforms to strengthen the EFCC and stem corruption are made difficult even in the medium term given the benefits of the current system for an incumbent.

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[1] 90% of money laundering is through real estate – EFCC (June 2021). Vanguard.

[2] Serving governor withdrew N60 billion cash in six years – EFCC (December 2021). Tribune.

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