$10.5bn loss as George Etomi tells the story of how Nigeria Airways, Ajaokuta, others crashed

The story of the crash of most of Nigeria’s biggest public corporations has been used to wake chartered directors to wake up, learn, and rescue Nigeria.

George Etomi, a seasoned commercial lawyer and public sector resource expert, who told the story in Port Harcourt at the flag off of a new team to lead the south-south-south/south east zone of the Chartered Institute of Directors (CIoD), said Nigeria Airways consumed $528 million in public funds before liquidation.

As top directors hissed, he hit again, saying Ajaokuta Steel has absorbed an estimated $10 billion over four decades without producing a single commercial ton of steel.

Etomi told the CIoD these were not stories of bad luck but of governance failure; the same failure private sector codes were designed to prevent, now borne not by shareholders but by every Nigerian citizen.

Experts at the event

Speaking on ‘Visionary Leadership, Sound Corporate Governance, and Ethical Stewardship: Imperatives for Sustainable Economic Growth in a Dynamic Environment at the investiture of Chamberlain S. Petertside, as the 5th chairman of the Chartered

Institute of Directors (CIoD) Nigeria, Port Harcourt Branch, the expert said sustainable economic growth is fundamentally dependent on the quality of leadership, ethical conduct and governance systems within both public and private institutions.

He said while considerable attention has traditionally been given to corporate governance in private enterprises, experience has demonstrated that the same principles were equally essential within public institutions, as good corporate governance cannot thrive in an environment characterized by poor governance.

He stated that a well-run organisation sitting in a dysfunctional state can be likened to a strong, healthy person living in a polluted environment. “The person’s health may be good, but the environment will eventually win and weaken their immune system.”

He thus set out to examines the relationship between visionary leadership, sound corporate

governance, ethical stewardship, and sustainable economic growth. He analysed notable Nigerian institutional failures and successes and argued that governance principles must be institutionalized across both public and private sectors to foster accountability, investor confidence, institutional resilience, and national development.

He thus joined in making a case for directors from both the private and public sectors must come under one umbrella, the CIoD, to move both sectors forward at the same time with strong corporate governance guidelines, implementation, and discipline.

To buttress the weight of the impact of a weak governance structure on economic development, he gave what he called a quick statistic: “The Nigeria Inter-Bank Settlement System reported that a staggering N52.26 billion was lost to bank fraud and forgeries in 2024 alone, with a significant portion linked to internal collusion and insider abuse.

“Nigerians must first appreciate the environment in which today’s leaders and

directors are expected to operate. That corporate environment has changed profoundly, even within the span of my own professional career – from technological disruption, globalisation, geopolitical

instability, demographic shifts, and evolving stakeholder expectations.”

Showing how ethical deficit was why Nigeria’s Corporate Governance is Failing at the top, he said to execute any strategy effectively, ethical stewardship must ensure that decision-making remains transparent, fair, and aligned with the best interests of all stakeholders.

He said for a nation to achieve sustained growth, this exact relationship must be formally established within public institutions just as it is in the private sector.

Saying corporate governance mechanisms must transcend beyond the private sector, the Bayelsa-born expert said it is now common knowledge that for businesses to succeed, the government must provide an environment in which success is possible.

He said: “They have an important responsibility for shaping an effective regulatory framework that provides sufficient flexibility to allow markets to function effectively and to respond to new expectations of shareholders and stakeholders.

“The World Bank has emphasised that governance influences development outcomes by shaping incentives, promoting cooperation, and reducing institutional failures.”

He noted that countries with strong institutions tend to experience higher levels of investment, stronger capital markets, improved public service delivery, and more sustainable economic growth.

“Public institutions manage enormous financial resources, formulate economic policies, regulate industries, and provide essential public services. Many government institutions oversee budgets larger than those of major corporations, so, the standards of accountability expected of private companies should equally apply to public institutions.”

He showed several constitutional and statutory provisions backing public sector organisations to provide better life for Nigerians, he regretted that it is unfortunate that governance standards are often more rigorously enforced within the private sector than within government institutions.

He said this imbalance undermines public confidence, discourages investment, and weakens economic development, but in truth, the principles that make it work in a company are universal governance principles. He said the public (government) provides governance principles, but it is the private sector that practices it. He said the principles were as necessary in boardrooms as in government boards. “The evidence of their absence is not abstract: the CBN failed to publish its financial statements for seven consecutive years (2016 to 2022) in direct breach of its own enabling legislation.

He showed how Nigeria came close to solving the nightmare with many regulations and rules. “In October 2016, the FRCN issued a three-part ‘National Code of Corporate Governance’ that included, for the first time, a dedicated public sector component – covering board composition, independent oversight, audit committees, transparency, and accountability to citizens.

“It was in principle, exactly what our MDAs and parastatals needed, but it was suspended before it could take root. While the private sector received a replacement code in 2018, the public sector has since been without any governance framework.”

He said senior voices in the governance community have been clamoring for it, including Olusegun Osunkeye, former chairman of Nestlé Nigeria Plc., who made a direct public call for the urgent introduction of a corporate governance code for the public sector, arguing that both sectors must incorporate the same governance pillars for Nigeria to prosper.

“Work is now underway to fill this gap. The FRCN constituted a ‘Technical Working Group’ in 2023 to develop a Nigeria Public Sector Governance Code (NPSGC), and by early 2025 an exposure draft applicable to all MDAs, state-owned entities, and parastatals had been circulated for stakeholder input.

“The CIoD and FRCN co-hosted a dedicated webinar on the draft in July 2024, and the FRCN presented the Code to the National Judicial Council in May 2025, with a formal unveiling targeted before the end of 2025.

“It has not yet been formally issued, but the revised draft continues to progress through the final consultation and approval process.”

He said Nigeria’s current ranking as the 140th out of 180 countries on Transparency International’s Corruption Perceptions Index, and the 2025 Transparency and Integrity Index (TII), which revealed that only six out of 517 MDAs met the minimum benchmark are indications that the situation calls for urgency.

He also mentioned the ‘Code of Corporate Governance for the Public Sector (October 2016) which was suspended by the Ministry of Industry, Trade and Investment. “The private sector received a replacement in the Nigerian Code of Corporate Governance 2018; the public sector did not.”

He declared that even the government knows about this need and the gap. This is because; “The Nigerian government’s own legislative record confirms that it understands the connection between governance, institutional discipline, and economic growth. The Business Facilitation (BFA) (Miscellaneous Provisions) Act 2022 is a case in point.”

Among its most significant provisions, he disclosed, were the expansion of electronic general meetings to all companies, the establishment of a ‘single window technology platform’ to reduce bottlenecks in import and export trade facilitation, and most critically, the introduction of default approvals, whereby a relevant MDA’s failure to communicate approval or rejection of an application within the time stipulated in the published list (this was also introduced as a transparency requirement) is deemed an automatic approval.

“This last provision is particularly noteworthy because, it is in effect, a legislative attempt to impose accountability and time discipline on MDAs that have historically used administrative delay as a tool of discretion. The BFA therefore represents the government’s acknowledgement that MDAs must be held to structured, time-bound governance standards, and it is precisely this principle that the Nigeria Public Sector Governance Code must entrench more broadly and permanently.

“Beyond creating the required legal environment, however, the law has not gone a step further to ensure proper implementation of the legal framework which would attract and retain investments that would further develop the economy.

“The CIoD, as the foremost body for governance standards in Nigeria, is therefore, well positioned and duty bound to champion the full and faithful implementation of both the BFA’s MDA accountability provisions and the forthcoming NPSGC; ensuring that what the legislature has mandated is not allowed to remain a provision on paper rather than a discipline in practice.

“This effort must therefore be hastened, because every month the NPSGC remains in draft, MDAs operate without accountability structures, public resources flow through institutions with no governance check, and the enabling environment business requires is weakened by the absence of the very principles the private sector must uphold.

“The CIoD, which participated in the 2024 consultations and whose members feel the consequences of MDA dysfunction daily in their businesses, must demand this Code’s immediate finalization and the implementation of the provisions of the BFA. This is because the governance of Nigeria’s public institutions is not someone else’s concern, it is the operating environment in which every director and public servant in this room runs their organisation.”

He said Nigeria’s experience provides important lessons regarding the consequences of weak leadership, poor governance, and ethical failures in both the public and private sectors.

He gave examples of failed private sector organisations and said Oceanic Bank was incorporated in 1990 and grew into one of Nigeria’s largest publicly quoted commercial banks. “Its collapse is one of the clearest examples of governance failure in Nigerian banking history.

“The 2009 banking crisis was a classic case of governance theatre. Despite existing rules, executives approved billions in insider loans, falsified financials, and created a house of cards that eventually collapsed, requiring a massive taxpayer-funded bailout. The executives were ordered to refund $1bn, implicated on issues of negligence, reckless grant of credit facilities, and mismanagement of depositors’ funds.

“The bank was subsequently acquired in 2011 by Ecobank Transnational Incorporated, marking the end of its existence as an independent Nigerian banking brand.”

On the governance failures, Etomi said the board was dominated by a single powerful CEO with no meaningful independent oversight. “Insider lending was unchecked. Accounting manipulations led to the collapse, and despite the establishment of various board committees, there was no real oversight to prevent the scandal.”

He also mentioned Intercontinental Bank, which was acquired by Access Bank Plc in 2012. He said the board failed to establish robust oversight frameworks.

“The intertwining of personal relationships with lending decisions, absence of genuine credit risk and audit governance, and a board that did not exercise independent oversight were central to its collapse.”

He also mentioned Cadbury Nigeria Plc which was found liable for overstating its accounts to the tune of N13 billion. He observed that ethical leadership was completely absent as ambition was placed above integrity.

Major failures in the failed corporations were found to include insider abuse, manipulation of financial records, non-disclosure of directors’ interests, and a board that consistently failed to hold management accountable.

Skye Bank was affected by withdrawal of license while Arik Air, which had burdens of over $522m, was affected.

He stated: “Successive governments weakened Nigerian Airways corporate governance through political interference, patronage-based appointments, and inadequate board independence. The absence of effective commercial governance, strategic oversight, and financial accountability, with each administration treating the airline as a political resource rather than a commercial enterprise, contributed significantly to the airlines’ eventual collapse.

“The sale of NITEL to Transcorp was revoked in 2009 after years of mismanagement and fraud. A company that once held monopoly over Nigerian telecommunications was rendered completely irrelevant while MTN Nigeria, licensed in 2001, grew to over 60 million subscribers within a decade.

“There was no performance accountability and no board-level strategic vision. Politically motivated appointments occurred at every level and a leadership vacuum existed that allowed the entire institution to decay while the private sector transformed the telecoms landscape around it.”

The Ajaokuta Steel Company which has never been fully operational came into view.

On how it failed, Etomi said: “Once touted as Nigeria’s industrial crown jewel, its decades-long paralysis now casts a shadow over the nation’s economic security and strategic independence, with President Tinubu declaring in 2025 that the Ajaokuta crisis had gone beyond an economic setback and had morphed into a dangerous sovereignty risk.

“Over $8 billion in public funds have been committed to the project since 1979. It has never produced a single ton of steel at commercial scale.

“Governance failures include serial mismanagement across successive administrations, no continuity of institutional knowledge, contracts awarded and abandoned, governance captured entirely by political cycles, and the complete absence of a professional board with the independence and competence to hold management and government accountable.”

Way out:

In his recommendations, Etomi talked about need to eliminate the observed systemic leakages and drive true economic resilience. “We must implement four structural reforms at the governance level: Merit-based and professional board appointments; implement ‘Mandatory Governance and Ethics Training for Public Officials’ to provide regular training to enhance ethical leadership, governance competence, and awareness of fiduciary responsibilities.

“The CIoD and other similar organisations must lead the training and certification of these public officers.”

The other he mentioned was introduction of ‘Independent Non-Executive Directors (INEDs)’ just as publicly listed companies require independent oversight to challenge executive decisions, public sector boards must feature non-partisan INEDs chosen from the private sector.

He also mentioned ‘Governance Scorecard’, saying MDAs must be openly audited, publicly ranked, and held accountable to clear, measurable service delivery metrics.

Also, he stated, digital technology should be leveraged to improve transparency, reduce corruption, and enhance the efficiency of public administration. Others were requirement of annual governance disclosures by public and private institutions; strengthening of audit, compliance, and risk management function; promoting succession planning; strengthening sanctions for governance failures; and some other suggestions.

Conclusion:

He put the task at the doorstep of the CIoD, saying the institute stands as the apex body for corporate governance nationwide. “Therefore, it is your collective duty to act as the leading voice demanding this essential institutional change.

“We cannot build a sustainable, resilient economy on a fractured foundation. Let us leverage the occasion of this 5th Investiture Ceremony to champion a unified governance model, one that instills absolute transparency, restores public trust, and secures long-term economic prosperity for Nigeria.”

Others who made important remarks include the Adetunji Oyebanji, the national president, who charged chartered directors to work harder to rescue the economy; John Mbata, chairman of the occasion, who called for CIoD leaders to lead by example, and the new chairman who announced plans to build the CIoD Tower in Port Harcourt to serve as the bub of effective directorship resources in the zone.