G8 and Nigeria’s Oil Wealth: Corruption and Wealth of a Nation

 

 

Many a times we have heard the war cry and proposals to defeat corruption particularly the war against corruption. But instead of corruption to be diminishing it is rather gaining momentum and never seems to slow down. Corruption is now bigger than Nigeria when it comes to managing her oil wealth. Nigeria generates most of her wealth from oil export and corruption in the country revolves around oil and generated revenue.

 

 

Beyond Nigeria, corruption poses a great danger in Africa especially among the oil producing nations of Africa. The former South African president Thabo Mbek, who became the chairman of a panel that monitors Africa’s unlawful financial capital flight, reported that "Over 50 billion U.S. dollars is illicitly transferred from Africa annually with multinational corporations being the main culprits."

 

 

And it was further stated by the panel that "Sub-Saharan Africa has experienced an exodus of more than 700 billion dollars in capital flight since 1970, a sum that far surpasses the region’s external debt outstanding of roughly 175 billion dollars. It is believed that some of the money wound up in private accounts at the same banks that were making loans to African governments."

 

 

The sources of the capital flight comes mostly from earnings of oil and mineral exports and Osita Ogbu, a Fellow at Brookings suggested that  "billions of dollars in debt that Africa has accumulated in its post-colonial era are partially a result of irresponsible foreign lenders," as China.org.cn reported.

 

 

 

The discovery of oil in 1950s by Shell BP has complicated Nigerian project and the realization of a true nationhood. The ruling class was not ready to handle and deal with the global politics associated with oil.  They fell prey and became victims to politicking of the global oil business. The destruction and retardation of progress that oil corruption has dealt to Nigeria cannot be overemphasized. From the monstrous civil war to the increasing ethnic tension, oil has played a destructive role in making Nigeria a worse place to habitate. It is beginning to look like the civil war was just a proxy act foisted on the unsophisticated ruling class. The misery of oil corruption that is popularly acknowledged as oil curse is written all over Nigeria.

 

 

Nigeria’s economy has suffered due to the corruption of oil money. Unlike Norway that utilized her oil wealth to develop and diversify her economy, Nigeria is still stuck in mono-export economy. The revenue from oil would have become the enthralling force to uplift the economy and prepare the nation for the economy of 21st century. Even with flow-in of enormous foreign exchange from oil export, the country’s currency Naira is losing her ground. IMF that nearly crushed country’s economy in 1980s with its structural adjustment policy still has the ears of monetary and fiscal bureaucrats of the nation. The corruption has a detrimental psychological impact and has foisted self-doubt, incompetence and inferiority complex on the nation that Nigerians listen to only outsiders and have preferences for anything made in foreign lands.

 

 

The wealth of a nation has been wasted and the future of a nation is bleak and uncertain. The greatest danger of the oil curse is the corruption it rained on the ruling class and on the people of  Nigeria. Human resources which is the most strategic wealth of a nation has literally be forsaken for oil wealth. The ethos of a nation, the weaken work ethics of a nation and moral laxity are results of oil corruption.

 

 

The oil refineries are not functional, performing below capacities not because of lack of resources but due to corruption. It is incredulous but Nigeria refined its oil abroad, making it difficult to satisfy the local demand. The Oil-rich Nigeria at the dawn of 21st century could not provide drinking water and uninterrupted electricity to her citizens because of corruption. The infrastructures are shanty and decaying not due to lack of the money to fix them but corruption has become the impermeable wall that refused to come down. Time is running out for Nigeria, the oil resources that should be used to improve the economy through diversification have been squandered. The youth’s unemployment and restlessness have become the greatest threat to the political stability of the country. The Nigerian schools that were once the envy of the world has degenerated into centers of educational abyss and mediocrity. The products of the country’s higher institutions have been characterized with low quality and unskillful graduates.

 

 

 

It was the rats inside that conveyed to the rats outside on how to get the fish in the oven. The problems of corruption, mismanagement of Nigeria’s oil wealth and subsequent siphoning of ill-gotten wealth to foreign banks are mostly internal problem that calls for an internal generated solution. The hands of the G8 is limited, they cannot teach Nigerian leaders and elites the love of country. Most of Nigerian leaders, not all of them, that paraded themselves as patriots and nationalists are pseudo-patriots and fakes. They utilized the fabricated prestigious images to exploit and steal from their country. Moreover, the so-called leaders are above the law and they are untouchable. G8 leaders should focus more on making laws to stop western companies in participating in the corruption by cutting off access to nefarious practices that enable their Nigerian counterparts to be successful in stealing from the country’s treasury.

 

 

 

As far back as 2005, when former Prime Minister of Britain, Tony Blair held the presidency of G8 and the leaders were gathering in London to discuss debt remission for Africa. The well respected think Tank on Africa, Royal African Society’s research team headed by Richard Dowden issued a press release. The press release went on to describe the compassing damage of corruption in Africa and the energetic role that the outsiders played in helping powerful Africans to launder money into western banks.

 

 

This is how it stated the principal issue, "The World Bank estimates that $1 trillion is paid in bribes each year throughout the world. African countries are prominent among those said to be corrupt in Transparency International’s Corruption Index and the negative impact of high levels of bribery and theft is compounded by the tendency to take the ill-gotten proceeds out of the continent. Indeed, the African Union estimates that the continent loses as much as $148 billion a year to corruption. This money is rarely invested in Africa but finds its way into the international banking system and often into western banks. The proceeds of corrupt practices in Africa, (which the African experts group recommended in 2002 should be classified as a ‘crime against humanity’ because of its impact on ordinary people), are often laundered and made respectable by some of the most well-known banks in the City of London or the discreet personal bankers of Geneva and Zurich."

 

 

 

And it further stressed that "while the Swiss have been cleaning up their banking system, the City of London is now the laundry of choice for much dirty money. It is estimated that a third of the money stolen by the Nigerian military dictator, Sani Abacha, and found by the Swiss authorities in Swiss banks, had been deposited first in the British banking system until it was clean enough to bank in Switzerland. Switzerland has already repatriated some of the funds deposited by the Abacha family to Nigeria. The UK was strikingly unhelpful when the new Nigerian government authorities first asked the British for help in retrieving the stolen goods and so far has not repatriated any substantial amount of the money known to be sitting in London’s banks."

 

 

The World Bank’s Stolen Asset Recovery Initiative, United Nations and Western nations have not relented on the fight against corruption. But many leaking holes are still there and until they are completely plucked, winning the battle against corruption will not see the light of day in Africa and Nigeria in particular where many officials of respective regimes are pointing accusing fingers to each other.

 

 

Nigeria without doubt has an gigantic challenge in her hands when it comes to corruption and will need every help from domestic and abroad to diminish, if not eradicate corruption in her soil. But the point must be clearly made that the present administration should not be held responsible for this ugly situation in Nigeria because corruption has rooted deep in Nigerian soil before they came in.  Rather the administration needs encouragement, help and possibly oversight on the struggle to tame corruption.

 

 

A mounting of criticism are streaming from different quarters directing and targeting towards President Jonathan’s administration. But how can that solve the problem?  For modus operandi of illogical confrontation is not necessarily the solution. The fact is that the administration has not folded her hands and did nothing as its critic are alleging to. After all, take a look at the appointments President Jonathan made in coming into his presidency. He appointed one of best respected technocrats, Dr. Okonjo-Iweala as the minister of finance and coordinating director of the economy. You may not like everything she did but we all can acknowledged that she is a woman of integrity and a patriot who has taken the fight to the house of corruption with transparency and open book.

 

 

But it must be recognized that corruption has eaten deep into the social and economic fabric of Nigeria’s society and it will take time to be defeated. To fight and put a credible fight to defeat corruption requires a concerted, coordinated and synchronized strategy that must be formulated by the government and G8  inorder to put up a sustainable fight that will bear a positive dividend.

 

 

This is not time to give a lip service and issue press releases that will be buried in heaps of failures of yesterdays. The G8 during the era of Prime Minister Tony Blair spoke convincingly about the cancelling of debts owned by many poor African countries. Blaire even came up with a commission on Africa to better understand those problems that are hampering progress in the continent. He called African problem a scar on our collective humanity. But when Nigeria paid her foreign debt, Britain never hesitated in collecting her $3 billion share from Paris Club of Creditors that Nigeria made when she settled her $36 billion debt. Many responsible organizations and important global leaders including Archbishop Desmond Tutu made an appeal to Blaire’s Britain to return the money to Nigeria but he refused.

 

 

As for the forthcoming intervention from G8 and British Prime Minister David Cameron on lack of transparency and the growing corruption in the management of Nigeria’s natural resources especially the revenue generated from export of oil. G8 must be careful as not to appear patronizing and paternalistic. They should start from the point of view that western banks in London, Swiss Banks and others must not be exempted from the problem of corruption in Nigeria and Africa.

 

 

In case of Nigeria, The West and G8 must encourage and support governance that accommodates checks and balances in Africa. This will in turn provide accountability and respect for the populace. Nigeria is moving towards that direction and it needs a push, an escape velocity that will take her to the promise land.

 

 

Anti-corruption legislation is utmost important to be enacted in the West with regards to money laundering. For the responsibility of fighting corruption is too complex and gigantic to be left for one party. Both Africa and West must partake in the fight against corruption. The West must enact banking laws that will fish out bankers that accept laundered money and tainted wealth from corrupt African leaders and bureaucrats. Ill-gotten wealth must be returned to Africa without much ado, while the culprits must be exposed and prosecuted.

 

 

It may bring a certain comfort level to Nigerians that G8 and Western leaders are about to discuss the problem of corruption that has literally arrested development in the country but there is not much any outside entities can do for Nigeria. As the country is becoming older and has just celebrated her 52 years independence from Britain and will be celebrating in 2014 her 100 years of founding. Nigeria must comprehend one essential fact, whether she likes to hear it or not: Nigeria’s destiny is in her hands.