Has Buhari Meant Business:The Anti-Corruption Drive in Nigeria

President Muhammadu Buhari made combatting Boko Haram and corruption in Nigeria the pillars of his election campaign. This approach proved successful in garnering votes and since Buhari was inaugurated in May 2015, Nigeria and the business community have been waiting in anticipation for the president to tackle these great problems. Yet, close to a year down the line, both the Boko Haram insurgency and corruption remain prominent challenges in the country. 

On the corruption front, Buhari has made certain gains. These include suspending the boards of Nigeria’s parastatals, launching forensic audits for over 80 state agencies as well as revamping the Economic Financial Crimes Commission (EFCC), among others. Furthermore, a number of top officials have come under investigation since Buhari came to power, including former Nigerian Army colonel, Sambo Dasuki over the misappropriation of USD 2.1 billion in funds allocated to help combat Boko Haram, former Minister of Petroleum Resources, Diezani Alison-Madueke over money laundering allegations and Government Tompolo, a former militant-turned-security provider in Nigeria’s Niger Delta region. In addition, Buhari is looking to reform the Nigerian National Petroleum Corporation (NNPC), having taken over the Petroleum Resources portfolio following the creation of his cabinet in November 2015. Many investors in the oil and gas sector eagerly anticipate the Petroleum Industry Bill which seeks to separate the commercial and regulatory functions of the NPPC. Yet, with the Bill already ten years old, an imminent ratification appears unlikely. 

Thus far, the impact of the anti-corruption campaign remains confined to the oil and gas sector. This has been exacerbated by March 2016 findings that the NNPC failed to pay over USD 16 billion in oil revenues to the government in 2014. With the focus on the NNPC, greater scrutiny is likely to be applied to fuel trader activities and oil-for-product swap agreements. Businesses in these sectors will need to be as vigilant as ever of their partners going forward, as well-connected individuals are likely to be targeted for future investigations. 

Buhari’s campaign against high-level corruption in state and state-owned institutions is laudable. However, it has created significant uncertainties for businesses. Further, combatting institutionalised corruption at lower levels will require much more long term restructuring, suggesting prolonged commercial challenges for investors.