Weak Legal Actions Agains Corruption in Nigeria

Nigeria Corruption Report

Last updated: July 2020

Snapshot

Corruption is a significant obstruction to business in Nigeria: companies are very likely to come across bribery and other corrupt practices. Corruption risks are pervasive throughout all institutions but the oil sector is particularly corrupt. Corruption is criminalised primarily by the Criminal Lawmaking and the Corrupt Practices and Other Related Offences Act. Accepting or giving gifts besides as facilitation payments are illegal, and individuals can be penalised with up to 7 years' imprisonment. Despite a strong legal framework, enforcement of anti-corruption legislation in Nigeria remains weak: in practise, gifts, blackmail and facilitation payments are the norm.

• Adventure key
• Depression
• MODERATELY LOW
• MODERATE
• MODERATELY High
• Loftier

Judicial System

Companies face a high run a risk of corruption when interacting with Nigeria's judiciary; it is characterized by a loftier degree of corruption and political interference (FitW 2016). Companies report bribes to obtain favorable judgments are common (GCR 2015-2016). Nigeria's constitution establishes an contained judiciary, but other branches of government oftentimes interfere with it (BTI 2016). Almost one-half of Nigerians perceive the judicial system to exist corrupt (GCB 2015). The judiciary is plagued by understaffing, underfunding, inefficiency, and corruption (HRR 2016). Judges are susceptible to bribery and courts cannot be relied on for independent judgments (HRR 2016). Judges and court officials are poorly remunerated and court documents are not digitized, which encourages corruption (ICS 2016).

Businesses practise not report sufficient trust in the efficiency of the legal framework to settle disputes or allow them to claiming regulations (GCB 2016-2017). Occasionally, businesses in Nigeria seek court injunctions from judges seen equally favorable to their cause, to protect themselves against businesses or legal proceedings unfavorable to them (ICS 2016). Enforcing a contract can be costly, just the fourth dimension it takes to enforce a contract is considerably shorter than the Sub-Saharan Africa regional boilerplate (DB 2017). On a more than positive note, a very pocket-size percentage of companies see the courts as a constraint to business organisation (ES 2014). Nigeria is a member of the International Centre for Settlement of Investment Disputes (ICSID) and is a signatory to the New York Convention 1958 on the Recognition and Enforcement of Strange Arbitral Awards.

In October 2016, law enforcement in Nigeria seized USD 800,000 in a raid targeting several senior judges (BBC News, October. 2016). Among those arrested was Supreme Courtroom Justice Sylvester Ngwuta, who has been charged with 15 counts of fraud amounting to nearly USD 1,five million (BBC News, Nov. 2016). Additional charges have recently been added to the example (Premium Times, May 2017).

Police force

Businesses face up a high risk of corruption in their interaction with the police. Nearly all Nigerians believe the police is corrupt, making it the most corrupt institution in Nigeria (GCB 2015). The police in Nigeria is a strong impediment to business organization, which are considered very unreliable in enforcing the law (GCR 2016-2017). Over one-half of businesses pay for their own security in Nigeria (ES 2014). Police officers continue to operate with impunity (HRR 2016).

In one illustrative case, a ransom of NGN 2.seven one thousand thousand was recovered from Assistant Commissioner of Police; he is currently facing unspecified disciplinary activeness (Nigerian Monitor, Oct. xiv, 2016). In another case, it is alleged that a Nigerian police unit tasked with combating violent criminal offence has been systematically torturing detainees in club to excerpt confessions and bribes. The unit has also been accused of stealing property from relatives of detainees (Immunity International, Sept. 2016).

Public Services

Nigeria's public service suffers from widespread abuse. Government regulations are burdensome for businesses, and bribes and irregular payments are ofttimes exchanged (GCR 2016-2017). A third of companies expect to give gifts when trying to obtain electrical and water connections (ES 2014). Around ane in four companies expects requite gifts in society to obtain an operating license (ES 2014). A system of patronage exists in public institutions (The Economist, February. 2016). Diversion of public funds is so mutual, that an inspect in December 2016 plant and removed l,000 'ghost workers' from the government'south payroll, leading to savings quoted equally USD 636 million (Africa News, Dec. 2016). In connection to this instance, eleven main suspects take been referred to the Economic and Financial Crimes Committee (Africa News, December. 2016). No farther update on the example was available at the time of review.

Starting a business takes less time than the regional average; dealing with the Commission for Corporate Diplomacy (CAC) is the most time-consuming role of the process (DB 2017). Getting electricity takes significantly longer than the regional average (DB 2017).

Land Assistants

There is a high risk of corruption in Nigeria's land administration. Land is granted to businesses as a hereditary charter from the Nigerian government and can exist contingent on corruption and favoritism (BTI 2016). A pregnant number of businesses report being expected to give gifts or facilitation payments to obtain a structure permit (ES 2014). The state governors, in charge of land administration, often abuse their office by giving land to their clientele (BTI 2016). Corruption and favoritism among land officials are reported reasons behind sure cases of property demolition (HRR 2016). Investors should also be enlightened that due to the hereditary organization, proper documentation for land rights is sometimes found to exist lacking, leading to local chiefs selling country that later on is revealed to have an unsecured title (BTI 2016). One illustrative example is sometime land governor Ladoja, who has been charged with fraud amounting to over USD fourteen meg, including fraud in belongings sale (The Nation, Mar. 2017). Property transfers in Nigeria are circuitous and maintaining property rights has get problematic (ICS 2016). The Federal Capital Development Authority (FCTA) in Abuja allegedly evicts residents and businesses that practice not comply with the Abuja city plan, even if permits are in identify and caused through the FCTA (ICS 2016). State may be expropriated with compensation when natural resource are discovered on the land (BTI 2016).

Property rights in Nigeria are regulated simply not sufficiently protected (GCR 2016-2017). Registering property is a lengthy process that involves significantly more steps than the regional average (DB 2017).

Tax Administration

Companies interacting with the Nigerian tax administration face up high risks of corruption. Ane in four companies expect to be asked for a ransom, gift or facilitation payment when interacting with tax officials (ES 2014). Over half of Nigerians consider the tax government to be corrupt (GCB 2015). Tax collection processes are non-transparent and tax evasion among businesses is widespread due to collusion betwixt businesses, individuals, and tax officials (ICS 2016). Companies may face multiple taxes inside concurrent state and local jurisdictions (ICS 2016). Taxation revenues currently only corporeality to 8% of Gdp (pwc 2017). In a recent push, the Nigerian government identified 700,000 firms that accept never paid taxes; it announced plans to enhance dorsum taxes from these firms (News24, Sept. 2016).

Companies spend nearly three times the amount of hours on filing taxes every bit the regional boilerplate and the frequency of payments is also much higher (DB 2017).

Customs Administration

At that place is a significant take a chance of corruption in Nigeria'due south customs sector. Bribery is common among Nigeria's customs and port regime, and smuggled goods regularly enter seaports and cross borders (ICS 2016). Customs processes are handled exclusively past the Nigerian Community Service (NCS) and the Nigerian Ports Authority (NPA). A meaning number of firms expect to requite gifts or payments to obtain an import license (ES 2014). Onerous import procedures and corruption at the border are the most problematic factors for imports, and the efficiency of the clearing procedure is considered poor (GETR 2016).  Reports of nepotism and corruption within the organization remain common, despite a public bulldoze confronting corruption in the NCS (Premium Times, Mar. 2017). In October 2016, 29 senior officials with the NCS were fired for abuse-related offenses (Pulse, October. 2016).

Public Procurement

Corruption is mutual in Nigeria's public procurement sector, with upwardly to ane-third of companies expecting to requite gifts or payments to secure a government contract (ES 2014). Companies written report that irregular payments are very common in public procurement procedures (GCR 2015-2016). The diversion of public funds to well-continued firms and individuals equally well every bit favoritism in decisions of government officials is widespread (GCR 2016-2017). Foreign companies are generally treated on equal terms with domestic companies, but they may in some localities be required by police to partner with a local firm (ICS 2016). Occasionally, foreign financing announced to exist essential in the award of regime procurement (ICS 2016). Difficulties in obtaining payments for projects has rendered companies reluctant to bid on public contracts (ICS 2016). In that location has been some comeback in the process of application contracts in the natural resources sector, simply irregularities including the award of contracts to firms with histories of fraud and bribery and the award of contracts outside the regular bidding process persist (NRGI, Oct. 2016). Nigeria has undertaken various efforts to reform public procurement policies, the most notable of which is the Public Procurement Act, which regulates public procurement and aims to minimize the abuse of rules, processes and standards in the award and execution of public-sector contracts. Companies tin detect information on legislation, complaints procedures and contracts at the Bureau of Public Procurement. Businesses are recommended to implement special due diligence procedures to assess the risk of encountering corruption in Nigeria's procurement process.

There is a high take chances of abuse in defence sector procurement (GDACI 2015). A console establish that over USD xv billion was stolen from the state coffers under the guise of fraudulent arms procurement deals during the administration of President Goodluck Jonathan (Reuters, May 2016). The console launched investigations into 15 retired and serving armed forces officers, equally well as 22 companies and aides of suspects (Sahara Reporters, April. 2017). A member of the panel, Rear Admiral in the Nigerian Navy Daniel Ikoli, died nether suspicious circumstances in Apr 2017, prompting the other members of the console to seek special protection (Sahara Reporters, Apr. 2017).

Bala Ngilari, the former governor of the country of Adamawa, was sentenced to 5 years in jail for failing to adhere to proper procedures for application a contract to supply 25 vehicles co-ordinate to the public procurement laws of the state (Daily Post, Mar. 2017). Afterwards serving only a few weeks in prison, he was released due to wellness concerns, allegedly based on a fraudulent letter of the alphabet (Premium Times, Mar. 2017).

Natural Resources

Nigeria's natural resources sector has a high risk of corruption. Reporting practices and safeguards and quality controls are particularly weak (NRGI 2017). The sale of oil in Nigeria carries loftier corruption risks, stemming from a reliance on oil traders, unqualified 'middleman' companies, and a general lack of transparency (NRGI 2015).

Nigeria'south Extractive Industries Transparency Initiative (NEITI) chosen upon the regime to recover over USD 21 billion from the Nigerian National Petroleum Corporation in Nigeria and to investigate non-transparent contracts and transactions of the Nigeria National Petroleum Corporation (NNPC) (Premium Times, April. 2017). Moreover, NEITI also chosen for a probe into USD xv.viii billion related to the status of dividend and loan repayments by Nigeria Liquefied Natural Gas (NLNG) from 2000 to 2014 (Premium Times, April. 2017). A deal between the Nigerian government and Imperial Dutch Trounce, worth USD 1.3 billion, for an offshore oil exploration license called OPL 245 has come up under intense scrutiny. It is alleged that high-ranking executives at Regal Dutch Shell were aware that part of the coin would be used to enrich former oil-government minister Etete besides as former President Goodluck Jonathan (Financial Times, Apr. 2017). Royal Dutch Shell is currently being investigated over these allegations by prosecutors in Nigeria, Italy, and the Netherlands (Financial Times, Apr 2017). Despite the turmoil, the Nigerian government has indicated that it intends to move forward with the deepwater exploration project (AllAfrica, May 2017).

The Nigerian Extractive Industry Transparency Initiative Act establishes the Nigerian Extractive Manufacture Transparency Initiative, which ensures, monitors and reviews transparency and accountability in the reporting and financial disclosure of extractive companies. Offences against the Act can be penalized by two or more years' imprisonment and/or a fine of up to USD 151,000.

Legislation

Nigeria has a well developed anti-abuse legal framework, but enforcement is very weak. It has been estimated that abuse could cost Nigeria up to 37% of its Gross domestic product past 2030 if abuse is non dealt with (pwc 2017). The Criminal Code criminalizes corruption and the abuse of part, and the Corrupt Practices and Other Related Offences Act criminalizes agile and passive blackmail, as well as attempted abuse, fraud, extortion and coin laundering. Penalties apply both to individuals and companies and include fines and/or up to seven years' imprisonment. Accepting or giving gifts or facilitation payments is illegal. Nigeria's Constitution specifies requirements for asset disclosure and regulations governing the offering and receiving of gifts for members of the executive, parliament and legislature.

The Advance Fee Fraud and other Fraud Related Offences Deed combats the persistently large body of fraudulent activities in Nigeria with upward to fifteen years in prison house. The Money Laundering (Prohibition) Act regulates making and accepting cash payments. Whistleblowers have trivial legal protection. The institutions established to gainsay corruption, namely the Independent Corrupt Practices Committee (ICPC) and Economic and Fiscal Crimes Committee (EFCC), take proved ineffective in curbing corruption, owing to incompetent leadership, insufficient funds, a lack of capacity, and no political support (BTI 2016). The EFCC has proved itself to be incapable of diligent prosecution, oft by not providing substantial show for charges or making mistakes allowing the defendants to exist acquitted on technicalities (Mondaq, May 2016). Nigeria has established a whistleblowing policy under which individuals can anonymously provide tips online; if these pb to the successful recovery of funds, the whistleblower is entitled to 2,5%-v% of proceeds. In the first two months since the policy has been in place, over USD 180 million have been recovered (Quartz, February. 2017).

Nigeria has ratified the Convention on Mutual Administrative Assistance in Taxation Matters, the Un Convention against Corruption (UNCAC) and the African Matrimony Convention on Preventing and Combating Corruption.

Civil Society

Freedom of expression is protected past the Constitution simply is non ever respected in practice; courts do not always judge fairly in cases involving journalists (FotP 2016). Journalists occasionally face interference from public officials, especially when reporting on high-level corruption (FotP 2016). Regime officials practise not always provide information to the press that they are legally bound to disclose (FitW 2016). Journalists and reporters continue to suffer from intimidation and harassment (FotP 2016). In one prominent instance, two journalists faced xi criminal charges, which were after dropped, including forgery and conspiracy to commit a felony, after reporting on plans by President Goodluck to increment fuel prices and oppose the merger of two opposition political parties (FotP 2016). The newspaper Premium Times, known for its investigative journalism, has faced repeated harassment (GIJN, Jan. 2017). Small-scale bribes and gifts to journalists are very mutual, but journalists themselves do not consider them a problem (FotP 2016), which calls their independence into question. However, the media landscape is described as ane of the nearly vibrant and diverse on the African continent (FotP 2016). The printing is considered 'partly free' (FotP 2016).

Civil society in Nigeria is weak, fragmented and lacks resource, although there is a positive trend in its evolution (BTI 2016). While the landscape of civil society organizations is among Africa's most vibrant (FitW 2016), ceremonious society organizations continue to endure from weak representation and limited organizational resource (BTI 2016). Labor unions suffer from similar limitations (BTI 2016). Individual media and religious groups have increasingly taken on the tasks of civil club (BTI 2016).

Sources

• World Banking concern: Doing Concern 2017.
• Natural Resource Governance Institute: Nigeria Country Profile 2017.
• pwc: Impact of Corruption on Nigeria's Economic system 2017.
• Premium Times: "Nigeria: Govt Apology Corruption Charge Against Supreme Court Judge", 16 May 2017.
• AllAfrica: "Nigeria: Despite Malabu Scandal, Vanquish, Eni Will Continue To Operate OPL 245 – Govt", three May 2017.
• Financial Times: "Vanquish and Eni Embroiled in 'Unholy Mess' over Nigerian Oil", 20 April 2017.
• Sahara Reporters: "USD 15 billion Artillery Deals: Console Members Seek Protection From Buhari", eight April 2017.
• Premium Times: "NEITI Calls for Probe of USD xv.eight Billion NLNG Dividends from 2004 to 2014", 6 April 2017.
• Premium Times: "NEITI Wants Nigerian Govt. to Recover Unremitted USD 21.eight Billion Oil funds from NNPC", iv April 2017.
• Premium Times: "Convicted Governor who Secured Bail with 'Fraudulent' Letter Released from Prison 'illegally'", 29 March 2017.
• The Nation: "Ladoja'due south Fraud Trial Resumes", 27 March 2017.
• Daily Post: "Former Governor, Bala James Ngilari Sentenced to 5 Years in Prison", half-dozen March 2017.
• Premium Times: "Revealed: Despite Leadership Modify, Nigerian Customs Remains Riddled with Abuse, Inefficiency", v March 2017.
• Global Investigative Journalism Network: "GIJN Joins Calls for Finish to Harassment of Premium Times past Nigerian Military", 23 January 2017.
• World Economic Forum: Global Competitiveness Report 2016-2017.
• World Economical Forum: The Global Enabling Trade Report 2016.
• Bertelsmann Foundation: Bertelsmann Transformation Alphabetize 2016.
• US Department of State: Homo Rights Practice Study 2016.
• United states Department of Land: Investment Climate Argument 2016.
• Freedom House: Liberty in the World 2016.
• Freedom House: Freedom of the Press 2016.
• Africa News: "Nigeria Rids Civil Service of l,000 Ghost Workers, Saving Over USD 600 million", 28 Dec 2016.
• BBC News: "Nigerian Supreme Court Judge Charged with Abuse", 21 November 2016.
• Nigerian Monitor: "How Police Recovered N2.75m Ransom From Serving Assistant Commissioner of Constabulary", Oct 2016.
• Pulse: "Agency Sacks 29 Senior Officers for Alleged Corrupt Practices", 20 October 2016.
• NRGI: "Tender Moment for Oil Sale Governance in Nigeria", xix October 2016.
• BBC News: "Nigeria Seizes USD 800,000 in 'Anti-Corruption Raids' on Judges", 9 October 2016.
• News24: "Nigeria Hunts Downward 700,000 Companies over Tax Evasion", 23 September 2016.
• Amnesty International: "Nigeria: Special Constabulary Squad 'Get Rich' Torturing Detainees and Demanding Bribes in Exchange for Freedom", 21 September 2016.
• Mondaq: "Nigeria: The Anti-Abuse Legal Framework and Its Effect On Nigeria's Development", 13 May 2016.
• Reuters: "Nigeria'south Vice President Says USD 15 Billion Stolen in Arms Procurement Fraud", 3 May 2016.
• Quartz: "Nigeria'due south Whistle-Blower Programme to Pay Citizens to Report Corruption is Off to A Not bad Get-go", thirteen Feb 2017.
• The Economist: "The USD xx Billion Hole in Africa's Largest Economic system", 2 February 2016.
• World Economical Forum: Global Competitiveness Report 2015-2016.
• Transparency International: Global Abuse Barometer 2015.
• NRGI: Inside NNPC Oil Sales: A Case for Reform in Nigeria 2015.
• Reuters: 'Nigeria starts investigating crude oil swap contracts', xv June 2015.
• World Bank Grouping: Enterprise Surveys – Nigeria 2014.

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Source: https://www.ganintegrity.com/portal/country-profiles/nigeria/

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