Defence sector corruption is a major threat to Nigeria's internal security and political stability. Largely unaddressed, it has weakened Nigerian counterterrorism capacity whilst strengthening Boko Haram.
Nigeria's corrupt elites have profited from conflict; with oil prices at a record low, defence has provided new and lucrative opportunities for the country's corrupt kleptocrats. Former military chiefs have stolen as much as US $15 billion – a sum equivalent to half of Nigeria's foreign currency reserves – through fraudulent arms procurement deals. Defence sector corruption in Nigeria has enabled the political elite to accumulate and distribute political patronage. Longstanding military exceptionalism meanwhile, has justified weak and compromised oversight of securityrelated spending and excessive secrecy.
By far the most significant corruption opportunities are those exploited through inflating procurement contract values and creating "phantom" defence contracts. Such contracts are used as a vehicle for money laundering: facilitated via weak or corrupted Nigerian banks, illicit financial flows are often hidden in property in the UK, United States, South Africa and Dubai.
President Buhari's government has taken significant steps to identify and prosecute individuals involved in security sector corruption. And the campaign to focus international attention on returning stolen assets has been powerful. But however effective these efforts are, they will not be enough to win the long fight against corruption. The reality is that Nigeria's attempt to secure the repatriation of large quantities of illicitly laundered assets from places like the UK makes a better media headline than it does anti-corruption strategy.
With the President's first term ending in 2019, the window of opportunity for far reaching change is closing rapidly. Only a holistic reform agenda can deliver the deep, systemic changes and improvements in transparency and accountability needed to prevent the next US $15 billion quietly leaving Nigeria through the back door.
Ex-Air Force Chief of Staff Adesola Amosu was arrested by the Economic and Financial Crimes Commission in 2016, and his trial is still ongoing. Photo credit: Premium Times
Violent extremism thrives as a result of exploitative governing structures and state predation. Terrorist groups motivated by radical political and religious ideologies have destabilized Syria, Afghanistan, Libya, Iraq, Somalia, Nigeria, and other weak or misgoverned states. These groups have been able to co-opt disaffected populations by leveraging popular antipathy toward corrupt governments, often by presenting their own radical agenda as having greater moral value and popular legitimacy than the secular governments they seek to destroy. Predation by these regimes – whether it takes the form of elite corruption, security force abuses, or ethno-religious chauvinism – serves to validate extremist narratives about the immorality of secular governance.
The Boko Haram insurgency is now entering its fifteenth year, fed by the notorious levels of public sector corruption that have eroded the Nigerian state's legitimacy. Politicians compete for private control of national coffers, rather than delivering public goods based on the growing needs of Nigeria's booming population - on track to be the third largest in the world by 2050. Yet for the vast majority, corruption remains endemic and systemic, warping the social contract between the government and citizens. Patronage - not performance - is the ticket to advancement.
Securing a prosperous future for nearly 180 million people will be tough. The continent's largest economy has, since 1970, suffered from the largest per annum illicit financial outflow on the continent as corrupt actors seek to exploit banking loopholes to launder and hide their unlawful assets. An estimated US $217.7bn was illegally transferred out of Nigeria between 1970 and 2008. The same study estimated that illegal transfers from the African continent have tripled since 2001.
Across the board, public sector corruption is undermining the state's ability to address Nigeria's many challenges: socioeconomic underdevelopment, unemployment and insecurity. Nowhere is the failure of governance more evident than in the northeast, a region that was already impoverished even before it was devastated by Boko Haram. The conflict has displaced over 2.6 million people and killed as many as 50,000 since May 2011.
Corruption has been particularly destructive in the defence and security sector. Overlooked in peacetime, defence sector corruption has devastating real world consequences when conflict flares. With lower oil prices, corrupt elites have increasingly exploited alternative illicit revenue streams. The secret nature of defence and security budgets has made them the easiest and most lucrative opportunity to exploit. While Boko Haram has constructed a conflict economy geared around pillage, racketeering, and kidnapping; senior players in the Nigerian security sector have also profited from the insurgency.
Extra-budgetary spending on counterterrorism has dramatically increased throughout 2014 and into 2015, and with it the scale and scope of corrupt opportunities in the defence sector. Corruption has hollowed out the Nigerian Army, the largest in West Africa, and compromised the integrity of the country's Navy, which has been implicated in the theft of millions of barrels of crude oil in recent years. The result has been a corrupt war economy that incentivises high- ranking officials and security personnel to perpetuate conflict for personal gain. War has been a boon to Nigeria's corrupt.
Since coming to power in May 2015, President Buhari has taken some bold action in tackling defence sector corruption. Central to his approach have been two ad hoc, temporary audit committees: one investigating spending by the Office of the National Security Adviser and one investigating defence arms and equipment procurement. Taking on the defence establishment was a significant move: the evidence uncovered by these probes revealed that several of the country's former military chiefs, using dozens of companies, together stole as much as US $15 billion.
President Buhari's anti-corruption drive is a rare example of senior Nigerian defence and security officials being exposed to criminal investigation. By signalling that military impunity is not without limit, it is undoubtedly a positive step forward.
The approach has been coupled with a determined attempt to see the return of Nigeria's stolen wealth. During the London Anti-corruption Summit in May 2016, President Buhari demanded the return of illicitly laundered assets from the UK. The point was powerfully made, but sadly, the chances of success are slim. Asset recovery is a lengthy and resource heavy procedure. The UK performs relatively well compared to international peers, but even at the highest estimate, asset freezing and repatriation are tiny in relation to the vast scale of theft.
Over the past 12 years, UK enforcement agencies have prosecuted just a handful of cases – three state governors – and repatriated only a few million pounds to Nigeria. This is a fraction of what has surely been stolen. The extent of misappropriation of public funds by former General Sani Abacha is notorious. Listed as one of the top four most corrupt world leaders, during five years in office Abacha is estimated to have embezzled between US $2 and 5 billion. Despite unprecedented cooperation between UK, USA, Swiss and Nigerian authorities to return these stolen assets, the case is on-going 19 years after Abacha's death.
Abacha and these three governors all plundered defence and security budgets. Nigeria suffers from the continent's highest illicit financial flows because it offers the most opportunities for corruption. To stop today's assets being misappropriated, defence sector reform must be an equal priority to enforcement and repatriation, or Nigeria's leaders will always be chasing the past. Since independence, every civilian and military administration has come to power promising to root out corruption. Without progressing its approach to anti-corruption reform, Nigeria's current and future governments will at best be destined to the same media headlines as its predecessors.
With evidence uncovered by the two ad hoc audit committees established by President Buhari, the Economic and Financial Crimes Commission (EFCC), Nigeria's main anticorruption agency, has indicted over 300 individuals and companies for defence sector procurement theft and misappropriation.
Fifty-five people, including former government ministers, military chiefs, state governors, and bankers were reported by the committees to have stolen 1.34 trillion naira ($6.8 billion) over a seven-year period in the shape of arms equipment deals. A further $2 billion was allegedly stolen from the National Security Budget under the watch of National Security Advisor, Colonel Sambo Dasuki. What these investigations illustrate is a system of kickbacks, where billions of dollars were diverted from procurement spending, through the use of 'briefcase' companies, in order to fund the ruling party's supporters and ensure electoral success for the People's Democratic Party (PDP) in the 2015 general elections.
The amounts stolen are shockingly bold. Yet the misappropriation of budgets to buy political support is not new. Successive Nigerian leaders, both civilian and military, have built governmental power structures around the country's main income stream: oil. And until recently oil revenues have typically accounted for up to 70 per cent of government revenues - feeding powerful patronage networks. Obasanjo did not even appoint an oil minister, preferring to supervise the ministry directly himself. Successive administrations have maintained the same structure: former PDP president Goodluck Jonathan, a civilian, appointed his close ally Diezani AlisonMadueke as Oil Minister. Madueke – who has recently