State of the Nation with Olu Fasan

April 16, 2020

COVID-19 is a fertile ground for aggravated corruption in Nigeria

COVID 19: Ministry of defence takes delivery of 10,000 face masks for troops.

By Olu Fasan

LAST week, I wrote about how the coronavirus emergency could trigger an escalation of power abuse in Nigeria, with increased violation of human rights and the rule of law. This week, my focus is on another potential fallout from the pandemic: corruption through the misappropriation of the COVID-19 funds.

Let’s face it: Except those utterly in denial or who are incorrigible government apologists, everyone knows that these are some of Nigeria’s worst attributes. I mean, Amnesty International has repeatedly highlighted Nigeria’s appalling human rights record. Nigeria is also known worldwide for its utter disregard for the rule of law. What about corruption? Well, one foreign leader – remember him? – once described Nigeria as a “fantastically corrupt” country, and, according to Transparency International, corruption remains endemic and entrenched in this country! So, these vices exist in Nigeria. My point is that COVID-19 could amplify them.

But why is COVID-19 a fertile ground for corruption? Well, the answer is simple. The pandemic has led to big government and fiscal splurges globally, and where there is big government, where there is dramatic expansion of public spending, corruption or misuse of public funds is not further away.

The only safeguards against such abuses are strong institutions, with embedded transparency and accountability mechanisms. But Nigeria is acutely institutionally-deficient, with absolutely no credible transparency and accountability structures.

Yet, this country is now flush with coronavirus-induced funds. Indeed, almost every country is flush with COVID-19 cash. As governments try to mitigate the economic consequences of the coronavirus and protect jobs and livelihoods, they have embarked on unprecedented fiscal activism, spending enormous amounts of money to support businesses, workers and families. For instance, the United States introduced a $2 trillion stimulus package; Germany put aside €656 billion; France budgeted €350 billion; and the UK allocated £450 billion, with a vow to “do whatever it takes” to support the people.

Now, if you are a citizen of any of these countries, one thing is certain: you can, as it were, go to bed and sleep soundly, safe in the knowledge that not a fraction of the money will be misappropriated or stolen. What’s more, you can hold your government accountable for where every cent or every penny of the money goes!

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But, alas, if your country is Nigeria, you will not know, with any confidence, where the COVID-19 funds go, nor can you hold anyone accountable for them! As the pandemic began to hit Nigeria in mid-March, the Central Bank of Nigeria announced a N1 trillion stimulus package, and then the Federal Government asked the National Assembly to approve a N500 billion intervention fund; it also withdrew $150 million from the Sovereign Wealth Fund and indicated it would borrow $6.9 billion – all to cushion the economic effect of COVID-19. As I said, the coronavirus is forcing every country to spend massively on relief measures; Nigeria too must spend to alleviate the pains of its people.

But here’s the rub. There is absolutely no credible evidence of where this money is going; no evidence that the vast majority of poor Nigerians who are locked down at home in utterly miserable conditions are receiving the help they badly need. Controversially, the government said it disbursed N100 billion to beneficiaries of its conditional cash transfer in one week. But how many people actually received the purported N20,000 social palliative? In his broadcast earlier this week, President Buhari directed that the number of households in the so-called national social register be increased from 2.6 million to 3.6 million.

Wait a minute! Last year, Maryam Uwais, the president’s special adviser on the social investment programme, SIP, said there were just over 700,000 on the register. So, when did the number jump to 2.6 million? Furthermore, given that, according to the World Bank, nearly 50 per cent of the Nigerian population live in extreme poverty (on less than $1.90 a day), who qualifies to be on the register? Elsewhere, that register would be made public.

In 2018, President Buhari’s wife, Aisha, said the SIP “has failed woefully”, and recently the Senate President, Ahmed Lawan, and the Speaker of the House of Representatives, Femi Gbajabiamila, strongly criticised its implementation. And, in a pungent intervention, an advocacy group, Human and Environmental Development Agenda, HEDA, which has been monitoring the SIP since 2016, said that “only 900,000 households have benefitted from the CCT, contrary to the claim that over two million households have been reached.”

That’s the crux of the matter. None of the government’s much-trumpeted spending programmes does what it says on the tin. Take another example: the government’s cash injection into food production. Here’s what an international study said: “In the rice sector, government incentives for backward linkages have benefitted ‘political farmers’ intermediaries who use political connections to access loans or vouchers and distribute these onward for profit”. That’s precisely the problem that besets the SIP and the COVID-19 funds: the poor who are their supposed targets are not the real beneficiaries.

Which brings me to the corporate donations. Like governments, business people and philanthropists worldwide are spending massively on COVID-19. In Nigeria, prominent private-sector donors, under the auspices of the Coalition Against COVID-19, CA-COVID, have donated N21.5 billion. But here’s the difference: whereas elsewhere, businesses give to charities, who are actually helping people in need, in Nigeria, they are, bizarrely, giving money to government to spend!

In his first coronavirus broadcast, President Buhari said all private donations should be made to the government “to ensure efficient and impactful spending”. Really? Efficient and impactful spending? How well-spent were the multibillion-naira private donations to the North-East’s Internally Displaced Persons’ funds, for which a Secretary to the Federal Government was eventually forced to resign for alleged mismanagement of the funds?

The truth is, no government in Nigeria can be trusted with public funds or private donations for relief measures. Sadly, COVID-19 will raise the risks of such aggravated corruption. Only transparency and accountability can prevent it. But where are they?