Dr. Ngozi Okonjo-Iweala, a former Vice-President of the World Bank and the current Minister of Finance in the Federal Republic of Nigeria, has denied being a defacto prime minister in the oil-producing West African state. She has been criticized recently., a photo by Pan-African News Wire File Photos on Flickr.
Failing economy: Need for whistle blowers, change agents .
Wednesday, 27 June 2012 00:00 BUKKY OLAJIDE Business Services
Nigerian Guardian
Wanted: A “street army” of fiscal enthusiasts ready and willing to engage the fiscal system. BUKKY OLAJIDE examines the effort of the Citizens Wealth Forum to raise awareness and sensitise core stakeholders on topical issues in fiscal responsibility so that they can become change agents for the enthronement of sound, pro-poor fiscal governance practices at all levels of government in Nigeria.
AN identified major drawback to Nigeria’s economic development is the overbearing influence of “human perilous pests”, who, under the guise of being political leaders, are lootimng the treasury with impunity, under observed confidence that no sanctions would be visited on them.
These high profile treasury looters feel that there are no social sanctions and mechanisms to bring corrupt and derelict public officials to book, except the decadent judicial system, which has failed in the discharge of its obligations to guarantee justice according to the law.
The establishment of the Citizens Wealth Platform is a step in the direction of harnessing the disparate energies of civil society into a momentum to address the challenges militating against sound fiscal governance.
Recently, a forum tagged the Fiscal Responsibility Forum for the South South Geopolitical Zone was convened by Centre for Social Justice (‘CSJ’) with the support of the Ford Foundation. Participation was drawn from Civil Society Organisations including non-governmental organisations, professional associations, academia, faith based and community based organisations, the media and the Fiscal Responsibility Commission. Over 150 organisations attended the Forum.
The Forum discussed key challenges of the 2012 federal budget; popular strategies and processes for achieving fiscal results; budget implementation and public procurement best practices. It further discussed the Medium Term Expenditure Framework (“MTEF”); budget formulation and design processes in the executive and legislature and the gamut of the provisions of the Fiscal Responsibility Act.
It finally reviewed the Federal Capital Budget Pull-out for the South South Zone.
Now, the Forum observed that the Federal Budget 2012 is loaded with so many illegal, immoral and unbecoming votes that have no place in appropriations of a civilized society.
That is, the resources dedicated to security votes, welfare packages, refreshment and meals, spectacles and other frivolities are clear evidence of the insensitivity of elected and appointed officials.
The Forum therefore called on Civil Society Organisations to organise and mobilise to proactively set the agenda for fiscal governance and where there is the need to react to official government policies; CSOs should provide effective alternative frameworks and ideas for social change.
According to the Group, CSOs should act timely and set the agenda for the next Medium Term Expenditure Framework and the 2013 federal budget, which should be commencing soon at the Federal Ministry of Finance.
The Forum affirmed and proclaimed to all Nigerians that there is a fundamental right and duty to resist tyranny, corruption and bad governance. Civil Society organisations should therefore utilise the fundamental rights and freedoms entrenched in the Constitution, the African Charter on Human and Peoples Rights and other national and
international standards to resist fiscal tyranny, oppression and subjugation of Nigerians.
A communique issued at the end of the event stated that civil society organisations should devise and provide effective sanction mechanisms beyond the ineffective judicial machinery that has failed Nigerians. For example, a National Book of Shame – some form of Black Book can be opened for corrupt officials and those who misappropriate, misallocate and mismanage national resources or who have contributed greatly to the economic adversity of Nigeria.
They agreed that:
• CSOs should coalesce and join the Citizens Wealth Platform and make it more effective as a tool to engage fiscal governance at all levels of government.
• Considering the premises of the FRA, stakeholders should demand enhanced transparency, accountability and popular participation from the fiscal authorities. If entreaties fail to yield results, resort should be made to the provisions of Section 51 for the enforcement of rights and duties.
• The South South Capital Budget Pull-out should be used to monitor, track and report on the 2012 federal budget and use the result of monitoring for effective advocacy for fiscal change.
• CSOs should make full and effective use of the provisions of the Freedom of Information Act to enhance fiscal transparency.
Meanwhile, the Forum observed The Fiscal Responsibility Act (“FRA”) is premised on the need for enhanced transparency, accountability and popular participation of
citizens in the fiscal operations of government. Specifically Section 48 of the Act indicates the clear intendment of the FRA thus:
• The Federal Government shall ensure that its fiscal and financial affairs are conducted in a transparent manner and accordingly ensure full and timely disclosure and wide publication of all transactions and decisions involving public revenues and expenditures and their implications for its finances.
The FRA also has an added potency in that it has a revolutionary provision that grants individuals unhindered access and locus standi to enforce compliance through the Citizens’ Rights Action in Section 51, which provides thus:
• A person shall have legal capacity to enforce the provisions of this Act by obtaining prerogative orders or other remedies at the Federal High Court, without having to show any special and particular interest.
The above provisions of the FRA are further reinforced by the access to information provisions of the Freedom of Information Act.
Unfortunately, both the provisions of the FRA and the Freedom of Information Act have been under-utilised.
The South South Capital Budget Pull-out is an invaluable tool for monitoring federal capital budgets in the zone.
Already, experts believe that the common perception that corruption in Nigeria or fraudulent behaviour is only endemic in the country’s public sector or in the corridors of power seems to be an oversimplification of the spread or dimension of corruption in the country. The frequent reported cases of fraud in Banks perpetrated by bank staff or fraud in companies executed by different cadres of company personnel are all examples of white collar crimes or fraud.
It would be recalled that in the last decade or so executive white collar malpractices bordering on false financial reporting led to the exit of late Rufus Giwa and Bunmi Oni both CEOs of Lever Brothers Nigeria PLC and Cadbury Nigeria PlC respectively.
Remarkably, the recent sack of the management of five banks by the Central Bank Governor over actions deemed detrimental to the interests of depositors and creditors brings to fore once again the incidence of white collar fraud, crimes and malpractices in Nigeria’s private sector. It is apparent that Nigeria’s private sector is not immune to corruption.
The incidence of theft or corruption in the workplace has become a major issue facing many advanced economies as corporate crimes have in recent times rocked certain western economies. The widely reported corporate scandals that affected Enron, WorldCom and Tyco are typical cases of white collar crimes.
As at 2005, it was estimated that the total cost of employee fraud or white collar crimes to public companies in the United Kingdom was up to 2 billion British Pounds. While in the case of the United States, a 2006 report of the Association of Certified Fraud Examiners estimated that more than $600 billion is lost through white collar crimes.
Though the paucity or near absence of related statistics in Nigeria may not permit any similar estimate, the significant incidence of official corruption in Nigeria’s private sector cannot be disregarded especially when it affects public companies driven by investors funds and banks holding depositors funds.
Beyond the recent sporadic and ad hoc responses of the Central Bank of Nigeria and the Economic and Financial Crimes Commission to the current non-performing loan debacle in the banking sector, it is necessary that laws or policies meant to alert or forestall white collar misdemeanour or crimes are created and implemented. One method of forestalling such official malpractice is the adoption of a Whistle blowing policy- as a fundamental ingredient of a sound corporate governance practice by public companies in the country.
Whistle blowing which is regarded as the “reporting of wrongdoing within an organization to internal and external parties” has attracted legislative attention following the rising incidence of corporate scandals in western economies. Following the False Claims Act of 1863, the Whistle blowing Act of 1989 and its amendment in 1994, the United States of America enacted in 2002 the Sarbanes-Oxley Act which provides for a mandatory confidential anonymous whistleblower hotline to be made available for use by company staff. Four years earlier, in the UK the Public Interest Disclosure Act was enacted. In Australia, in 2001 the Whistleblowing protection Act was enacted.
Nigeria has had its own fair share of white collar crimes that by now the relevant regulatory authorities should be considering ways of creating a system whereby whistle blowing can thrive, effectively using the process to alert internal and external authorities of wrongdoing in a company before it leads to bankruptcy, insolvency or liquidation with attendant widespread economic implications.
Specifically, if there were whistleblowers- staff who had insider knowledge and were willing to reveal- may be the unhealthy banking practices that rocked the management of the five banks would have been open to the relevant agencies much earlier before the recent audit executed by the CBN. But, whistle blowing cannot thrive if the whistleblower is not guaranteed of protection or confidentiality.
More importantly, whistleblowing as a tool of corporate governance can only succeed in an environment where the process is clearly established. It is in this regard that the regulatory agencies like Securities and Exchange Commission, CBN, and Corporate Affairs Commission (CAC) and the EFCC should consider including provisions for whistleblowing in the codes of corporate governance and the relevant laws guiding the operations and conduct of public companies.
No comments:
Post a Comment