Grand Corruption the biggest problem of Nigeria’s economy

Yemi Osinbajo
Yemi Osinbajo

Remarks by Vice President Yemi Osinbajo at the 7th Presidential Business Forum in Abuja, in which he illustrates how grand corruption is inimical to Nigeria’s economic development

Let me join my cabinet colleagues in thanking you for making the time yet again to attend the Quarterly Business Forum (QBF). This is the 7th Forum, and there are many here who have attended all seven, to them we are of course, especially indebted for their consistent faith and support for this process; even those who haven’t attended seven, have attended several and there are some who are attending for the first time.

It is important that we continue to emphasize that for us both philosophically and as a practical matter, our partnership with the private sector is fundamental. Aside from the QBF, we have established other platforms to harness the partnership, these include the Industrial Policy & Competitiveness Advisory Council and the Presidential Enabling Business Environment Council. These are interactive platforms where we bring the private sector to collaborate, develop and think through policies with us and in the Competiveness Council to even implement policies with us.

I think this is the way we ought and have to continue because when you consider the size of the Federal Government’s budget, and even when you total the aggregate States’ government budget, you find that the absolute amounts are very small indeed but once you factor in the private sector, that becomes the real economy of Nigeria and there is no way of talking about the economic development of Nigeria without the private sector seating at the table, playing a critical role.

I have asked the question, and I ask again? What was wrong with the Nigerian economy and what did we need to do to correct the flaws?

There are several issues, many of which have been well articulated in all earlier presentations. But I want to talk about what I think is probably the biggest problem but which we for some reason hardly talk about when discussing our National economy. This is grand corruption in the public finance space!

Sometimes, the way we talk about the Nigerian economy, it appears like it is the economy of say Norway or Sweden, where all things are equal. Even when we refer to what has taken place in our economy, we almost sound as if this is a normal business environment, a normal public finance environment but that is not the case. I don’t think that any considerations of our economic development can be properly or honestly done without fully analysing the role of grand corruption in the public finance space.

So despite record high levels of oil prices, very little was invested in infrastructure and record levels of leakages were recorded, especially in the past few years. This is the fundamental issue in our economy. Corruption affects everything, it even affects judgement as to what sort of infrastructure to put in place or whether to even put infrastructure in place or whether it would be completed. It is so fundamental that we cannot even think of our economy, without thinking of what to do about it.

So for example, I’m sure many of us are familiar with the so called strategic alliance contracts with the NNPC and NDPC.The promoters of the companies made away with close to 3billion US dollars, almost a tenth of our reserves at one point! There is no way if someone made away with that amount, a tenth of your reserves, that there won’t be a major economic shock! I

Sometimes when we talk about our economy, we say that we have relied on a single commodity, and that is one of the reasons why we are where we are. Yes, that is true but it is the fact that the proceeds of that single commodity were regularly hijacked consistently by a few. That is really the problem. If we spend the proceeds of that single commodity the way we ought to spend it, we won’t be where we are today.

That most of the proceeds go to rent seekers, who invest little in industry and production.

So for example, I’m sure many of us are familiar with the so called strategic alliance contracts with the NNPC and NDPC.The promoters of the companies made away with close to 3billion US dollars, almost a tenth of our reserves at one point! There is no way if someone made away with that amount, a tenth of your reserves, that there won’t be a major economic shock! If we don’t deal with it and talk about it, how do we really discuss our economy in any real honest way with a view to ensuring that these things do not happen again?

In one single transaction, a few weeks to the elections in 2015, the sum of N100billion and $289million in cash were embezzled by a few. When you consider that in 2014, when oil prices were an average of $110 per barrel, only N99billion was spent on Power, Works and Housing, and in one day, N100billion was issued and people essentially shared it and N99billion was spent on Power, Works and Housing. When we talk about our economy, we talk about it like it is normal but it is abnormal by every standard, completely abnormal. Nobody should talk about the economy when you have these huge leakages and corruption; corruption that makes what you allocate to capital and infrastructure nonsense.

From the presentation of Minister of Finance, N14billion was spent on agriculture in 2014, transportation N15billion. The total spend on capital in those critical areas was N153billion and in two weeks to the 2015 election, N150billion was shared and essentially shared! So if your total capital spend is N150billion and you can share N153billion, let’s face it, that is completely incredible! It is the sort of thing that doesn’t happen anywhere else in the world. When we talk about the economy, we absolutely must understand that is the problem

Today with less revenue, we have increased capital funding by 400% in Power, Works and Housing, Defence, Transportation and Agriculture. Economic analysis in Nigeria is either fraudulent or ignorant if we do not bring the money lost to corruption into the maths.

This is what distinguishes this administration from any other. It is the fight against corruption especially in public finance. And I can say that will all sense of responsibility, if you have a President who is not corrupt, at least 50% of your financial problems, especially in public finance, is over. This is what I have seen, and I can prove it with facts and figures.

If the President is corrupt, the entire financial system of the country is compromised, that is what we have seen from the figures. That is an absolute important point that we must take into account.

I am not saying that corruption under this administration has been completely dealt, certainly not. Where corruption has become systematic, you can’t deal with it all in one fell swoop. In any event you still have to deal with corruption fighting back, the system fights back, it is both an internal and external fight, and you have to be steadfast and strategic to win the battle. There is no way you have a system that has consistently thrived on corruption and proceeds of corruption and public finance in particular that will just roll over, no! It is a system that had actively dealt on corruption and the system affects all aspects of governance. So clearly trying to deal with it is not a walk in the park.

I want to say that task has already begun and being done consistently, I believe that going forward in the next few years, no matter how we slice it, if we stick to policies especially in controlling excesses and corruption in public finance, this country will make the kind of progress it deserves to make with all of the resources at our disposal. If we stick to a policy that ensures that as far as public finance is concerned, there is no impunity, and we hold people to account, I am absolutely confident this country has everything it takes to make the sort of progress that we deserve to make as a nation.

Again, let me thank everyone for your participation and continued support and confidence in the work we are doing. I want to say all the comments and issues are taken seriously. We will go back, and look at what we need to do to ensure that all our objectives, plans and thoughts come to fruition, and that our country becomes a better place for doing business and the economy of our country grows to the benefit of our people.

I want to thank you again very much. God bless you.


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