Impact Of EFCC And ICPC On Public Service Accountability

Project and Seminar Material for Accountancy / Accounting

Abstract

This research work emphasized on the Impact of Economic and Financial Crime Commission (EFCC) and Independent Corrupt Practice Commission (ICPC) on public device accountability. The unprecedented spate of Economic and Financial crime reached to the level when it became a source of worry to the government, the regulatory authorities, the bankers themselves and the general public. However, government did not maintain a sanctimonious aloofness to watch this ugly development. But the question is how far has the commission is how far has the commission performed in realizing the objective of their establishment in the Nigerian economy in restoring sanity within Nigeria economy. The objective of the study also include to evaluate the performance of economics and financial crimes commission in the Nigerian economy. The data collected for the study are through primary and secondary sources were analyzed using table and percentage from the analysis one, the following findings were made, that the activities of Economic and Financial Crime Commission (EFCC) and Independent Corrupt Practice Commission (ICPC) in the last nine (9) years has not significantly reduce the Economic and Financial Crime in Nigeria.

The researcher made several recommendation prominent among then includes.

That Economic and Financial Crime Commission (EFCC) and Independent Corrupt Practice Commission (ICPC) should operate independently to enable them achieve better results.
They should not be selective in their investigations and arrests.

Chapter One

Introduction

1.1 Background of the Study

In contemporary Nigeria, government has ultimately become inseparable from the day to day life of the citizens. This is because government is now involved in the overall social and economic development as against its traditional role of mere maintaining law and order. Unfortunately, there sources at the disposal of governments continue to dwindle, meaning that governments have to re order her priorities to meet the needs of the society.

The implication is that both the civil servants and the political office holders must cooperate to ensure the achievement of sustainable financial and economic development. They must be responsive to the yearnings and aspirations of the people and be held accountable for their actions and inactions.

However, for some times, the influence of the political appointees has made the civil servants to neglect the issue of accountability in the work place.

Fisher (2004), the World Development Report places accountability succinctly at the centre of public reform and public sector delivery Public accountability measures the degree to which the community can control (hold accountable) the behaviour of public agents through political institutions essentially, public accountability mainly regards matters in the public domain, such as the spending of public funds, the exercise of public authorities, or the conduct of public institutions.

Since its inception, EFCC and ICPC has taken the bull by the horns working tenaciously to achieving her organizational mission. Under the current leadership, it vigorously pursues its mandate of investigating cases earlier highlighted; the Commission has made concerted efforts in identifying, tracing and freezing, confiscating, or seizing proceeds derived from such illicit activities. EFCC and ICPC, from inception, has also played host to the Nigerian Financial Intelligence Unit (NFIU), vested with the responsibility of collecting suspicious transactions reports (STRs) from financial and designated non-financial institutions, analyzing and disseminating them to all relevant government agencies and other FIUs all over the world. So far, the Commission has been able to and still recording successes in several areas of its mandate. Among others, it has recorded several convictions on corruption, money laundering, oil pipeline vandalism and related offences. Assets and money worth over $11 billion have been recovered from corrupt officials and their cohorts. The Commission is tenacious with over 65 high profile cases at advanced stages of prosecution in several courts in Nigeria and over 1500 other cases in court and secured over 600 convictions.

Variety of scholars opined that, EFCC’s and ICPC performance has not addressed the problems for which it was founded. Thus, the researcher attribute this poor performance of the EFCC and ICPC to certain environmental conditions which influence their performance in terms of accomplishing its statutory mandate in reducing the rate of political corruption in Nigeria. Such environmental conditions that impede and ICPC EFCC’s performance include Dual legitimacy of criminality and the irony or paradox of fighting corruption by corrupt individuals. It is assumed that one does not make laws against his own will. Unless these environmental conditions change, EFCC and ICPC performance will not change from what it is at present.

Generally, the goals of all public accountability measures are to guarantee that public money is spent most judiciously to ensure that the public actually benefits from public finance. There are many dimensions of accountability found in literature. For instance, a distinction can be found between accountability and transparency and between accountability and responsive-ness and participation.

According to Dukor (2006), Accountability and controllability may be equated, since an agent is accountable to a principal if the principal can exercise control over the agent. Whatever the dimension from which accountability is seen, the importance is in forcing administrators to trace connections between the past, present and future.

1.2 Statement of the Problem

According to Okonjo (2007), Corruption is pandemic in Nigeria and it has certainly emerged as the major impediment to the development of democracy and the national economy. The scourge has grown to become a way of life of both the governor and the governed as it pervades all sectors of the state. A politician that ‘succeeds’ at the polls sees any office he/ she occupies as a source of re-coupling his/her electoral expenses. Therefore, in most circumstances, public officers use their positions for private gains while long-term public interests are sacrificed.
According to Lipset and Lenz corruption is described as efforts to secure wealth or power through illegal means private gain at public expense; or a misuse of public power for private benefit.

It is a behavior, which violates rules against the exercise of certain types of [duties] for private [gains] – regarding influence. This definition includes such behavior as bribery (abuse of a person of trust) nepotism (bestowal of patronage by reason of ascribed relationship rather than merit) and misappropriation (illegal appropriation of public resources for private uses). Corrupt practices are so common and pervading in the Nigeria’s public sector to an extent that citizens find it difficult to develop an alternative to deal with it. Corruption is probably the main means to accumulate quick wealth in Nigeria.

According to Na Abba (2003) corruption occurs in many forms, and it has contributed immensely to the poverty and misery of a large segment of the Nigerian population.

Na Abba said there are three reasons why corruption thrives in Nigeria:

Corrupt leadership lacked the desire and ability to change the moral tone of the country.
Government domination of the economic sphere significantly enhances opportunities and ability to seek rents. And
Civil society accepts or tolerate corruption.

It is now about four years since your administration embarked upon its anti-corruption crusade. Nevertheless, I regret to observe that the campaign has not yielded the desired result because it lacked focus and strong foundational into. In any case, the most preposterous and incredulous aspect of your anti-corruption campaign is that while the media is awash with stories on the activities of Economic and Financial Crime Commission (EFCC) and Independent Corrupt Practice Commission (ICPC) is taking root daily in many federal establishments, also rock inclusive. I have said it several times that corruption is rife among senior officials of government, especially those at the federal level. It is said that a few members of the leadership of the Senate could stoop so low as to drop your name with active connivance of some of your aides to collect large sums in oil and defense contract commissions.

The ignominious activities of this cabal, including the foreign accounts of some of your aides, serving and former ministers, are also well known to the international community. I would be surprised if you feign ignorance of this unfortunate situation.

The truth of the matter is that the entire Nigerian political process is hampered by corruption.

This also means that accountability has not been rooted in the Nigerian public sector.

According to Bello (2009), despite the activities of the independent corrupt practice commission (ICPC) Economic and financial crime commission (EFCC) corruption seems to be on the increase. Most times, political appointees see public offices as an avenue to siphon public funds for private ends in spite of the jumbo salaries awarded to themselves by the public officers.

1.3 Object of the Study

The objective of this research work is to:

Find out The impact of Economic and financial crime commission (EFCC) and Independent corrupt practices commission (ICPC) on public sector accountability.
Determine How Economic and financial crime commission (EFCC) and Independent corrupt practices commission (ICPC) has helped in eradicating fraud and other irregularities in public sector.
To identify the root of cause of corruption in Nigerian public sector.

1.4 Research Questions

The following research question were formulated by the researcher:

Does the dual legitimacy of criminality influence the performance of EFCC and ICPC in fighting political corruption in Nigeria?
Has the EFCC and ICPC accomplished its statutory mandate in terms of reducing the rate of political corruption in Nigeria?
What are the contributions of EFCC and ICPC in detecting and controlling fraud in Nigeria?
To what extent has the concept of accountability be embedded in public sectors?
Has the introduction of the anti-corrupt agencies had any impact on corrupt practices in Nigeria?
Can the conspiratorial roles of the public appointees and civil servants be checkmated by the agencies?

1.5 Significance of the Study

The study is significant for the following:

Students:

This study will serve as a foundation for further research on this topic to students in the school for financial studies.

Financial House:

This study will be of great important to financial house wishing to improve on their standard of operation. It will assist them in their system of internal control and so help to check fraud.

Government:

This study will help to highlight the causes of corruption and misappropriation of property and funds in public establishments and provide suggestion to stop the practice. Other includes banks, professional’s bodies and infact the general public.

1.6 Scope and Limitation of the Study

The area of this research work is Enugu metropolis with particular reference to some selected banks.It embraces their operations both in the public and private sectors with the aim of improving financial efficiency and reducing corruption. Some of the limitations of this research work are:

Insufficient Financial:

The researcher needed a lot of money for transportation to collect the necessary data for the study. Money was also required to visit secondary data sources such as the internet, libraries, professional bodies, and so on.

Lack of Co-Operation:

The unco-operative attitudes of many government officials were not encouraging.

Some of them were so biased and prejudiced that did not care to understand the purpose of the research. This resulted to their failure to provide sufficient information required for proper completion of the study.

Time Pressure:

Time allowed was not enough for through completion of this research, in consideration of the fact that i was also facing other academic studies during the semester.

1.7 Definition of Terms

Accountability:

In ethics and governance, accountability is answerability, blameworthiness, liability, and the expectation of account-giving. As an aspect of governance, it has been central to discussions related to problems in the public sector, nonprofit and private (corporate) and individual contexts.

Fraud:

The crime of deceiving somebody in order to collect money or goods illegally. It also means a person who pretends to have qualities and abilities, skills etc. that he or she does not really have to deceive others. It is an acronym for Nigeria Financial intelligent unit. It is an autonomous central national agency, domiciled within EFCC with responsibility of receiving and analyzing financial information.

Investigation:

This means a special kind of examination of accounts or records carried on by an investigator with the predefined purpose according to the necessity of the situation (ChikeNwoha 2003:33).

Nigeria:

Nigeria, is a federal republic in West Africa, bordering Benin in the west, Chad and Cameroon in the east, and Niger in the north. Its coast in the south lies on the Gulf of Guinea in the Atlantic Ocean. It comprises 36 states and the Federal Capital Territory, where the capital, Abuja is located. Nigeria is officially a democratic secular country.

EFCC:

The Economic and Financial Crimes Commission (EFCC) is a Nigerian law enforcement agency that investigates financial crimes such as advance fee fraud (419 fraud) and money laundering. The EFCC was established in 2003, partially in response to pressure from the Financial Action Task Force on Money Laundering (FATF), which named Nigeria as one of 23 countries non-cooperative in the international community’s efforts to fight money laundering.[1] The agency has its head office in Abuja.

ICPC:

The Independent Corrupt Practices Commission (ICPC), (in full the Independent Corrupt Practices and Other Related Offences Commission) is a Nigerian agency that was inaugurated on 29 September 2000 following the recommendation of President Olusegun Obasanjo. The mandate is to receive and investigate reports of corruption and in appropriate cases prosecute the offender[s], to examine, review and enforce the correction of corruption prone systems and procedures of public bodies, with a view to eliminating corruption in public life, and to educate and enlighten the public on and against corruption and related offences with a view to enlisting and fostering public support for the fight against corruption.[1] The Corrupt Practices and other Related Offences Act 2000 governs the committee’s activities

1.8 History of Economic and Financial Crimes Commission (EFCC)

The historical background to the existence of the Economic and Financial Crimes Commission derives from the recognition from the late 1980’s of the need to create a special interventionist agency to investigate economic and financial crimes. At that time, the menace of Advance fee Fraud, with its negative impact on Nigeria had been recognised. At the same time, it was recognised that the sophistication of economic crimes were such that there might be the need for a special Commission to handle its investigation and prosecution as opposed to the regular law enforcement agencies. By 2002, Nigeria found its way in the Financial Action Task Force’s list of Non-Cooperative Countries and one of the conditions for being taken off that list was compliance with Recommendation 26 of the FATF’s then 49 recommendations, which required the creation of a Financial Intelligence Unit. Consequently, the EFCC was created in 2002 and Nigeria’s Financial intelligence Unit domiciled therewith. The Statute creating the EFCC was first enacted in 2002 and subsequently re-enacted in 2004. The EFCC started operations in 2003.

The Statute creating the EFCC vested it with the mandate to:

Investigate and prosecute economic and Financial Crimes. Section 47 of the enabling acts sets out financial crimes to cover several issues such as bank frauds, tax evasion, capital market fraud, futures market frauds, etc.
Be the national coordinator for anti-money laundering.
Be the designated Nigerian Financial Intelligence Unit.
Implement the provisions of the Advance Fee Fraud Act, Failed Banks Decree, Money Laundering Act and the Banks and other Financial Institutions Decree.

From a practical point of view, the EFCC sees its mandate as the provision of financial security for the Nigerian economy. It implements the mandate through tackling those menaces such as official corruption, tax evasion, bank fraud, Advance fee fraud, illegal bunkering and several other shades of economic crimes that can distort key economic indices and inhibit growth. It also seeks to create a level playing field for all stakeholders within the Economy.

1.9 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study.
Chapter two highlight the theoretical framework on which the study is based, thus the review of related literature.
Chapter three deals on the research design and methodology adopted in the study.
Chapter four concentrate on the data collection and analysis and presentation of finding.
Chapter five gives summary, conclusion, and recommendations made of the study.

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is pertinent to note that this research was aimed at addressing the issues relating to fraud and money theft in respect to the efforts of the financial crime agencies are putting in to stop this ill acts in Nigeria, thus the topic “impact of EFCC and ICPC on public service accountability”.

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges associated fraud, bribery and corruption in Nigeria.

5.2 Summary

It has been observed that the characters of the society also help to inhibit the effectiveness and efficiency of the commission in pursuit of its mandate. Thus in assessing the success and achievements of EFCC and ICPC since success and failure which are not in equilibrium. This means that the level of failure recorded has yet outweighs the amount of success achieved so far in this present president Bihari’s regime.

From my findings it was also discovered that the present officials of EFCC and ICPC do show enough commitment to their duty. Unlike before where it was obvious that some people engaged in dubious activities and make wealth from these acts, the staff of the EFCC and ICPC now quickly swing to action with their personal preferences and values.

This new steps does augur well for fight against corruption in Nigeria as compared to the Obasanjo’s regime.
In analyzing the data, it was discovered that leadership failure leads to increase in economic and financial crimes. And economic and financial crimes have an advert consequences on the economy of Nigeria.

Although Nigeria from onset has one of the most corrupt system in the world which was the major reason, Obasanjo’s regime instituted an anti-corruption campaign with its coming to power in 1999. The government gave legal backing to that through an anti-corruption act and the establishment of EFCC and ICPC as an agency vested with powers to investigate and arraign those indicated over corruption and financial crimes before courts of law. But the success recorded by EFCC and ICPC so far since president Buhari took over is enough to say that the commission has succeeded in its mandate of fighting corruption in Nigeria to a great level.

It’s apparent that the act of establishing and supporting EFCC and ICPC is capable of curbing corruption in Nigeria although the administration that established the institution was not corrupt free. The researcher finally summarized that there is a way the operations of the EFCC and ICPC could have any credibility in every situation if only those who should have been their prime targets are not being shielded from prosecution by corrupt officials.

This is to say that EFCC and ICPC act could be suitable enough in combating corruption in Nigeria because reals essence of establishing the anti-corruption programme was to be credible and effective. Before now, the EFCC and ICPC activities in combating corruption in Nigeria did not succeed because the anti-corruption law was at variance with the deep rooted corruption in Nigeria political economy.

5.3 Conclusion

Corruption is an aged national phenomenon which grossly hampers the country’s development. It frustrates the planning processes, distorts the socio-psychological disposition of the nation’s political leadership and instigates all manner of crisis and instability in the nation’s political life. It destroys the nation’s development fabrics such as the bureaucracy and the political leadership through pervasion of their psychological. This study shows that the effective prosecution of financial criminals have being hindered by some factors that are embedded in Nigerian constitution and procedural laws. These factors usually handicapped the EFCC and ICPC from carry out their objectives. From the findings of this study, it could be concluded that corruption contributes directly to underdevelopment, and an underdeveloped country provides a festering ground for corruption.

In analyzing the data, it was discovered that leadership failure leads to increase in economic and financial crimes. And economic and financial crimes have an advert consequences on the economy of Nigeria.

In the course of the analysis, we discovered different forms have taken and how the money which would have been used for meaningful projects in Nigeria has been looted thereby deteriorating the underdevelopment situation in Nigeria. Despite the EFCC and ICPC’s efforts at curbing corruption there is still a strong hold of corruption in Nigerian political domain. Although EFCC and ICPC has recovered some looted money and property from corrupt individuals but this has not reduced the rate of corruption in Nigeria. In some cases, the recovered money and assets are being diverted to private use therefore the Impact of EFCC and ICPC is not being felt as compared to its inception period.

Finally it was observed that the effective prosecution of financial criminals have being hindered by some factors that are embedded in Nigerian constitution and procedural laws. These have handicapped the EFCC and ICPC from carry out their objectives.

5.4 Recommendations

The study justify the prevalence of poor accountability and violation of the corporate governance ethics in the public and private sector organizations in Nigeria, the following recommendations are therefore brought forward:

The Executive Arm of government in conjunction with the legislatures need to come up with workable framework for harmonizing and strengthening the role of ICPC and EFCC in order to forestall recklessness and abuse of the principles of accountability and corporate governance in public and private sector organisations in Nigeria.
Public and private sector should be enjoined to take a closer look at their financial operations and as a matter of policy decline to provide tolerant environments for corrupt financial dealings. The EFCC, ICPC and other organizations saddled with the task of eradicating corruption in Nigeria should earnestly beam their searchlights on political office-holders, executive directors, banks et cetera being possible conduit pipes for corrupt financial flows.
Accountants in both public and private sector specifically should be compelled by ICAN and ANAN to always act in accordance with professional ethics of Accountancy, extant laws and ethical standards.
EFCC and ICPC should strengthen its vigilance and monitoring mechanisms all over the nation’s ministries, commissions, private sector organizations, banking and financial industry, universities etc.
One of the reasons for poor accountability and corporate governance is inadequate training on policy implementation for accountants, managers and chief executive officers. There is therefore the need to close the knowledge-gap of organization’s workforce through regular training, seminars and workshops on principles of accountability and corporate governance ethics.