The private sector and corruption in Nigeria
Paul I. Adujie
New York, United States
Accurately, it can be asserted that, it is the duty and responsibility every good government to create, the environment and set the tone for good and effective policies, including conducive business environment, protection of persons and properties etc.in any society or country.
The Nigerian government has been blamed, properly so, for not setting a conducive environment economic and social development, over the years, particularly so, at this time, when public security and safety has steadily become a major issue for the citizens and corporate investors alike.
Corruption additionally, has become a hot topic among citizens and investors both inside and outside of Nigeria, as violent crimes, has apparently risen, due in part, to a battered and depressed economy, and since, the discussion or debate regarding corruption, has tended to be focused or centered around the government or public sector component of the hydra-headed corruption monster; This is so, even though, corruption levels or magnitude is not much different, in the private sector. It is clearly one thing, to blame the different strata of governments in Nigeria, for not doing enough to tackle corruption, especially by enforcing existing laws, to compel good corporate and individual behaviors.
But is quite another thing, and pretend that corruption in Nigeria is localized to public officers and public office-holders! Sellers of adulterated kerosene are practicing unethical business methods, and even a criminal enterprise, ditto for the groundnut-seller who cheats your out of more groundnut because he uses a crooked cup-measure, it is corruption or
bad business practice that the guy from my hometown want to sell unripe mangoes and other fruits that are not ready for harvest, to the unsuspecting and hapless town-dwellers, it is corruption and bad business practices, when banks and other financial institutions charge outrageous interest-rates, refuse to grant loans to legitimate business people and
companies, for capacity building, but grant loans to the well-connected and those wiling to wet-the-ground, but would never payback the loans!
There is a multiplier effect, when proper business environments, conducive for business is created in Nigeria, a loan to a person or company interested in farming, would gladden the heart of the prospective farmer, the bank will make genuine profits, and there will be abundant food, and food-supply, a win-win situation! A loan to a medical student, the
soon-to-be doctor, at the end, there will be doctors and medical offices; Banks will make legitimate profits, medical services will become more abundant, our entire society will, benefit, from a corrupt free society, from the pursuit of authentic business ventures and real investments, instead, the continued over-speculation on foreign currencies, hoarding of same and instead of the, over-invoicing, importation of sand and saw-dusts and attendant capital flights out of Nigeria, the same Nigeria, that sorely needs these capital!
It must be said, that enormous amount of laws are already in the books in Nigeria to tackle corruption or any other societal ills or malaise, that may presently exist in Nigeria; This is not to say, that amendments to these laws, would not be welcomed, amendments, that would invigorate these laws and give more teeth to them, and make them more effective, in addition to making new laws that take cognizance of new crimes, and new developments in old crimes, internet frauds and email frauds for example.
My main point, in all of these, is, good governance in Nigeria or anywhere else, requires the active participation by all, it is the age-old social contract; all over again, It is the duty and responsibility of governance to make and enforce laws, on the other hand, it is the corresponding obligation of citizens to obey these laws, and specifically, a citizen’s civic duty to help in preserving a good social process, a good social order and system, by playing their parts in nurturing the process, e.g. register to vote, doing ones part in assisting the enforcement of laws and rules that regulates public and private behaviors of everyone in the society.
All too frequently, some Nigerians are only good at pointing fingers to others! In this instance, there is a lot of finger pointing to the different levels of governments in connection with ineffectual implementation of policies, particularly, the anti corruption laws and rules in the public sector, these charge, to a large extent, is correct, however, it must be remembered, that the private sector in Nigeria is not faring any better, than the public sector, as far as corruption, greed, avarice and all manner of misconducts, that have subjected the collective reputation of Nigerians and Nigeria to public opprobrium, both in Nigeria and outside, leading to reproach from individuals, international institutions and various governments.
The private sector of the Nigerian economy, need to be visited with a giant searchlight, to expose certain practices, that are of necessity, inimical to economic and social development, especially at a time in Nigeria, that
everyone seem to have concluded or appears agreed on the proposition, that the Nigerian economy will not grow or become buoyantly better, unless and until Nigeria receives massive influx of foreign investments, in the different segments and across the broad and full spectrum of our economy. Cultism in Nigerian higher institutions of learning has become intractable, this sort of gross misconduct and abuse of public space, privilege and opportunity, is also corruption!
There is a need for Nigeria to get rid of all the bottlenecks, that could unwittingly portray our country as if, Nigeria is not investment-friendly, when in fact, Nigeria gives the best return to investment, than anywhere else, that anyone can find, anywhere in the world! Nigeria has the most liberal tax laws and policies, from local, to state and or federal, and
Nigerians are the most hospitable, friendly, happy and most charitable people that you can find, anywhere!
A Nigeria friend in New York, recently recounted what is now, an all too often, experience, frequently recounted by Nigerians in the Diaspora, who, desirous of investing in Nigeria and then, the elephant size rigmaroles that one is subjected, a Nigerian here, saves enough money, goes to Nigeria with the purpose or intention of, operating a rental service for farm equipments, tractors, ploughs, excavators and ridge digging implements, the Nigerian from New York, approached a bank in Nigeria, with a well crafted business plan, feasibility studies and all, only to find, that his bank,
where he has always saved his money remittances from New York to Nigeria, where all his investments were kept, would not even consider granting a loan to him! Unless he wets-the-ground!
Unless he offers to “wet the ground” or operate outside the laws of Nigeria, operate outside the laws of the land! What has Aso Rock got to do with this? What has the governor of your state and members of your state house of assembly got to do with this “wetting the ground” banking requirements? All he needed, was a loan to start a business!
It is the case in Nigeria, presently, according to very reliable sources, t is the case, that a request for a bank loan for any productive purpose, comes with the same answer for everyone who asks! And the answer of course, is NO! Banks and other financial institutions in Nigeria are, and have for more than twenty years now, been dealing in foreign exchange and other over-speculative trading sharp-practices, practices that do not encourage productive capacities of individuals or industries!
Banks in Nigeria are said, not to be interested in people who are starting candle factories, ice cream parlors or farms, or people seeking loans from medical schools or law schools, people who are good investments, people, who over an extended period of time would generated steady income and return-on-investments to the banks, because of the fact that, these persons, at the end of a given gestation period, would generate steady-income to pay-off their loans, granted by the banks for the pursuit of whatever legitimate enterprise, for which these loans were granted in
the first place.
In America for example, banks are quick to grant loan to productive ventures, whether it be, for the pursuit of education, especially in the professional cadre, or for the pursuit of other productive capacity
enhancing endeavors, such as manufacturing or farming etc.; These banks in America, would even give a lawyer or a doctor loan money while in medical school or law school, and subsequently give further loans upon graduation,
to persons who are desirous of establishing medical office or law office, to enable them do so, because the banks know for a fact, that such investments are very wise investments and are usually win-win situation for the loan recipient and the loan giver, bank.
In America, interest rates are controlled, and pegged by the Federal Reserve Board, which is like Nigeria’s Central Bank, and interest rates in excess of 25% is considered usurious and even illegal in most states! And bribes or wetting the ground is never a factor considered for getting a loan granted!
In Nigeria on the other hand, banks are allowed to charge whatever unreasonable rates, that the banks, arbitrarily impose on borrowers and potential investors! And what is worse? Persons genuinely seeking investment money, for higher education or the professions or investors, individuals or companies/corporations seeking legitimate and genuine
investment money, are frequently denied access to needed funds, whereas, well-connected charlatans, shysters and their pastors and imams, would wet the ground, and NEVER invest the loan, that is granted as a result! And of
course, such loans are never repaid, and these add to the cost of doing business in Nigeria, which help to portray Nigeria inaccurately, as not investors or investment-friendly!
For many years now, as I have mentioned above, it has been the case, that too many banks in Nigeria have no product lines or services and these banks therefore do not deserve to earn any profits, but, year in, year out, these banks declare huge profits! These banks are only profitable, not because they invest in profitable ventures or because they engage in any market research or any semblance of marketing, or creativities, but instead, because, they actively engage in over-invoicing and excessive speculative trading in foreign currencies or Foreign Exchange!
Some of these banks would make no profits at all, if they were to rely on there product lines and services for profit, but instead, the rely solely, on selling Foreign Exchange, offered by the Central Bank of Nigeria at a controlled price-rate and discount, only for these banks and other financial institutions, to resell the same Foreign exchange at unconscionable and unregulated prices, in secondary and parallel markets! This practice drives the lack of confidence in the Nigeria economy by some, this practice encourages capital flight and this practices has helped to impose a regime of the extraordinarily weak national currency, the Naira. Too many banks in Nigeria, are behaving like, absentee landlords! Reaping where they have not sowed!
The banks and other financial institutions in Nigeria, are therefore acting as if they were just passing through Nigeria, and as if these banks have no permanent stake or interests in the economic health of Nigeria, and the economic health of a strong Naira, and acting as if they have no interests in the fine logic of long-term investment portfolios! Essentially, acting like bad refugees, whose perception may be, such, “just passing through”!
How is it possible for banks in Nigeria to make huge profits? While simultaneously, refusing and neglecting to invest in agriculture, education or any other productive venture for that matter? Agriculture and food is the mainstay of the Nigerian economy, and most economies, in good or bad economies, or even at war times, people still, must eat, before they can grapple with anything else, How come the banks in Nigeria, do not invest heavily in agriculture and food production, education and industrial capacity building or enhancements? But instead, most banks in Nigeria, bid
on Foreign Exchange and over-price same Foreign Exchange and then, frequently collect huge margin of profits, without efforts, all at tax-payer’s expense, at the economy’s expense and at Nigerians and Nigeria’s expense!
All Nigerians must join the war on corruption and corrupt practices, this requires all Nigerians to do some searing soul-searching, we must realize that corruption is not limited to the Local Government Councilors and Chair-Persons of Councils, and that corruption is not limited the speakers of Houses of Assemblies and members of the Houses of Assemblies, or is it limited to the state commissioners or Governors and Ministers or limited to the National Assembly members or the Presidency! There is an avalanche of corruption in the organized private sector!
There is corruption in the groundnut-seller, who sells with a crooked measure, there is corruption in the petrol station that commits adulteration petrol or kerosene, or sells more than the legal pump-price as regulated; And there is corruption, in imposing fees or wetting the ground for doing your job, even if you are a private service provider or public employee! There is corruption that is said to permeate, and has become so pervasive in the private sector, the private sector, which appears completely off-the-radar of some public commentators and critics of governments!
On the one hand, the different levels of government in Nigeria, must ensure that there are effective policing and law enforcement efforts, however, unnecessary police-road-blocks or check-points, must be removed, as has been repeatedly promised, by different Inspectors General of the Nigerian Police; The Nigerian Customs, must be reformed, ensuring that there is free flow of legitimate commerce, while enforcing applicable bans on certain imports, as may be prescribed and determined by government from time to time; But without impeding legitimate exports and imports.
Legitimate imports, must not attract administrative hassles, that encourages bribes or unofficial fees and any other bureaucratic snafus, that only acts as impediments and obstacles to running a reliable, efficient and profitable business.
In fighting and combating corruption in Nigeria therefore, all Nigerians must join hands, and be prepared, to look beyond government misconduct, government corruption and be prepared to look beyond government efforts, at combating corruption; All Nigerians must complement and support government efforts to eradicate and eliminate corruption! In America’s declared war on terrorism for example, the government of the day, institute rules and regulations, and consequently, beseech the average American citizens to be more observant of private and public conduct, encouragement is given to all, to be more vigilant, and to report suspicious behavior, mindful of all the rights to privacy and all, all are encouraged to become citizen-police officers, helping law enforcement, by being its eyes and ears, at all
Nigerians must learn to blow whistle on corruption, everywhere and anywhere, this means, that, if you have information as a Nigerian resident in Lagos, Kano, or Enugu, regarding a prospective or contemplated fraud, fraud, that is about to be committed in Uba-Askira Local Government or in Damboa, or Jalingo, Asaba, or be it in Ibadan, we should raise alarm and supply information, to foil the fraud, or supply information, that will lead to the apprehension, prosecution and conviction of those involved, because a fraud on Nigerian tax-payers anywhere is fraud on all Nigerians and Nigeria, where-ever it occurs, where ever the conspiracy is hatched or eventually executed.
Corruption in Nigeria and efforts at eradicating it, must be, a multiple pronged efforts, and multiple pronged approach, in the private and public sectors, by governments and companies/corporations and of course, by the most indispensable elements or ingredients in all of these, the average citizens of Nigeria, who are and have repertoire of any available
information, on corrupt practices, in the private and or public sector in Nigeria, Nigeria can combat corruption effectively, it take all Nigeria with the desire to do so.
Paul I. Adujie is a Nigerian Lawyer and an Information Technology