Nigeria: 80 Percent Businesses in Nigeria Bribe Government Officials – World Bank

A report from a World Bank study conducted in 26 states of the country released recently has indicated that about 80 per cent of businesses in the country paid bribes to government officials in 2011 to stay in business.

But the business community disagrees with the findings, even as Femi Falana, Senior Advocate of Nigeria (SAN) said it is actually the World Bank that is responsible for corruption in the country.

According to the report – World Bank’s 2011 report on investment climate in Nigeria – one-third of micro-enterprises agreed that “informal payments/gifts to government officials” were common occurrences, suggesting that registered firms deal more with such requests for bribes.

Only 20 per cent of micro-enterprise firms reported to have had foreknowledge of the amount of money required to “get things done,” a situation that means the informal payments are sudden and unplanned for.

These informal payments/gifts, the report went on, represented approximately 1.2 per cent of annual sales for all micro-enterprises. It added, too, that micro-enterprises dealing in government contracts were expected to pay approximately 4.3 per cent of the value of contracts that they were hoping to secure.

Manufactured goods attracted larger bribes (6.7 per cent) than those for small services (3.9 per cent). However, firms in the formal sector obviously spent more on corruption, as 47 per cent of formal firms claimed that informal gifts/payments were commonplace in comparison to 33 per cent for micro-enterprises.

Also, the report stated that micro-enterprises have a greater mistrust of institutions than formal firms. It said 63 per cent of formal sector firms and 72 per cent of micro-enterprises reported that the application of laws was not consistent and predictable; and that 41 per cent of formal firms and 20 per cent of micro-enterprises reported that they had advance knowledge of informal payments/gifts.

The study was conducted in Adamawa, Akwa Ibom, Bayelsa, Benue, Borno, Delta, Ebonyi, Edo, Ekiti, Gombe, Imo, Jigawa, Katsina, Kebbi, Kogi, Kwara, Nassarawa, Niger, Ondo, Osun, Oyo, Plateau, Rivers, Taraba, Yobe, and Zamfara states.

But the National President of National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dr. Herbert Ajayi told Leadership that its members do not engage in bribery.

He said to the best of his knowledge, no business owners especially in the manufacturing sector in this nation give any bribe to Government before doing any business.

He however lamented that government has been short changing the real sector. He is angry that the various Federal Government intervention funds to the real sector (N200 billion for the Small and Medium Enterprises Credit Guarantee Schemes; N300 billion for power and airline intervention fund; N200 billion, restructuring and refinancing facility, and N200 billion commercial agricultural credit scheme, among others) are yet to be fully implemented.

The vice-president of the National Association of Small Scale Industrialists (NASSI), Mr. Duro Kuteyi, however declined comment on the issue stating that he does not have direct business dealing with the government and so cannot respond.

A contractor who spoke with Leadership however contradicted the NACCIMA boss. He laments that for two years he could not get a job directly as he had to buy jobs from people who front for government officials. According to him, up to 10 per cent of the value of the job had to be paid upfront before he could get the job.

He explained that this has been a major contributor to the shoddy jobs being done by contractors in the country. He stated that this has also kept honest foreign businessmen from investing in Nigeria. “A friend of mine who came from UK came here to start a travel agency and he was told to pay some amount, a form of bribe before his company could be licenced. He could not tell that to his boss back in the UK so the business just went back to where it came from”, he narrated.

Falana, while not denying there is corruption in the country, however blamed the World Bank itsself.

“Although the report may be an understatement of the rate of endemic corruption in Nigeria the World Bank has failed to trace the root cause of the menace. Hence the Bank is not prepared to suggest measures that can arrest the growing wave of corruption in the country”, he said.

He said, though there was corruption in Nigeria up to the 1980s, it was not so prevalent at the time because the state funded the welfare of the majority of the people, provided social services at affordable costs and created jobs for the unemployed.

Education was virtually free while health services were affordable.