• Tuesday, April 16, 2024
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Transparency, Accountability and Taxpayers’ Money – Borg Research’s Analysis of Buhari’s Anti-Graft War

Transparency, Accountability and Taxpayers’ Money – Borg Research’s Analysis of Buhari’s Anti-Graft War

By Chijioke Ukomadu

The fiscal policy team at Borg Research—one of the fastest growing think tanks on the African continent today—has released a whitepaper titled; “Taxpayers’ Money or National Cake? Appraising Nigeria’s Anti-Corruption Campaign between 2015 and 2023.” This Report analyses former President Muhammadu Buhari’s (“President Buhari”) attempt at combatting corruption between 2015 and 2023, assesses the effectiveness and limitations of his government’s anti-corruption campaign, and provides recommendations for subsequent governments to adopt to combat corruption in Nigeria.

This whitepaper is the first proper analysis that has been conducted on the anti-graft policies of the former president’s anti-corruption campaign. It is important because, beyond its evaluation of the legal and policy implications of the anti-corruption campaign of the past eight years; it offers useful insights on some of the ways these policies can be made to perform optimally. This is in a bid to ensure accountability and transparency in the management of taxpayers’ money in the country.

In this Report, released in January 2024, Borg Research concludes that while numerous initiatives were designed to combat corruption, their application was selective and generally used to attack political opponents. As a result, there are concerns about the overall success of President Buhari’s war against corruption.

The Report highlighted the following attempts by the administration to combat corrupt practices in Nigeria.
Executive Order No 6. Of 2018

“On the 5th of July 2018, Buhari signed Executive Order No. 6 (E06) titled “Preservation of Suspicious Assets Connected with Corruption and Other Related Offences, 2018…a strategy to restrict persons involved in corruption allegations from dealing with the properties connected with the allegations—assets that were already subject to investigation—pending the final determination of the case by a court of competent jurisdiction,” stated the Report.

The Report noted that it was met with criticism, including an action at the Federal High Court to declare the Order unconstitutional. While the FG remained unfazed by the numerous criticisms and addressed some cases, its overall utility is difficult to determine.

“Although it is difficult to gauge the effectiveness of the Order, it is safe to presume that it offered some utility in the fight against corruption…Notwithstanding, it is unclear how the government managed the assets it recovered from the implementation of the Order,” stated the Report.
Voluntary Asset and Income Declaration Scheme (VAIDS)

The Report noted that the scheme aimed to promote voluntary disclosure of undisclosed assets and income to discharge outstanding tax obligations. Generally, the scheme was a success, according to the Report.

“Overall, it helped the government generate a total of $1.03 million in revenue and identify tax defaulters while also increasing Nigeria’s taxpayer database from 14 million to 19 million persons in 2018. The policy also had ripple effects on the economy as it contributed to economic growth in 2019,” the Report stated.

Voluntary Offshore Asset Regularisation Scheme (VOARS)

The Report noted that just like VAIDS, the purpose of the scheme was to provide redemption to defaulting taxpayers with liquid or fixed assets in a foreign country through honest and voluntary disclosures of the assets.

“The central objectives of VOARS were to minimise or eliminate corruption – largely white-collar crimes including money laundering – through the instrument of taxation, tackle tax evasion and instil the non-existent culture of tax compliance, and most importantly, generate increased revenue for the government by widening the tax base,” the Report stated.

Whistleblowing Policy

The Report noted that the policy sought to incentivise citizens to disclose corrupt practices regarding public interest, national security, administration of public finance, and company policies. However, the Report noted that the policy has seen a decline in its effectiveness due to a non-existent framework for the protection of whistle-blowers and the failure of the government to keep its promises.

“For the first two years of its operation, the policy achieved some success as it supported the anti-graft campaign in exposing instances of fraudulent or corrupt practices in public service and private practice. However, several years down the line, the effectiveness and momentum of the whistleblowing policy has drastically dwindled,” the Report stated.

The Report noted that a draft bill on whistleblowing protection is currently before the National Assembly.

Treasury Single Account (TSA) Scheme

The Report noted that this initiative sought to consolidate all accounts as a creative way to monitor all monies moving in and out of the government’s account.

“The policy is an initiative that created a cash management system whereby all government bank accounts were consolidated, in a single account or a set of linked accounts, for all government payments and receipts of monies,” stated the Report.

Removal of Ghost Workers

The Report noted that the inclusion of ghost workers in Nigeria’s payroll is quite rampant, costing the government billions of naira and necessitating a reaction from the government.

“Policy developments such as the Biometric Verification Number (BVN), TSA, and the Integrated Payment Personnel Information System (IPPIS), among others, were implemented to cure the plague of ghost workers in the Nigerian civil service,” stated the Report.

While Borg Research provided support that the government’s approach has been useful, it noted that there was room for improvement.

“Of course, one cannot dispute the fact that the IPPIS has attained some level of success in uncovering ghost workers. However, until the government takes its fight a notch higher by revealing the identities of the perpetrators of this fraud and prosecuting them, it can be presumed that the problem still persists because where there are no consequences for wrongdoing, deterrence is near impossible. You can expect that as thousands of ghost workers are being eliminated following verification exercises, new ghost workers are being added by the syndicates responsible for this corrupt practice,” the RReport stated.

Money Laundering Act 2022

The Report noted that the government has made numerous attempts to combat the issue of money laundering.

“The Act, which was enacted on the 13th of May 2022, repealed the Money Laundering (Prohibition) Act 2011 and constitutes the fourth regime of the anti-money laundering legal regime in Nigeria, which started in 2003, with subsequent amendments in 2004, 2011, and now 2022,” the Report stated.

However, “Despite the numerous regulations, the sad reality is Nigeria has not made significant progress in tackling the issue. A 2022 global ranking by the Basel Institute of Governance shows that Nigeria ranks 17th out of 128 countries, implying that Nigeria falls in the category of countries with high risks of money laundering and terrorism financing,” the Report stated.

Signing of Open Government Partnership

The Report noted that Nigeria joined the Open Government Partnership (OGP) in 2016, which seeks to ensure governments can be publicly held accountable for good governance by committing to some National Actionable Plans (NAPs).

“Nigeria’s NAPs consist of commitments spread across several thematic areas, to wit: anti-corruption and asset recovery, extractive transparency, fiscal transparency, citizen engagement and participation, access to information, governance, improved public service delivery, and climate change and environment,” the Report stated.

The Report, however, stated that Nigeria has recorded some success in the implementation of the first two NAPs.
Abacha Loot Recovery

Borg Research stated that the Nigerian government under President Buhari’s administration committed to recovering looted funds held in offshore accounts by the deceased General Sani Abacha. While the government made some progress in recovering some of these assets, there was no openness and transparency in their disbursement, according to the Report.

“The efforts of the Buhari administration have culminated in over $5.12 billion repatriated from the Abacha loot in the past 25 years. Nonetheless, the allocation of these repatriated funds has been shrouded with secrecy and an absence of full disclosure and accountability for the funds received,” the Report stated.

Anti-Corruption Institutions and Attempts at Combatting Corruption

The Report noted that the Economic and Financial Crimes Commission (EFCC), the Judiciary, the Code of Conduct Bureau, and the Independent Corrupt Practices Commission (ICPC) are some of the agencies responsible for combatting various forms of corruption. The Report identified the progress that each of these agencies has made.

“Notwithstanding, between 2019 and 2022, the ICPC announced that it had successfully recovered, forfeited, and restrained assets valued at N454.808 billion from individuals involved in corrupt activities. During the three-year period, the ICPC conducted 4,705 investigations and initiated 309 prosecutions, resulting in 85 convictions,” the Report stated on ICPC’s attempts at combatting corruption.

Borg Research, however, noted that there was a limited level of effectiveness in their attempt due to a myriad of factors, including unprecedented levels of corruption in some of these agencies and institutions.

On EFFC, the Report stated, “As a result, public sentiment has shifted towards the belief that the EFCC is now primarily focused on engaging in witch-hunts and pursuing political vendettas against the current government, rather than genuinely combating corruption. This perception is not unfounded, considering that there is evidence indicating a gradual erosion of the EFCC’s independence over the years, particularly evident in the manner in which executive authorities have removed and appointed its chief executive officers.”

On the Judiciary, Borg Research stated, “A survey conducted by the EFCC and the United Nations Office on Drugs and Crime revealed that “Nigerian Courts of law receive the highest bribes from citizens among all institutions plagued by corruption.”

“Inadequate funding poses another obstacle for the organisation…Additionally, the Bureau faces a shortage of operational vehicles, with only 33 available for its operations across 36 state offices and the Federal Capital Territory. This limited number severely hampers the Bureau’s ability to function effectively as an anti-corruption agency,” the Report stated when examining the Bureau’s efforts.

The Report stated, “It is important to acknowledge that while progress has been made, there is still room for improvement in the effectiveness and efficiency of anti-corruption efforts in Nigeria. Scholars have opined that the inefficiency of the ICPC can be attributed to political interference, Nigeria’s grinding judicial process, and poor funding, which impacts the size of its personnel.”

Finally, the Report summed up the administration’s effort at combatting corruption as follows. “Admittedly, there were various legal and policy developments that could easily earn his administration an A for effort, but these strategies failed to effectively nip corruption in the bud.”

“In retrospect, one cannot confidently say that Buhari’s anti-graft campaign was a success or close to being one. Nigeria ranked 150 out of 180 countries in the 2022 Corruption Perception Index of Transparency International.”

For future anti-corruption campaigns, the Report noted that: “…if the government is serious about tackling corruption, then it ought to put its money where its mouth is. Its seriousness in achieving this objective should be reflected in the proper funding of the anti-corruption agencies in Nigeria. In Nigeria where grand corruption and official corruption is the order of the day, it is impossible to fight this menace if the anti-corruption agencies do not have the financial muscle or skilled manpower to go to war with corrupt politicians.”

Chijioke Ukomadu is an Associate in the disputes and tax team at Templars—a tier-one law firm in Nigeria.