ANTI-CORRUPTION CAMPAIGN IN NIGERIA (1999-2007)

1. ANTI-CORRUPTION CAMPAIGN IN NIGERIA (1999-2007) The Politics of a Failed Reform David U. Enweremadu

2. Presentation Outline • Part I: The Fourth Republic and the Question of Corruption • Chapter 1: Introduction: Background and Objectives of study • Chapter 2: Understanding Corruption: Meaning and Causes • Part II: From a Pawn of Corruption to an Island of Integrity: The 4th Republic and the Quest for Moral Rebirth • Chapter 3: The Establishment of Anti-Corruption Agencies • Chapter 4: Judicial and Civil Service Reforms • Chapter 5: International Campaign for Recovery of Looted Assets • Part III: Assessing the Impacts and Results of Reforms • Chapter 6: Anti-Corruption Agencies and the Challenge of Capacity • Chapter7: Federalism and the Campaign against Corruption • Chapter 8: Civil Society and the War against Corruption • Chapter 9: conclusion

3. CHAPTER ONE: INTRODUCTION Background of Study - On May 29 1999, Nigeria launched a comprehensive anti-corruption policy, following the election of President Olusegun Obasanjo, a former military ruler and long time crusader against corruption. - The election of Obasanjo came at a time of rising domestic awareness of the socio-economic cost of corruption and dramatic changes in international attitude towards countries perceived as corrupt. This issues helped make corruption a major topic during the election and indeed throughout the tenure of Obasanjo - The seriousness of corruption in Nigeria was underlined by the voting of the country as the world’s `second most corrupt nation in 1999 (TI, 1999), just weeks before Obasanjo was elected, and most corrupt in 2000 (TI, 2000), as well as the sharp decline in most macro-economic indicators and living standards of most Nigerians despite huge oil revenue. - As soon as Obasanjo was sworn into office as President, he rolled out some reform measures to tackle corruption. These measures centred around the creation of new anti-corruption commissions (ACCs), reform of public bureaucracy and a well publicized campaign to recover looted assets from overseas.

4. Key Research Questions This study seeks to answer four specific questions: a. What motivated President Obasanjo to launch an anti-corruption campaign in 1999 b. What were the specific measures taken to fight corruption? c. How effective were these measures. i. e. their contributions to fighting corruption d. Why is Obasanjo’s campaign against widely perceived as a failure despite it prominence in the governments policy agenda and comprehensive nature

5. Chapter 2: Definition and Causes of Corruption Definition of Corruption • Despite all the attention corruption has attracted, the search for a common and all-embracing definition has remained elusive ( Bayley, 1966; Myrdal, 1968; Mcmullan, 1961; Nye, 1967; Leff, 1964; Van Kluveren, 1989; Fredrick, 1966; 1989; Etzioni, 1984;Khan, 1996, TI, 2009). • The understanding of corruption usually vary from one country to another, largely because its manifestation and representations differs from one political system to another. The manifestations of corruption is itself influenced by political culture, history, geography and the complexities of socio-economic and political development. • However, must authors agree that corruption will usually involve some form of Abuse Of Power Or Office For Selfish Or Non-public Gain (TI, 2009). • Examples of corruption, as observed in Nigeria include: • inflation of public contracts in return for huge kick-backs, • illegal acquisition of public assets (landed properties, businesses) • illegal oil bunkering • direct embezzlement of public funds, • frauds and falsifications of accounts, official records, documents (“ghost worker syndrome”), • examination malpractices in schools (‘sorting’, sex-for-marks), • Bribery & extortion (police and other security agents) • Bank fraud (criminal diversion of depositor’s funds). • Electoral malpractices (Vote buying)

6. Causes of Corruption • The centrality of corruption in the political life of many developing nations, and its negative consequences on social development has encouraged the proliferation of competing theoretical explanations on the causes of corruption • Some of the most prominent theoretical models on corruption which have illuminated divers aspects of this phenomenon include the: • developmentalist/modernization theory (Huntington, 1968; 1989) • functionalist theory (Leff, 1964) • public choice perspective/Principal-agent theory (Mbaku, 2002, Klitgaard, 1988) • cultural approach (Epko, 1979; Smith, 1979) • political economy approach (Joseph, 1987; Graf, 1988; Scharz, 1980; Forest, 1993). • Each of these theories has contributed greatly to the understanding of corruption around world. Yet, from the perspective of Nigeria or Africa, they will appear, at best, unidirectional, each shielding light on only one aspect or cause of corruption

7. Neo-Patrimonialism and Corruption in Nigeria • My study is based on the concept of Neo-patrimonialism, a hybrid system which defines political systems: characterised by the appearance of Weberian ‘legal-rational’ administration, but beneath the trappings of formal bureaucracy, procedural rules, and law, are based upon networks of personal loyalty and patron-client ties. Power is typically concentrated in a single ruler or a narrow oligarchy at the apex of a clientelist pyramid. Public and private resources are melded, as state assets come under the discretionary control of political elites, and public office serves as a conduit for private accumulation (Lewis, 1996;99). • The major characteristics of Neo-patrimonialism include the: • absence or the confusion between personal and public properties; • tendency towards personalisation of power at the summit but also at other levels authority, • selective distribution of public resources to ensure survival of the leader and/or the system • conversion of political power into economic resources (Médard, 1998; Jackson and Rosberg, 1998; Bayart, 1989; Sandbrook, 1985;Van de Walle and Bratton, 1994; Riordqn, 1972; Guenther, 1968; Willame, 1972; Theobald, 1986, Daloz, 2002). • The choice ofthe Neo-patrimonial approach is informed by the fact that in Africa, and in Nigeria in particular, corruption and its daily manifestations present characteristics and logics that is not exclusively economic, cultural, political or legal, as other explanations assume (Médard, 1998 ;p55.). The Neo-patrimonial approach takes into account all the major aspects of corruption (economic, political, cultural, historic etc.) • A combination of two factors gave rise to Neo-patrimonialism: the effects of age-long cultural values and practices (village patrimonialism) and the experiences of African people under colonial rule.

8. CHAPTER THREE THE ESTABLISHMENT OF ANTI- CORRUPTION AGENCIES (ACAs) * While in power President Obasanjo conceived and implemented a number of measures to fight corruption. One was the creation of the « Independent Corrupt Practices and Other Related Offences Commission (ICPC) » on the 29th September 2000 and the Economic and Financial Crimes Commission (EFCC) in April 2004, which became the single most important step taken by the President to actualise his anti-corruption policy. * The creation of these agencies was to placate growing domestic and international pressures. However, it also reflected some degree of political commitment (Obasanjo was a founding member of TI) * Although this will not be the first time anti-corruption agencies would be created in Nigeria, the coming of these agencies, especially the ICPC, raised a lot controversies, mainly because of the extent of their powers (EFCC was erroneously conceived as a tool to non-state actors) ICPC * According to Section 6(a-f) of the ICPC Act, ICPC will receive and investigate complaints from members of the public on allegations of corrupt malpractices and in appropriate cases prosecute the offenders, examine the practices, systems and procedures of public bodies and where such systems aid corruption direct and supervise the review and to instruct, advise and assist any officer, agency or parastatals on the ways fraud or corruption may be eliminated or minimised by them. But the ICPC could only prosecute corruption in the public sector and offences committed after the passage of the Act in July 2000. These and other limitations constrained the effectiveness of the ICPC. EFCC • The EFCC Act 2004 contained far more ‘draconian’ powers than those of the ICPC. It was enjoyed to to take all necessary measures to prevent and eradicate economic and financial crimes in Nigeria. This will include to identify, monitor, freeze, or confiscate proceeds from criminal activities (funds and properties) such as terrorism, financial and economic crimes, etc., collaborate with similar institutions abroad, especially in the area of research, investigations, and co-ordinate all other regulatory and security agencies involved in the eradication economic and financial crimes (Section 6) * After their inauguration the two ACAs took several important steps to actualise their mandates.

9. CHAPTER FOURJUDICIAL AND PUBLIC SERVICE REFORM • Unlike in the past when corruption was viewed as a moral issue (immorality of some public officials), The Obasanjo administration thought of corruption as a systemic and structural crisis, resulting from ‘excessive state intervention in economic and commercial domains’ and a ‘failure of institutions’. The idea was that corruption require the restructuring of the state, through privatisation of public enterprises and reform of public institutions, particularly the civil service and the judiciary. • In other words, ACCs (ex poste curative measures) must be complemented by a general reform of the public bureaucracy including the judiciary (ex ante preventives measures) if they must be effective. • Obasanjo’s strategy, thus, drew from two of the most dominant theoretical approaches in contemporary literature on anti-corruption: the market (Toye, 1987; Grindle, 1991; Evans, 1995; Klitgaard; 1995; 1996; Rose-Ackerman, 1997; Kaufmann and Siegelbaum, 1997; Ades and Di Tella, 2000; Mbaku, 2002 ). and neo-institutionalist approaches (Robinson, 1998) • The specific judicial and public service reform measures taken include: 1. Public Service - Privatisation of Public Enterprises; - Reforms in Management of public finance (Transparence and Strict Application of Financial Regulations in or due Process; Publication of Revenue Allocations to all Tiers of Government & Monetization of the Benefits of Public Officials - Reinforcing Administrative Capacity (changes in Employment, Retrenchment and Remuneration policies) 2. Judicial Reforms - Reforms Aimed at Improving Judicial Capacity (UNODC; 2001-2003) - Reforms Designed to Restore the Integrity of the Judiciary (NJC & FJSC)

10. CHAPTER FIVEINTERNATIONAL CAMPAIGN T0 RECOVER LOOTED ASSETS • One main feature of corruption in Africa in general, and Nigeria in particular, is the regular transfer of looted public funds abroad (Sindzingre, 1997; United Nations, 2002). Much of the estimated $350 to 400 billion siphoned by Nigeria’s political class is believed to be in foreign, mainly western financial institutions While this practice was tolerated in the past, since the 90’s, attention has shifted to how some of the these funds could be returned to help grow national economies. This idea is that, effective asset recovery, will not only help these poor countries redress the worst effects of corruption, it will also help send a strong message to corrupt officials that there will be no place to hide their illicit assets (Brinkerhoff, 1999). However, Nigeria’s quest to recover looted assets stashed abroad was largely provoked by revelations that followed Abacha’s death in June 1998, when it emerged that the former dictator and some cronies had siphoned billions of public funds into private oversea accounts. Between the time of his death and May 1999, General Abubakar (Abacha’s successor) recovered $825 million from Abacha”s family members, leaving a total of $1,3 billion frozen in several banks in Switzerland, Luxembourg and Liechtenstein (TI, 2004;102). All the funds were recovered within Nigeria. • The arrival of Obasanjo however saw the transformation of the loot recovery effort into an international campaign, aimed not only at recovering looted assets but also at securing reforms in the international financial system. • The effort of Obasanjo produced moderate results: the recovery of an additional $1,175 billion and the adoption several anti-money laundering measures by the international community (Switzerland, UK, EU, UN, G8 etc) • His Campaign was however undermined by his own undue focus on Abacha, limited cooperation received from some foreign countries (UK, Luxembourg and Liechtenstein ) , protracted litigation by accused persons etc. More importantly, the illegal transfer of funds by public officials did not abate, pointing to shortcomings in the campaign against corruption being waged back home.

11. Part III Assessing the Impact and Results of Reforms The effectiveness of a public policy, especially in terms of it being able to achieve its stated goal, largely depends on institutional capacity (powers, resources and leadership of implementation organs) and political will (support of major actors, including national leaders, local elites and members of civil society (Moharir, 2002;113; Fischer, 1995Goodin, 1996;41).

12. CHAPTER SIXANTI- CORRUPTION COMISSIONS AND THE CHALLENGE OF CAPACITY • The goal of Obasanjo’s anti-corruption campaign, like any other fight against graft, was not necessarily to bring about an immediate end to all corrupt practices. • The policy was rather aimed at putting in place structures and institutions that will help to detect corrupt practices and punish their perpetrators, which in the long run will serve as deterrents. • The tragedy was that the major institutions created to perform those functions (ICPC & EFCC), lacked the capacity to do so. Their problems spring from a multiplicity of sources, but the most pertinent included: inadequate human and material resources, Constitutional loopholes and ineffective criminal justice system and lack of autonomy. • The issue of autonomy or political independence became very pronounced during the run-up to the 2007 general elections when both sides of the political divide made spirited attempt to employ the ACCs as a tool to undermine their political rivals. • These challenges helped undermine the effectiveness and credibility of the ACCs, especially the EFCC that had initially attracted much public support and admiration following the successful prosecution of a good number of financial criminals, including two top public officials and scores of leading fraudsters.

13. Table 1: Comparative Performance of ICPC and EFCC • Name of Institution ICPC EFCC Total • No of petitions received 1846 5400 7246 • Value of funds/assets recovered N A N520 bi ($4b) N A • Number of investigations concluded 80 550 630 • Number of prosecutions launched 49 300 349 • Number convictions won 1 NA N A • Number of persons convicted 2 92* 94 • NB: These figures were for 2005/2006. For the ICPC, they covered September 2000 to July 2005 (5 years), while for the EFCC they only reflect April 2003 to June 2 2006 (3 years). • * These data are only valid as at l0 October, 2006.

14. CHAPTER SEVENFEDERALISM AND THE CAMPAIGN AGAINST CORRUPTION • Contrary to what most people thought, The Obasanjo led anti-corruption campaign was, for all intent and purposes, a policy of one level of government, whereas the country, being federal state, is made up of three levels of government (federal, state & local), each relatively autonomous from the other. • While supporting the federal campaign against corruption in theory, Nigerian states in practice demonstrated not only a very strong aversion to the anti-corruption agenda of the central government, but also a common unwillingness to initiate their own local anti-corruption measures. • At the national level, the states opposed both the passage of the ‘national’ anti-corrurption laws, which they argued violated federalism. As for the ACCs, which they refused their cooperation, they tried to portray them as instruments design for political enemies. • At their own local levels, Nigerian state governors however refused to initiate similar anti-corruption programmes, despite rampant corruption in their states. The few states that did initiate local anti-corruption projects (like Shariah in Zamfara), lacked the political will to implement them. • Most of the states, notably the oil producing states of the Niger Delta, had no anti-corruption programme at all.

15. CHAPTER EIGHTCIVIL SOCIETY AND THE WAR AGAINST CORRUPTION • The contribution of civil society (CS) to good governance springs from two perspectives. The first is that CS helps to plant values and civic behaviours among its members and thus helping to construct a vision that is supportive of good governance. Secondly, through their ‘advocacy’  and ‘networking’ roles, CS seeks to influence or force political leaders to adopt positions that conform to their good governance agenda. • Nigeria has long boasted of a vibrant and diversified CS. But with the exception of the press and a few spontaneous movements, struggles against corruption waged by successive governments in Nigeria went on without the active participation of CS. • The Obasanjo years (1999-2007) however saw the heightened participation of CS : anti-corruption NGOs, labour unions, professional associations, ethno-religious associations movements, and the organised private sector. • Two reasons accounted for this change: First is Democracy, which offers more possibility for the population to organise and participate more actively in the making and implementation of public policies (Lewis, 2004;118; Chowdhurry, 2004) and Second, Obasanjos’s policies itself which indirectly encouraged a more active role for CS. • The increasing role of CS however did not translate into an affective battle against corruption. Most of the civil society institutions were weak and ineffective in their struggles. • Much of their problems sprang from a lack of independent source of funding, which eroded their autonomy, the absence of friendly legislations and practices, such as a Freedom of Information law (Asobie, 2005), their own continued preoccupation with material issues (Momoh, 1996), and inability to go beyond ethno-religious solidarity (Iredia, 2005) or rivalry, poor networking between different associations, the hostile attitudes of government to these institutions, and in some instances the rent seeking behaviour of those at the helm of affairs in these organisations.

16. CHAPTER NINECONCLUSION • From the foregoing, its clear that corruption and the fight against corruption did receive much attention under the Presidency of Olusegun Obasanjo. • In his attempt to fight it, President Obasanjo embraced several policy measures, some of which included policies to reform the public services : accelerated privatisation, reform in the management of public revenue and expenditures, design and implementation of news on employment and remuneration for public service and reform of the judiciary; establishment of new and more powerful anti-corruption agencies: ICPC and EFCC, and a global campaign aimed at checking the diversion of public funds abroad and the recovery of assets already sorted out of the country. • While it is true that some of the reforms introduced  -privatisation of public enterprises, reform of the civil service and the judiciary – are still ongoing and have long term benefits (Whitehead, 2000; 110), the implementation of several other measures with short term gestation period – adoption of anti-corruption agencies and recovery of public funds kept in foreign accounts – have been difficult and so have not brought significant progress. • The implementation of these measures have proved extremely difficult for a number of reasons, two of which are particularly worthy of note: Weak Capacity of ACCs and limited Political Support for a strong Anti-Corruption Policy ( federal, & States Civil Society) • The emergence of a new political orientation among the political class, followed by reforms in Nigeria”s anti-corruption institutions will be required to move the war against corruption foreword.

17. Appendix • Nigeria's Corruption Perception Index • Year score Position • 2007 2.2 147/180 • 2006 2.2 142/179 • 2005 1.9 152/163 • 2004 1.6 144/145 • 2003 1.4 132/133 • 2002 1.6 101/102 • 2001 1.0 90/91 • 2000 1.2 90/90 • 1999 1.6 98/99