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ASSESSMENT OF ORGANIZATIONAL EFFECTIVENESS OF ECONOMIC AND FINANCIAL CRIMES COMMISSION (EFCC) IN COMBATING FINANCIAL CRIMES IN NIGERIA, 2003-2012

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CHAPTER ONE:

INTRODUCTION

                                                                  

1.0 INTRODUCTION. 

1.1 Background to the Study:

Crime, in whatever form, represents an infraction of the law. It is a changing concept that is dependent on the social development of a people. It connotes an act deemed socially harmful; or dangerous and the reason for making any given act a crime is the public injury that would result from its frequent occurrence. All crimes are not the same. In some, only one individual is involved while in others many people collaborate in organizing and committing the crime. Crime is a problem not simply because of its damaging consequences, but the way its problems are conceptualized and perceived. Above all, the constitution of crime is never self-evident; it remains a controversial and contested concept in its own right (Muncie and McLaughlin, 1995:2). This challenge nevertheless, crimes entail different kinds of illicit actions that are both contrary to the law as well as detrimental to the individuals, the society and the country at large. Crimes are broadly divided into two categories which are: ii) ordinary types of crimes and ii) serious types of crimes. They are also classified into social, political, economic and financial crimes.  This study is centered on economic and financial crimes. The existence of this kind of crimes in Nigeria is responsible for her weakened socio-political structures, to the extent that the Nigerian-state cannot appropriately guarantee the human security of her citizens.

According to Shehu (2006:1), financial crimes refer to offer or acceptance of any benefit to do or not to do certain things, or carryout any act that is prohibited by law or morality. Accordingly, the major economic and financial crimes include advance fee fraud, corruption, drugs, and human trafficking, fraud and forgeries, and money laundering. Despite the good efforts by well-meaning and hardworking Nigerians, financial crimes aside from the many socio-political conflicts have made very popular for the wrong reasons. In Nigeria, and indeed as in most developing countries, the issue of financial crimes raises an important question about the relationship between the state and society and between wealth and power (Shehu, 2006:1). Obviously, the relationship between the state and society; and between wealth and power in Nigeria, has not only been weakened, but has continued to deteriorate progressively due to the leakages in the system that permitted the easy and continuous diversion of public resources into the hands of a few specific elite groups and individuals that are not productive or unwilling to contribute to the nation’s economic growth and national development.

The irony is that Nigeria is a low-income developing country (Todaro and Smith, 2005:106) that needs to carefully mobilize and utilize her resources to fast track the provision of the necessary infrastructures so as to create the enabling environment for her national development. This national demand has over the years been undermined by corruption against which past government have failed to mitigate. Her inability to curb the vicious attack of this monster on her finances has hampered her ability to affect the developmental needs of the Nigerian state. The ‘expectation-minimal capability paradox’ (Schreader, 2004:177) resulting therefrom, reaffirms the need to mitigate corruption and the right use of the meager finances available to the state. The precarious financial condition of the Nigerian state dictates that government expenditure should be guided by the cannons of sanction, economy, surplus and benefits (Jhingan, 2008:71).

Ensuring fiscal safeguards is necessary as it has far-reaching implication on employment, production and distribution of resources in the polity which in turn, affect the revenue generation capacity of the government. Managing state resources according to the dictates of these cannons will enable the government to maximize the benefits of its use of resource and minimize wastages. This will facilitate Nigeria’s capacity to tap beneficially from her positive development indicators. Some of these positive development indicators are: – favourable climate, abundant natural resources, human resource endowment, the existence of a competent bureaucracy, favourable growth rates (Bello-Imam and Obadan, 2004, Agba, 2004 and Adubi, 2004).

It is, however, observed that most Nigeria’s post-independent leaders misappropriated available state resources for private benefit rather than use those funds for nation building. The pursuit of short term gains by Nigerian leaders in the management of public resources allowed corruption, an aspect of financial crime to become endemic. The towering posture of corruption was strengthened by a situation where a person’s standing in the society was and is reckoned by his bank balance or how many houses and cars he owns (Osunbor, 2008) irrespective of how they are acquired. This attitudinal weakness contributed to watering-down the right ethical standard required of public officials and citizens. Corruption represents all forms of abuses that negate the oath of office, ethical codes of conduct, the law and due process for financial or non-financial gains by those involved.

The problem of economic and financial crimes in Nigeria is aggravated by the involvement of the public bureaucracy. In the literature, opinions have dovetailed that economic and financial crimes in Nigeria’s public bureaucracy was provoked by military intervention in nation’s politics. Military rule as it is argued, had been responsible for dragging its bureaucrats into the prevailing political power play. But without the necessary control, bureaucrats became the instrument for the use and abuse of power and public resources. The prevalence of economic and financial crimes practices among government officials was first evident during Gen. Gowon’s regime. During that period, state governors and many other senior local, state and federal government officials were found to have corruptly enriched themselves (Ibeanu, 2008; Kukah, 2003 and Mohammed, 1986).

The general implication of state officials’ involvement in economic and financial crimes in Nigeria, is that the money that ought to be used to build schools, hospitals, homes, roads, water schemes, and to provide adequate transportation system, propel industrialization and ensure good life for the people, has been systematically stolen (Iyare, 2008) by those who have access to public purse. Specifically, public funds that should have been used for providing social amenities have been corruptly diverted into private hands. The general consequence of corruption in Nigeria is the deprivation and impoverishment of many to the advantage of a few (Heinecke, 1986:96).

Economic and financial crimes are inimical to national progress because they are responsible for the inefficacy of public institutions in Nigeria (Ozor, 2004). Ineffective public institutions have impeding impact on the institutionalization of good governance and national development efforts. The absence of good governance has hindered the nation’s chances to access and utilize international aids from donor agencies and other development partners, thereby compounding the nation’s incapacitation to propel its national development agenda. It is in a bid to change the inhibiting effect of corruption on Nigeria, that mitigating corruption became a crucial governance issue for Obasanjo’s democratic administration in 1999.

To effectively combat economic and financial crimes in Nigeria, changing the ineffective methodologies that were hitherto utilized to combat financial crimes by past regimes in the nation is mandatory. Evidently, it became necessary to establish a virile and effective organization(s) to combat financial crimes in Nigeria for that purpose. An institutional measure is imperative at this juncture, considering the fact that the period from 1975-1998 witnessed the use of ad-hoc measures to combat corruption with very minimal success. This measure however proved counter-productive and ineffective because perceived culprits and, some honest public servants became victims of malice or genuine error (Gboyega and Yaya, 1986:7) by those empowered to curb financial crimes. Those pre-existing legal and ad-hoc measures were grossly inadequate to combat the sophisticated nature of financial crimes. The inability of previous governments to effectively mitigate this monster has allowed corruption to stand as an institutional problem in Nigeria (Idris, 2008).

Acknowledging the difficulty that characterized previous efforts, the Obasanjo’s administration in 2003 established and empowered the Economic and Financial Crimes Commission (EFCC) to curb financial crimes, reduce waste, inefficiency, and instill in Nigerians the right sets of values by discouraging rent-seeking and other unproductive values (NEEDS, 2005:101). To achieve this goal, the Commission must be effective. Effectiveness is about doing things right. It is the ability of an organization to meet the demands and expectation of its various stakeholders (Thompson, 2004:1125). As it is now, it is obvious that the efficacy of the Commission to perform her responsibility is presumed questionable. It is to determine whether the EFCC is effective or otherwise that this study is germane.

1.2 Statement of the Problem.

The state and its institutions are significant to the lives of the people; however, this relevance can be rendered useless due to financial crimes by its agents. The present distrust expressed by the people towards the Nigerian state, its leadership and its institutions is caused by financial crimes which have continued to affect the lives of the citizens adversely. Such unpalatable situation questioned the need for the people to subject themselves to the control of the state. Evidently, it diminishes, if not break, the synallagmatic cord between the people and the state as corruption redirects the concentration of wealth in the hands of a disproportionate, and lazy few (Kupolati, 1990 in Jega, 2007:198). This explains why in the last 45 years, close to $600 billion was generated from oil resources without much to show for it in terms of socio-infrastructural (Iyare, 2008:35) development.

The entrenched culture and pervasiveness of economic and financial crimes in public and private sectors permitted the flourishing of all forms of informal economic activities that are both illegal and unprofitable to the Nigerian state. Consequently, the society has continued to produce some unscrupulous citizens who have promoted drug-trafficking, advance fee fraud and other financial malpractices (Lame, 2001:15) with its attendant ‘social decay’ (Ifesinachi, 2008:153-173) and deterioration in various sectors (Obadan and Edo, 2004; Iyoha, 2004) of the national economy. The preponderance of these illicit activities facilitated the thriving of black economy (Folarin, 2009:16-19). This further strengthened the persistence of financial crimes thereby allowing them to overwhelm and weaken the pre-2003 mechanisms for combating those anti-progressive economic vectors in Nigeria. Dike (2005) captured this aptly that corruption in Nigeria is pandemic and it has defied all the necessary medicine. Consequently, corruption has become so pervasive in Nigeria that it has turned public service into a kind of criminal enterprise (HRW, 2011). The table 1.1 below speaks volume of the prevalence of corruption in Nigeria.

Table 1:.1 Nigeria’s Corruption Rating by TI from 2003 to 2012

YearsCPI Scores out of 100%Rankings
200314132 out of 133
200416144 out of 145
200519152 out of 159

Source: Onuigbo, R. A and Eme, O. I, (2015) Analysis of the

Legal Framework for Fighting Corruption in Nigeria:

Problems and Challenges. In: Kuwait Chapter of Arabian

Journal Business and Management Review. Vol. 5, No. 3.

Pp. 1-23)

 

To mitigate economic and financial crimes in the past, various legal and institutional frameworks were established (see page 40-41 of this work; Idowu, 2009; Sampson, 2009). Most of those frameworks established to mitigate this monster from 1975-1999 were ineffective against this ill (Bello-Imam, 2004; Smah, 2009). Each political regime came to power promising to eliminate the practice and punish offenders, only to fall into the same pattern (Almond, et. al., 2012:671). This does not preclude the fact that

several timid attempts were made during the Shagari administration, it was the Buhari led military government that elevated the fight against indiscipline (corruption) into a kind of a national war-cry with the birth of War Against Indiscipline (WAI). Relentless campaigns were wage to fight all manner of problems considered as indiscipline, some of which occasionally led to various abuses (Political Bureau, 1986:216).

 

As a result, it became unlikely that this culture will be changed within the foreseeable future by the present available social apparatus of law enforcement or by ad-hoc approach to the issue of corruption (Political Bureau, 1986:216). The fundamental question then is why were the previous mechanisms for combating financial crimes ineffective (Political Bureau, 1986; Smah, 2009)? The answer may not be unconnected with the appendant lack of efficacy of state institutions (Jega, 2007) induced by mismanagement, indiscipline and corruption (Kukah, 2003:71). This was facilitated by the fact that almost all the activities of the government were shrouded in secrecy, devoid of transparency and accountability which contributed in weakening the fight against corruption.

Those control mechanisms became political tools in the hands of autocratic regimes in Nigeria who sought for legitimacy by using them for witch-hunting and harassment of opponents and vocal voices against the government. As a result, most of those feeble attempts never survived succeeding administration (Sampson, 2009:86). Some of those mechanisms that outlived the regimes that established were themselves ineffective because of some inherent inadequacies that they possessed which permit economic and financial crimes to thrive in the country. One of those defects is that the legal instruments (criminal/ penal code) were not only obsolete but inappropriate, hence, could not prescribe severe punishment that will deter financial crimes. The second issue relates to the weedy organizational arrangement associated with ad-hoc arrangement.

While the third loophole has to do with the short life span of ad-hoc commission which did not allow interested parties to follow up on financial crimes cases that had not been concluded and properly disposed-off. Sadly, too, most of the ad-hoc commission members treated some of the accused persons with bias or favoritism and as such yielded little result (Smah, 2009:120). The rigid structuring and conditions (terms of reference) of those ad-hoc commissions only impeded them to effectively respond to the demands of an ever changing, complex, dynamic and latent environmental forces that aided financial crimes actors to thrive in the nation. The implication was that as each regime came and went corruption grew more bold and ravenous (Achebe in Almond, et. al., 2012:671).

To curtail, if possible eliminate it significantly, the EFCC was established to combat the various forms of financial crimes in Nigeria. However, it is observable that there has been increasing discontent among most Nigerians about how the EFCC has been handling financial crimes cases. It is common scene for people to get arrested for financial crimes, charged to court, get bailed and come back home to live normal lives as if nothing had happened or are never get convicted (Mohammed, 2013:131-132) even when it is glaring that such individuals are guilty of one or another form of economic and financial crime. This has been the case of most ministers, governors, legislators, captains of industries, some former police chiefs, some bank managing directors and heads of companies indicted in the oil subsidy probe 2012 under the President Goodluck Jonathan administration. Most of the cases brought against them were struck-out for lack of merit while some of the cases simply died a natural death (Folarin, 2009:26). The inability to impose on the offender appropriated punishment, financial crimes have continued unabated in Nigeria to the extent that it has become a norm and this news is no longer stunning (Ogundiya, 2012:52). It has been observed also that rather than focus on combating economic and financial crimes, the EFCC has been accused of the capricious use and abuse of its powers to silence dissenting political voices. It has also been averred that

the EFCC lent itself for use by OBJ in the pursuit of his third-term agenda against perceived opponents and renitent state executives…its terror, blackmail, illegal arrest of legislators and citizens, and wholesome destabilization of the machinery of renitent states, not to mention its tendentious “corruption advisories” to political parties. In this it cooperated with other corrupt organs such as INEC and the police (Oyovbarie, 2008:258).

 

The EFCC, since its establishment in 2003 has witnessed changes in its leadership in tune with national political changes. With each change, the EFCC was face with one or another form of allegation relating to operations. According to Iyare (2008:46) the EFCC under Nuhu Ribadu, became a Frankenstein monster of sorts by employing the tactics of intimidation, harassment, virtual infraction of democratic rights of the citizenry and laying siege to courts in the attempt to carry out its work. The unceremonious exist saw the appointment of Farida Waziri head of the EFCC. In her case, it was alleged that the EFCC’s anti-corruption work had grown timid and lethargic While actual records may vindicate her, Nigerians are however not contented with cases filed in court, they are eager to read of convictions of prominent figures (Tribune, Friday, 25 November 2011).  The criticism of the performance of the EFCC under Lamurde, is by far weightier, it has been observed that

For an agency that has become synonymous over the years with egregious actions against the rampaging force of corruption, going for months without a single arrest in a society where corruption is believed to stalk the corridors of government offices and the private suites may be a bit unusual. To be candid, the EFCC has been apathetic and seemingly unengaging, to say the least.  Indeed for the casual observer, watching the seemingly indifference that beclouds the anti-corruption agency could lead one to assume that corruption of all forms may have taken a sabbatical from the country (Vanguard, 4th March, 2012).

 

It is obvious to a strong advocate of the EFCC to loss his/her voice in defence of the Commission in the face of the glaring evidence that throughout the Obasnajo, Yar’ Adua and Jonathan administration the organization was widely accused of selective prosecution of the president’s political enemies (Almond, et. al., 2012:672). This allegation against the EFCC during Obasanjo regimes is aptly captured by this question

why should Obasanjo’s anti-corruption be so selective and at best, piece-meal? Obasanjo knows that virtually all the state governors are engaged in treasury looting, but in his own world of anti-corruption campaign you are not a thief until you cross path with the lord of the manor (Ganago, 2006 in Folarin, 2009:15).

 

The above description coupled with EFCC’s campaign for the use of plea bargain rather than following laid down due process of litigation in resolving corruption cases, calls to question the capacity of the commission to effectively combat corruption. This fear, thus bring to the fore, the ever-present vexing and troubling concern which borders on the institutional efficacy of the EFCC at combating economic and financial crimes in Nigeria. Given this unsavory scenario, the question then is, has the EFCC become another sign-post of institutional ineffectiveness. This question is coming against the heels of the presumed public perception that the EFCC has lost focus in the fight against economic and financial crimes. These fears are real considering the manner at which most accused have been able to escape retribution for the economic and financial crimes they have committed. This has intensified public misprision and fears to the extent that it is believed that the EFCC has not been effective at controlling (Olu-Adeyemi and Obamuyi, 2010:125) economic and financial crimes. Much more so, it is strongly held that after a decade of the so-called war on corruption the P.D.P-led federal government has failed to walk through the corruption morass.

It is in the light of public outcry from most sections of the Nigerian society of EFCC’s ineffectiveness to combat economic and financial crimes that this assessment became relevant. As a result, this thesis raises the following questions for possible answers;

  1. Have EFCC’s internal procedures bolstered its competence to combat economic and financial crimes in Nigeria from 2003-2012?
  2. Have EFCC’s human resources facilitated its competence to combat economic and financial crimes in Nigeria from 2003 to 2012?
  • Have EFCC’s external environment facilitated or undermined its competence to combat economic and financial crimes from 2003-2012?

1.3 Objectives of the Study:

The general objective of this work is to assess EFCC’s organizational effectiveness at combating corruption in Nigeria from 2003 to 2012. Other specific objectives are to:

  1. Determine if EFCC’s internal procedures have bolstered its organizational competence to combat economic and financial crimes in Nigeria from 2003-2012.
  2. Ascertain if EFCC’s human resources have enhanced its organizational competence to combat economic and financial crimes in Nigeria from 2003 to 2012.
  • Assess if EFCC’s external environment have facilitated or inhibited her organizational competence in combat economic and financial crimes in Nigeria from 2003 to 2012.

1.4 Significance of the Study:

This work is theoretically important to academics, policy analyst, and students in that this discussion raises awareness of the need for a less complex but broad based view of evaluating organizational effectiveness which combines the process approach, resources configuration and goal approach so as to have a true and clearer picture of the state of the organization. This is important because of the growing concern for an illuminating generic way of viewing the organization that will not mask the fact that there are indeed, divergent views and aspects of organizational effectiveness (Baker and Branch, 2002:7). Given this backdrop, this thesis will theoretically contribute to the vista of knowledge. Such contribution is likely to also draw attention to the value of utilizing the three main measures of organizational effectiveness which are-internal process, system resource, and goal approaches. These are vital criteria for evaluating the organizational efficacy of public institutions. Without this kind of assessment using the three parameters, any action in form of policy decision will not only reflect personal bias but lead to a faulty action that will not be of any benefit to the organization nor the government as well as the people that organization is supposed to serve.

Practically, this study is important because it isolated and specified the relationship between the various variables that facilitate the organizational effectiveness of the EFCC. By so doing, it has provided management practitioner with the tool kit and the roadmap for configuring their internal processes so as to improve their organizational effectiveness. This is a necessary step for overcoming the problem of organizational decline and decay that characterize most public institutions in Nigeria. This kind of area-specific study (that is, in-depth examination of a particular aspect of an institution or organization) therefore goes a step further to identify those elements and examine how their adoption and utilization by the EFCC and other related public organization will combine to strengthen their capacity to effectively combat economic and financial crimes in Nigeria.

This area-specific study will provide organizational evaluators with a valuable lens for assessing the internal health and functioning of the EFCC. The practical importance of this study lies in the fact that any effort to rightly gauge EFCC organizational effectiveness must be based on an area-specific study such as this; which in this case, is fixed to EFCC’s internal process, system resources and goal attainment. The derived knowledge from this kind of area-specific assessment should help the management the EFCC to discover ways that they can improve their system-wide capabilities and also use such knowledge to optimize the use of her resources thereby enhancing the functionality of the organization.

There are strong contrary opinions in some quarters that the Commission is ineffective in the performance of her responsibility. This has had a negative impact on the public’s perception of the organization. Obviously, it is easy to regurgitate un-researched and unproven biases in opinions. Evidently, such unproven biases often result in the wrong view, and in extreme cases, result in the possible scrapping of an important public institution. Where such occurs, the consequences are not only grievous but such action by the government further complicate the tensed policy inconsistency concerns that had characterized governance in Nigeria. To avoid this kind of outcomes, it is expedient for the government to base its action on reliable data generated from a thorough research.

Viewed in this light, this study is of practical importance in that it provides the hard and reliable evidence that will help to correctly define both the people and the government perception of the true state and functionality of their public organization so that seasoned corrective policy measures (by the government) can be taken. In this regard, this study is of immense benefit given that it will assist the government to take informed decision on the continuity and support needed to be given to her public organizations especially, one that is tasked with the very difficult responsibility of combating economic and financial crimes like the EFCC. Such information will aid the government to reduce the prevailing policy inconsistency responsible for the unceremonial scrapping of its institution at the slightest public criticism.

Aside from dissolving unfounded misgivings about a public organization’s performance, an area-specific study relating to organizational effectiveness is of practical importance as it will assist the Commission to identify its specific weaknesses. This understanding will help the Commission to take proactive measures to correct them; thereby strengthening its capacity to overcome not just those problems but also to enhance its capacity to overcome other challenges that are likely to be posed by the Commission’s external environment which are likely to undermine her effectiveness in meeting her set objectives (goal).

1.5 Scope and Limitations of the Study:

Scope: The scope of this research is to assess organizational effectiveness of the EFCC to combat economic and financial crimes in Nigeria. The time frame for this study is from 2003-2012. This long study period was chosen because the prosecution of economic and financial crimes involves a lot of processes from investigation to actual trial and sentencing, that is, if the accused is found guilty or acquittal, if he/she is found not to have committed the said offence(s). These processes could drag for at least a period of three months to as long as several years depending on the nature and intricacies associated with the case. Since, any right assessment involves outcomes (goal attainment), it is important to take a long study period that will permit the researcher to evaluate objectively, if the organization has been achieving its goal as prescribed by its mandate. This reason informed the choice of this nine (9) years study period. It is therefore the researcher’s belief that a nine (9) year period is adequate enough to guarantee an objective assessment of the organizational effectiveness of the EFCC that is valid and generalizable.

Limitations: considering the nature of the responsibility that EFCC is saddled with, it presupposes that the organization has a paramilitary as well as a security character; one requiring the organization to constantly relate with the various courts in the determination of corruption cases levelled against accused persons. This means that some of the documents needed for this thesis might be classified as top secret and not to be accessed by any person beside the court until such cases are disposed of by the court. By this restriction, the possibility of not allowing researcher to have access to some of the relevant documents that will strengthen the potency of this study is obvious. This is premised on the fact that divulging those data to researcher and discussing them on the public arena may amount to contempt of court procedures; this will not be condoned by the court. This limitation has the capacity to in a way inhibit the potency of this work.

Due to the sensitive nature of issues which corruption generates in Nigeria, most civil servants may be apprehensive about the true intent of this research, hence, may well likely decline to divulge to us some of the requisite data to strengthen this research work. However, by obtaining a letter of introduction from the department and also, the researcher’s promise to abide by the ethics of research reporting helped to significantly allay the fears of some of our respondents. By this promise, the researcher was able to convince our respondents to provide the right information. It is the researcher’s belief that the right individuals were the ones who made available, relevant data that the researcher used to arrive at the valuable outcome of this research.

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