the contributions of efcc in promoting financial...
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THE CONTRIBUTIONS OF EFCC IN PROMOTING FINANCIAL
ACCOUNTABILITY AND TRANSPARENCY IN NIGERIA
NZEJEKWU IFEYINWA ANENE PG/MBA/09/53825
DEPARTMENT OF ACCOUNTANCY FACULTY OF BUSINESS ADMINISTRATION
UNIVERSITY OF NIGERIA ENUGU CAMPUS
JUNE, 2011
THE CONTRIBUTIONS OF EFCC IN PROMOTING FINANCIAL ACCOUNTABILITY AND TRANSPARENCY IN NIGERIA
NZEJEKWU IFEYINWA ANENE PG/MBA/09/53825
DEPARTMENT OF ACCOUNTANCY FACULTY OF BUSINESS ADMINISTRATION
UNIVERSITY OF NIGERIA ENUGU CAMPUS
IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF MASTERS DEGREE IN BUSINESS
ADMINISTRATION (MBA)
SUPERVISOR: DR. (MRS.) R.G. OKAFOR
JUNE, 2011
TITLE PAGE
THE CONTRIBUTIONS OF EFCC IN PROMOTING FINANCIAL
ACCOUNTABILITY AND TRANSPARENCY IN NIGERIA
CERTIFICATION
This is certify that I Nzejekwu Ifeyinwa Anene a post
graduate student in the Department of Accountancy with
Registration Number PG/MBA/09/53825 has satisfactorily
completed the project research in partial fulfillment of the
requirement for the award of Masters Degree in Business
Administration (MBA) in the Faculty of Business
Administration, University of Nigeria, Enugu Campus.
…………………………… ……………………. NZEJEKWU IFEYINWA ANENE DATE
APPROVAL PAGE
This project has been approved for the Department of
Accountancy, Faculty of Business Administration, University of
Nigeria, Enugu Campus.
………………….. ………. …………………… DR. (MRS.) R.G. OKAFOR DATE (PROJECT SUPERVISOR)
………………………….. ……………………. MR. R.O. UGWOKE DATE (HEAD OF DEPARTMENT)
DEDICATION
I dedicate this work to Almighty God, my lovely husband
Mr. Basil Nzejekwu and my lovely children.
ACKNOWLEDGMENTS
My profound gratitude goes to ALMIGHTY GOD for His
direction and providence to have come this far.
I am also grateful to DR. (Mrs.) R.G. Okafor whose ideas
and interaction guided my intellectual development.
I acknowledge the contribution of my husband, my MBA
Lecturers and my fellow MBA students and my co-workers for
their immense support and encouragement.
ABSTRACT Several years of military misrule and mismanagement had weakened the economic management processes and institutions in Nigeria. There was no transparency and accountability in government (Public Sector) and private sectors and Nigeria became notorious for endemic corruption. The result was the inability of government to deliver services to the Nigeria public. Most private companies both in the oil and non-oil sector have constantly evade taxes and have collide with officials to evade custom duties and payment of taxes. In addition, widespread perpetration of economic and financial crimes like advance fee fraud (419), money laundering, cyber crime, banking fraud and endemic corruption have had severe negative consequences on Nigeria, including decreased direct foreign investment in the country. Consequently, the Economic and Financial Crimes Commission (EFCC) was established as one of the mechanisms for the prevention, investigation and prosecution of corrupt practices and economic and financial crimes in the public and the private sector. Finally, this research work is aimed at looking into the various contributions of the Economic and Financial Crimes Commission (EFCC) in promoting financial accountability and transparency. To achieve this aim five research questions were developed. The study adopted the survey research approach using the three study areas. The EFCC Lagos, EFCC Enugu and PHCN formed the population of the study. A sample size of 55 was choosing using Taro Yamane’s model while simple random techniques was used to select the sample. Data retrieved from 55 completed questionnaires were subsequently presented in tables while simple percentage were used to analyse and answer the research questions formulated to guide the research work. After the analysis of data, the hypotheses tested reviewed that the contributions of EFCC has effectively promoted financial accountability and transparency in Nigeria. Therefore, the researcher recommends the following: developing an intensified information technology, staff training, capacity building and health care fraud control.
TABLE OF CONTENTS
Title page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
Table of contents vi
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of the Problem 4
1.3 Objectives of the Study 6
1.4 Research Questions 7
1.5 Research Hypothesis 7
1.6 Significance of the Study 8
1.7 Scope of the Study 9
1.8 Limitations 9
1.9 Definition of Terms References 10
REFERENCES 12
CHAPTER TWO: REVIEW OF RELATED LITERATURE 13
2.1 Origin of Economic and Financial Crimes Commission 14
2.2 Powers of EFCC in Controlling Crimes 19
2.3 Matters on EFCC Investigate 22
2.4 Capital Market Fraud 23
2.5 EFCC and other Arms 34
2.6 Constraints faced by EFCC in curbing fraud in Nigeria 35
2.7 Achievements of EFCC References 41
CHAPTER THREE: RESEARCH METHODOLOGY 50
3.1 Research Design 52
3.2 Area of Research 53
3.3 Population and Sample Size 53
3.4 Research Instrument of Data Collection 56
3.5 Validation of Instrument 57
3.6 Method of Data Collection 57
3.7 Method of Data Analysis 58
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA
4.1 Data Presentation 60
4.2 Testing of Hypotheses 69
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.1 Summary of Findings 75
5.2 Conclusion 76
5.3 Recommendations 77
Bibliography 80
Appendix A 82
Appendix B 83
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Fraudulent activities, economic mismanagement,
corruption, lack of accountability and transparency have been
the bane of the economy. Fraud and criminality remained
elusive and therefore brought inefficiency in the system,
especially in the public sector.
This menace lead to the establishment of EFCC in 2002 by
an Act of the National Assembly which was later amended in
2004. It was borne out of the determination of the Federal
Government to root out corruption and sanitize the Nigerian
economic environment by enforcing all economic and financial
crimes laws.
The Act mandates the EFCC to combat financial and
economic crimes and the Commission is empowered to prevent,
investigate, prosecute and penalize economic and financial
crimes. Also, the EFCC is charged with and has been
investigating cases of abuse of office, diversion of public funds
through fraudulent award of contracts, tax fraud, illegal
bunkering, terrorism financing, capital market fraud, cyber
crime, banking fraud, etc.
With a mission to curb the menace of corruption that
constitutes the clog in the wheel of progress; protect national
and foreign investments in the country; imbue the spirit of hard
work in the citizenry and discourage the crave for ill-gotten
wealth; identify such ill-gotten wealth and confiscate them;
build an upright work force in both public and private sector of
the economy; and contribute to the global war against financial
crimes and terrorism financing; the advent of the EFCC has
impacted positively on Nigeria’s global acceptance being a
turning point in the country’s anti-corruption crusade.
Since its establishment, the EFCC has taken the bull by
the horns working tenaciously to fulfill its mandate. 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, 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.
Before then there were other provisions of Financial
Crimes Laws such as:
Money laundering amendment Acts 2003, No 7; 1995, No
The Advance fee fraud and other related offences Act 1995
as amended.
The failed Banks (Recovery of Debts) and financial
malpractices on Banks Acts 1994 as amended.
The Banks and other financial institution Act 1991 as
amended.
Miscellaneous offences Act 1983.
Any other law or regulations relating to economic and
financial crimes including the Criminal code and penal
code.
The commission is also designated to Nigerian financial
intelligent unit (NFIU). It is thus, substantial that our problem
is not the absence of legislation (Law) or the deficiencies in them
but the total neglect to enforce them have been the plight of
disaster,
1.2 STATEMENT OF THE PROBLEM
A nation where financial and economic crimes are endemic
cannot attain economic stability, growth and development.
According to Irving Kristol’s (2OO7), the problem is always far
more important than devising a solution, for he who can define
the problem has always exercised a large degree of intellectual
sovereignty over the range of possible solutions that must be
imagined
Nigeria being a country where corruption is pandemic has
been rated both domestically and internationally as a corrupt
nation. Public officials take huge bribes and the cost of public
goods and services are inflated, government often pays for non-
existent goods and services. Even when such corrupt practices
are exposed, it has always been played to the gallery and
sacrificed at the alter of backside bargaining. The corrupt
practices that have characterized and painted the nation black
include fraud, embezzlement, falsification of financial
information, obtaining by false pretence, lack of transparency
and accountability among others.
These evils have in no small measure negated economic
stability, growth and development in our country. Experience
has shown that both the public and private sectors have
continued to suffer inefficiency and ineptness and that growth
indices and graph are having a downward slope. This has
brought the pertinent question — are there adequate control
measures and checks to stem this ugly tide (corruption)?
Poor and insincere policy conception, formulation and
implementation on economic and financial crimes in Nigeria
have been responsible for the low achievement recorded in
curbing and stamping out economic and financial crimes in the
country. Hence, the emergence of the “Economic and financial
crimes commission to enhance financial accountability and
transparency in Nigeria.”
1.3 AIMS/OBJECTIVES OF THE STUDY
The major aim of this study is to assess the contributions
of EFCC in promoting financial accountability and transparency
in Nigeria. The objectives include:
1. To examine the responsibilities and functions of EFCC.
2. To carry out a comprehensive analysis on the
contributions of EFCC in detecting and controlling fraud
in Nigeria.
3. To examine how effective EFCC contributions benefited
Nigeria public and private sectors since her inception.
4. To examine the contributions of EFCC in enhancing
financial accountability and transparency.
5. To effectively examine the achievements and successes of
the commission.
1.4 RESEARCH QUESTIONS
1. What are the responsibilities and functions of EFCC?
2. What are the contributions of EFCC in detecting and
controlling fraud in Nigeria?
3. How effective EFCC contributions benefited Nigeria public
and private sector?
4. What are the contribution of EFCC in enhancing financial
accountability and transparency?
5. What are the achievements and successes of the
commission?
1.5 RESEARCH HYPOTHESES
Also in line with objectives and research questions are the
hypotheses of this study.
1. EFCC has no responsibilities and functions assigned for
her.
2. EFCC contributions cannot benefit the Nigeria public and
private sector.
3. There is no achievement and successes on the side of the
Commission.
4. The contributions of EFCC cannot enhance financial
accountability and transparency.
5. EFCC as a machinery cannot effectively detect and control
financial and economic irregularities in Nigeria.
1.6 SIGNIFICANT OF THE STUDY.
The research work will be useful and moreover be a source
of information to the followings
• Government with this research work will be witty and
aware of the extent the activities of EFCC has contributed in
administration and controlling of fraud in Nigeria. It will also be
of great significant in examining the area of weakness and how
best to improve them for effective regulation of fraud.
• To the academic, the research work will help them
formulate more theories and strategies that will enhance the
effectiveness of EFCC in ensuring financial accountability and
transparency. It will also contribute to the enrichment of
literature on EFCC and serve as a body of reserved knowledge
to be referred to by researchers.
• Public sector, by this we mean all government
parastatals, institutions, ministries, corporations etc.
FIUs work will expose them to the activities of EFCC.
• Private sector: By this we mean individuals and corporate
bodies who have contributed their resources to provide
goods and services to the public at a profit. They carry
out their various activities which are expected to be done
within the ambits of laws and legislations governing their
operations. They include sole proprietorship, partnership,
corporate organizations among others.
1.7 SCOPE AND LIMITATION OF THE STUDY.
The scope of this study tries to take a holistic view of the
activities of EFCC in Nigeria and how these can help improve
financial accountability and transparency. It embraces their
operations both in the public and private sectors with the aim of
improving financial efficiency.
1.8 LIMITATIONS.
This research work would suffer many set backs due to a
lot of reasons. One of such is the inaccessibility of information
from the office of EFCC. Presently, they are security conscious
and unwilling to disclose information and plans available some
write ups and journals which would have been helpful for this
research work. Ideally, the work should have involved more
states but due to some inherent constraint such as time and
money but effort would be made to at least touch a great
number of states to have a balance view of this research.
1.9 DEFINITION OF TERMS.
• EFCC: This is an acronym for Economic and Financial
crimes commission. It is a commission created by an act
of the National Assembly in 2002 and was amended in
2004. It is charged with the responsibility of investigating
and enforcement of all laws against economic and
financial crimes.
• 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 (Chike Nwoha 2003:33).
REFERENCES
‘Economic and Financial crimes commission EFCC (2004),
Information Handbook 1, Jexcel commercial and securities printers, EFCC, PP 1-5.
“EFCC made me cry,” (2007): Journal of EFCC (Zero tolerance),
4th April, vol.1 No. 4. “On the Run”, Journal of EFCC (Zero tolerance) Dec.2, 2007, vol.
2. Dariye, Nyarne Join Kalu, Turaki in Prison, Vanguard, vol. 23 No. 60374, front page & p. 15. EFCC establishment Act, 2004.
EFCC money Laundering and prohibition Act, 2004
Ise, O.L, I’m ready to return Loot, (2007): Vanguard, vol. 23: No 6, July 23Frontpage p. 15.
Nigeria Financial intelligent unit information Handbook (2007):
“Public Service corruption, The New offensive,” Journal of EFCC (Zero tolerance) Jan.3, vol.1 No. 3.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Fraud and Criminality of all kinds have caused the
government and the residents of this nation a colossal amount
of money to protect and prevent. Over the years the government
has spent recurrently over fifty billion Naira annually in
providing facilities, resources and intellectuals that will assist in
curbing this peril. The endemic and persuasive aspect of this
crime is that in the opinion of Myrem and Garcoa (1989:130), it
presents special legal problems, complicated accounting and
auditing problems.
Financial and Economic Crimes, usually called white-
collar crime according to EFCC information book 1, is
widespread in the Nigeria system, they are characterized by
deceit, concealment or violation of trust, and are not dependent
upon the application or threat of physical force or violation.
Individual commit such acts and organizations in order to
obtain personal and business advantage. Criminal activities
such as corporate fraud, health care fraud, mortgage fraud,
identity theft, insurance fraud and money laundering are
critical and sophistical to handle and control. As a result of
their Economic and Financial Crimes Commission (EFCC)
whose mission is to oversee the investigation of financial fraud
and economic irregularities against individuals, corporate
bodies and national communities?
2.1 ORIGIN OF ECONOMIC AND FINANCIAL CRIMES COMMISSION (EFCC). The Economic and Financial Crimes Commission (EFCC)
was established in 2002 by an Act of the National Assembly,
which was amended in 2004. The conception of the commission
was borne out of the determination of the federal government to
sanitize the Nigeria economic environment by enforcing all
economic and financial crimes law (EFCC information Book 1).
Prior to the set up of the EFCC, Economic and Financial
Crime constituted a great challenge to the Nigeria economy and
its image profile. Before now the country has become a domicile
for economic and financial crimes perpetrators. Corruptions,
lack of accountability, economic mismanagement and
fraudulent activities have been the irritation of the economy.
The establishment of EFCC Act was therefore a major
department from the past enabling laws for fighting economic
and financial crimes, in terms of power, functions and duties.
The commission has a high level support from the presidency,
the legislature and other key securities and law enforcement
agencies in Nigeria. To carryout their functions effectively,
EFCC is embodies with several units.
They include:
• Office of the executive chairman.
• Office of the commission secretary.
• Director organization support.
• Zonal offices.
• Operational units.
• Financial and Account Unit.
• Human resource Unit.
• External co-operational Units.
• Media and publicity.
• Information, communication and Telecommunication unit.
• Nigeria Financial Intelligent unit (NFIU).
• Inspectorate directorate/servicemen unit.
• Training and research institutes.
2.1.1 ECONOMIC AND FINANCIAL CRIMES.
Economic crimes relate to default in the distribution of
income and wealth in the economy. Financial crimes also relate
to default but in the area of providing and managing funds for
economic activities. Several ways or methods through which
economic and financial crimes can be committed in the
economy are: abuse of office, manipulation of records,
misappropriation or diversion of funds, over invoicing, bribery of
government officials, false declarations, unconventional and
fraudulent trade practices, Kick-backs (i.e. percentage payment
made to somebody who has enabled one to make money),
fraudulent award of contracts, money laundering, tax fraud,
establishing “dummy companies”, establishing real companies
using another person’s name or secret name, transferring stolen
monies abroad either through bank transfers or by physically
carrying foreign exchange abroad through the airports etc.
2.1.2 CAUSES OF ECONOMIC AND FINANCIAL CRIMES.
(1) Political Instability: when there is constant change in
government, there is tendency that officials in public sector will
indulge in financial crimes to their own betterments since the
change will result in new accounts being giving and hence, any
crime committed can be effectively hidden or concealed:
(2) Corrupt Officials in the Economy: When the officials
working in the Public and private sectors are corrupt, dishonest
practices become the order of the day. For instance, offering
and accepting of bribes can make an official to disclose or hide
vital information or records.
(3) Greed: When one’s quest for wealth is insatiable, there is a
strong desire for more wealth than is right or reasonable and
this can make the person to resort to financial or economic
crime.
(4) Selfish Motive: A selfish person thinks chiefly of and is
interested in his or her own personal needs and welfare without
care for others. This makes the person to commit financial
crimes to the detriment of others.
(5) Inadequate Salary Structure: When officials are paid below
standard, they are tempted to commit financial crimes so as to
increase their source of livelihood. Delay in payment can also
lead one to commit financial crimes.
(6) Corruption: The influence of corruption has taken over the
control of the nation. It rules our lives as it were and has
become the major consideration on the governance of our affairs
as a people. This makes it easy for people to indulge in
economic and financial crimes as it is now the order of the day.
2.1.3 EFFECTS/CONSEQUENCENCES OF ECONOMIC AND FINANCIAL CRIMES.
In general, economic and financial crimes have a negative
consequence on the economy. These are highlights on some of
the major consequences:
• It decreases foreign direct investment in the country as
foreigner’s faith in the country is at its minimum.
• It daints the national image and hence reduces the respect
people has for the nation.
• It reduces public spending on essential basic social amenities
like education and health.
• It is politically destabilizing.
• It paves way for inadequate and decaying infrastructure.
• It leads to lack of effective co-ordination across levels of
government.
• It impacts negative on economic growth.
• It hinders development.
• It promotes corruption in the society.
• It encourages officials to be non-challant in the performance
of duties.
• It causes increase misery, hunger and insecurity in the
country.
2.2 POWER OF EFCC IN CONTROLLING CRIME.
According to the EFCC Handbook information 1, the
commission has the power to:
• Cause investigation to be conducted as to whether anybody
has committed an offence under the Act.
• It can also investigate whether anyone is in the process of
committing offences under the Act.
• Investigate the properties of any person if it appears to the
commission that the person’s lifestyle and extent to the
properties are not justified by his source of income.
• The commission is also charged w0ith the responsibility of
enforcing the previous of the following laws:
(1) The Advance fee fraud and other related offences Acts 1995
as amended.
(2) The failed banks (Recovery of Debts) and financial
malpractices in Banks Act 1994 as amended.
(3) Miscellaneous offences Act (cap. 401: LFN).
(4) Any other law or regulations relating to economic and
financial crimes including the criminal code and penal code.
2.2.1 MANDATES OF THE COMMISSION.
EFCC is bestowed with the responsibility of investigating and
the enforcement of all laws against economic and financial
crimes in all its ramifications. The following are the major
functions and mandates set out in the enabling Act according to
EFCC information Handbook 2;
• Enforcement and due administration of the provision of the
Act.
• Investigation of all financial crimes such as Advance fee fraud
(known as 419) counterfeiting, money laundering illegal charge
transfers, capital market fraud, fraudulent encashment of
negotiable instruments or fraudulent diversion of funds,
issuance of dud cheques, forgery of0 financial instruments,
computer credit card fraud, contract scam, corporate fraud
such as Accounting scheme, self-dealing, obstruction of justice
to conceal illegal activities from criminal and regulatory
authorities etc.
• Dealing with matters connected with extradition, deportation
and manual legal or other assistance between Nigeria and any
other country involving economic and financial crimes.
• Adoption of measures to identity, trace, freeze, confiscate, or
seize proceeds derived from terrorist activities, economic and
financial crimes related offences, or the properties, the value of
which correspond to such proceeds.
• Determination of the extent of financial loss and such other
losses by government, private individuals or organization.
• Adoption of measures to eradicate and prevent the
commission of economic and financial crimes with a view to
identifying individuals, corporate bodies or groups involved.
• Collaboration with government bodies within and outside
Nigeria in carrying out the functions wholly or in part with
those of the commission.
2.3 MATTERS EFCC INVESTIGATE.
The matters EFCC investigate are mainly in the areas of
financial frauds and also to facilitate the forfeiture of assets
from those engaging in federal or state crimes. They include:
• Banking Fraud: The mission of this section is to identify,
target, disrupt and dismantle, criminal organization and
individuals engaged in fraud schemes, which targets our
nation’s financial institutions. It mainly investigates cases
involving banks and other financial institutions i.e frauds in
Banks. Example, issuance of Dud cheques, fraudulent
encashment of negotiable instruments, foreign exchange
malpractices and other financial institutions.
• Government Fraud: In this section, EFCC deals with cases
that have flare with good governance, transparency and
accountability. It is also however, investigates cases ranging
from abuse of public office, official corruption, bribery of
government officials diversion of public funds through
fraudulent award of contracts, corruption in land allocation, tax
fraud, capital market fraud, money laundering, oil bunking etc.
• Advance Fee Fraud: This aspect of fraud is prevalent in the
system and it is commonly called “419”. The commission
investigates cases of advance fee fraud, that is obtaining false
practice through difference fraudulent schemes, example, credit
card scam, inheritance scam, contract scam, job scam, lottery
scam, wash scam (money washing scam), marriage scam,
immigration scam counteracting, religious scam. More so, the
commission also investigates cases of cyber crime which is
mutably undertaken in cyber café either by the operators or
their customers within the nation.
2.4 CAPITAL MARKET FRAUD.
The Nigerian Capital Market - A financial market is made
up of series of arrangement, institutions, facilities and
processes that facilitate the exchange of funds between the
suppliers of such funds (Lenders and investors) and users of
the funds (government, corporate bodies and individuals).
The capital market is one of the segments of the financial
market. The other segments of the financial market include the
money market and insurance market.
The duration of the lending/borrowing arrangement and
the nature of the instrument/product used, determines the
classification of a financial transaction as either a money
market or capital market activity. The money market is a
market where funds for short-term purpose (usually between a
day and one year) are sourced, while the capital market is a
market where funds for medium long-term purposes (usually
above one year and upwards) are sourced.
The capital market is divided into two segments:
i. The primary market and
ii. The secondary market.
The primary market is a market for raising fresh/new funds
from the investing public, while the secondary market is a
market for trading in financial instruments/products previously
issued in the primary market.
Roles of the Nigerian Capital Market.
The Nigerian capital market plays an important role in the
development of the Nigerian economy. Some of the roles that
the capital market performs are as follows:
It provides opportunities for companies to borrow funds
needed for long- term investment purposes.
It provides avenue for the marketing of shares and other
securities in order to raise fresh funds for expansion of
operations, leading to increase in output/productivity.
It provides facilities that enable foreign business to offer
their shares to the Nigerian capital market. In order words,
the Nigerian public has the opportunity to invest and
participate in the ownership of foreign business.
It also encourages inflow of foreign capital when foreign
companies or investors invest in domestic securities.
It provides opportunities for government to finance
projects aimed at providing essential amenities for socio-
economic development.
Government can also use the capital market to carry out
its privatization exercise by offering its shareholdings in
state owned enterprises to members of the public through
the stock exchange.
Through its allocative mechanism, the capital market
ensures on efficient and affective distribution of scarce
resources for optimal benefit to the economy.
It provides employment opportunities for the ever-growing
labour force.
It encourages transparency and good
accounting/management practices, by ensuring that
companies disclose relevant and adequate information to
enable potential investors and shareholders make well
informed decision.
It creates an avenue for the populace to participate. In the
corporate sector of the economy and share in its wealth
through ownership of securities.
It reduces the over-relevance on short-term financing for
long-term projects.
It provides the need seed money for venture capital
development which could serve as a vehicle for industrial
development.
The capital market provides facilities and regulates unit
trusts which can be used by small savers to access fund in
the market for investment.
The capital market through its activities also provides
opportunities for community saving like Isusu, Adashe,
and Ajo etc.
Prospect of the Nigeria Capital Market.
The Nigerian stock market has the capacity to continue to
provide avenues for government and corporate entities to
effect optimal financial and capital base broadening. Such
sound financial services will no doubt serve as hedge
against the vagaries of business and economic cycles,
which have in recent time shaken the basic fabrics of our
national economy.
The capital market, as the citadel of the private sector, is a
network of institution that can render such services
capable of revamping a nation’s economy. But for it to
render such services with optimal efficiency, the
assistance of government is needed in the area of fiscal
policies and provision of efficient infrastructure,
telecommunications and investment incentives. No capital
market institutions works in isolation, for the entire
system to function properly. Fiscal policies and incentives
that can stimulate both investors and users of long-term
funds.
It is no exaggeration to say that in modern industrial
society like ours, which recognizes the rights to private
ownership of capital, the capital market provides the right
sign posts that serve as economic indicators and a means
through which the needed economic development and
recovery can be achieved.
Capital market instruments and institutions help to
support national growth and development. Capital
markets should therefore be accorded pride of place in
national economic development programmes.
Challenges of the Nigeria Capital Market.
• Increasing the level of market awareness: The level of
capital market awareness in the country is as low as many
Nigerians are still very much uninformed about this arm of the
financial market. The SEC has been making a lot of effort in
this regard through its series of investor education programmes
such as state enlightenment programmes, specialized deck in
ensuring that the awareness level is greatly improved. It will
require the use of government machinery and Non-Government
organizations (NGOs) to carry out the awareness campaign to
the level required. State chambers of commerce, in collaboration
with their respective ministry of commerce and industry will
need to collaborate for programmes that will be specifically
tailored to encourage and their respective communities to be
active participants in the capital market.
• Formulation of appropriate economic policies and
sustenance of political stability: The reform of the Nigerian
economy will be predicated on a number of factors, among
which are the formulations of capital market-friendly policies
that include tax and other incentives to investors and other
participants on the market. These will help promote a strong
private sectored economy as envisaged by NEEDS to contribute
to low unemployment level, low inflation rate and stable
exchange rate.
• Bolstering the return of flight capital: Capital flight is an
indication of a “vote of no confidence” in an economy. Capital is
often said “knows no boundary”, and will flow only to an
economy which offers certain attractions including safety of
investment, good return on investment etc. foreign investors
and Nigerian in the Diaspora must be encouraged to invest in
the Nigerian capital market. Information on the Nigerian capital
market must be available on regular basis to the above groups
to stimulate their interest and propel them to invest.
• Improving the Liquidity Level of the Market: Among the
biggest challenges of the Nigerian capital market is the creation
of a highly liquid market in which investors can buy and sell
with relative ease, and large transaction are consummated
without significant changes in prices. This becomes necessary
given the backdrop that will informed investors generally
consider the level of a market’s liquidity before investigating in
such a market. They will only consider a market, which
provides ease of entry and exit. To a large extent, the changes
that have taken place in the stock market in recent years have
improved the standing of the capital market.
• Deepening of the market and the introduction of new products
such as derivatives and better legal framework are priorities of
the market. This is also being implemented by efforts to provide
more and better facilities.
The financial crimes section of federal bureau of investigation
(FBI) in USA called it “Corporate Fraud”. The corporate fraud
case pursued by this unit involves accounting schemes, self-
dealing by corporate executives and obstruction of justice to
conceal illegal activities from criminal and regulatory
authorities. The majority from criminal and regulatory
authorities. The majority of cases pursued by the commission
include accounting schemes designed to deceive investors and
analyst about the true financial condition of a corporation (i.e.
Company), through the manipulation of financial data, the
share price of a company remains artificially inflated based on
fictitious performance indicators provided to the investing
public. To achieve this, the corporate fraud perpetrators involve
the following activities:
• Falsification of Financial Information: False account
entries, bogus trades designed to inflate profit or hide losses
and false transaction designed to evade regulatory over sight.
• Self-dealing by Corporate Insiders: Includes insiders
trading, kickbacks, and misuse of corporate properties for
personal gain individual tax violations related to self-dealing.
• Obstruction of Justice Designed to Conceal Illegal
Activities: Particularly when the obstruction impedes the
inquiries of the Securities and Exchange Commission (SEC)
other regulatory agencies, and/or law enforcement agencies.
The commission has placed greater emphasis on investigating
allegations of these frauds by collaboration and partnering with
some agencies to capitalize on their expertise in specific areas
such as securities, fax, pensions, energy and commodities.
These agencies contribute significant personnel, resource and
technical expertise to corporate and securities fraud
investigations.
• Terrorism: Over the years, issues on terrorism and terrorist
activities have dominated the front page pf most newspapers
and have been the headline of TV stations around the globe.
Due to the intense danger and wreckage terrorist activities pose
to the world and with the 11th September, 2001 terrorist attack
on world trade center (WTC) New York USA experience. The
commission strategically located an Anti-Terrorism unit (ATU)
in the office of the executive chairman as a special unit saddled
with the sole responsibility of investigating and combating
terrorism and terrorist tendencies within the technique feasibly
employed by the ATU to carry out her responsibility is both
proactive and reactive. It plans to mobilize and activate its
intelligence gathering capability to detect and monitor funds
being channeled to suspected terrorist or terrorist organizations
to enable the commission deal with situation appropriately
before the advent of terrorist strikes. The ATU also plans
strategically to develop the necessary national preparedness to
deal with terrorist activities during and after the advent and
thus undertaking an effective postmortem of their plans and
strategies which enables them to trace and deal with any
observable patter and sequence that present possibility of re-
occurrence.
2.5 EFCC AND OTHER ARMS.
Upon the mandate of EFCC to sanitize the Nigeria economic
environment by way of enforcing all financial and economic
laws, there are some other arms within and outside the
commission that are set up with a tangential responsibility.
They are:
• Nigeria Financial Intelligence Unit (NFIU): As part of its
effort to combat money laundering and the financing of terrorist
activities in Nigeria, NFIU domiciled in EFCC was set up by
federal government. This is a pre-condition for the removal of
Nigeria from the financial Action Task force (FATF) list of non-
cooperation countries and Territories (NCCTS). NFIU is an
autonomous central national agency saddled with the
responsibility to receive and analyze financial information.
• Transaction Report (STRs): From financial institutions and
designated non-financial institutions with a view to
disseminating intelligence information arising thereof to law
enforcement agencies (LEAs) and other stakeholders. The unit is
composed of 10 man technical committee from CBN, NDIC, the
private sector, a policy officer, together with an employee of
EFCC.
• The Independent Corrupt Practices Commission (ICPC): Prior
to the year 2003, the country has been living with the stigma of
being the most corrupt nation in the world as adjudged by the
World Transparency board, due to the level of corruption in
Nigeria especially in the public sector. As a result of this
menace, federal government established ICPC in 2000 to
checkmate, investigate and combat the ugly trend of bribery
and corruption within the civil and public service, but it is
limited in time to offences committed from 2000. ICPC is not
empowered legally to prosecute investigated matters.
2.6 CONSTRAINTS FACED BY EFCC IN CURBING FRAUD IN NIGERIA.
Over time, the commission has been faced with some
complex, complicated and perennial problems in detecting and
curbing financial fraud in private and public sector. These
constraints did not culminate due to her ineffectiveness or
malfunctioning in discharge of her oversight functions, but due
to some technicalities in administration of criminal prosecution
and emphasis on prosecution of economic crime. The following
are the special areas the commission encounter handles in
curbing fraud in Nigeria.
• Accounting constraints.
• Legal constraints.
• ACCOUNTING CONSTRAINTS.
Accounting is the process of recording and interpretation of
financial transactions while auditing entails the analysis of
these records, the preparation of summary statement based on
the analysis and certification that the summary statement
presents an accurate picture of the financial activities.
Adeniyi A.A (2004: 1) views auditing as “the independent
examination of an expression of opinion on, the financial
statements of an enterprise by an appointed auditor in
pursuance of the appointment and in compliance with any
relevant statutory obligation”.
Accountants and auditors are accustomed to preparing
materials for use in wide varieties of administrative and civil
legal proceedings, but not all of these materials which
concerned alleged violation of law. Before now, these
professionals are not often involved in investigation or viewing
towards criminal prosecutions, but their involvement is
heighten with the recent emphasis on prosecution of economic
fraud.
Investigation of economic crimes and frauds are not the
primary object of an auditor or an accountant because they are
not usually familiar with the procedure for obtaining and safe
guarding evidence in a manner that will ensure its admissibility
at later criminal trials. Even auditors in the public sector are
not tutelaged to noting when a witness in a custodial situation
becomes a suspected criminal violator and at that moment
administering warming. They also may not be witty of how
much more evidence must be obtained in criminal cases to meet
the burden of proof that is necessary to prove some elements of
a civil case by a significance of the evidence or even by vivid and
convincing evidence.
Criminal investigators, on the other hand are not usually
equipped and skilled as the accountants or auditors in
discovering and documenting the paper trials driven to and
from every financial transaction. They (ie Criminal investigators)
also lack pre-requisite knowledge or documenting violation of
civil and administrative regulative that may carry a sanction
more effective in charging a cause of activity than would any
criminal penalty provided. Though an office of Inspector General
has been set up in almost every major federal department since
1970 and pr-existing separated accounting/auditing units and
criminal investigation units frequently put together in that office
to monitor and curb fraud in public sector, but all these have
suffered irreconcilable conflict without the possibility of
separating them, often times we have heard
Auditors/Accountants say that their required new
concentration on criminal fraud as opposed to their primary
objects has set their profession back. Criminal investigators on
the other hand find themselves in undaunted with documents
that will bury them for years if brought for prosecution.
• LEGAL CONSTRAINTS.
Investigators, be it accountants, auditors or specialized
expert working on financial and economic crimes must deal
with a very complex and complicated area of the law, both
criminal and civil. On the criminal prosecuting understanding
and differentiating among such concept as larceny by tricks,
fraud, embezzlement, items of value by false pretence have
beleaguered generations of law advocates. Some status have
attempted to modify and simplify this area of the law by
amalgamating these offences into a single offence of “theft”, but
the interpretation of these status has been an issue to the
courts. In addition, there has been other status, which
prescribed, different kinds of frauds in a varied and complicated
way.
Evidence, it is observed that most of the significant law is
civil, if violated can amount to civil penalties and as well
criminal sanctions such areas as insurance law, corporate law,
real estate, false advertising and securities to which most
criminal investigation are never unveiled. Though they are
frequently alternatives to criminal prosecution, civil remedies
that are administrative or regulatory. One of which is the
injunction against future unreasonable conduct.
Furthermore, there is no status in the criminal code that
defined “Economic Crime”, and as a result, wherever a criminal
prosecution is sought, it becomes difficult to frame the charges
adequately, and the onus lies in the discretion of the presiding
judge. It is in line with this that EFCC was set up to deliberate
on this issue and frames the charge suitably to various
offences.
According to Mohammed (2004:4), the economic and
financial crime commission is established by the EFCC Act of
2003 as a body corporate to enforce and administer the
provision of the Act. It is a designated financial intelligent unit
in Nigeria with the power to co-ordinate the various institutions
involved in the fight against money laundering and enforcement
of all laws dealing with financial and economic crimes in
Nigeria.
Also, it is stated in the EFCC Act (2003), those commision’s
broad statutory duties and responsibilities covers dealings with
economic and financial crimes and combating as well as
terrorist and terrorist tendencies. But all these development
and improvement in identifying, detecting, investigating and
prosecuting economic crimes still envisaged some legal
constraints in effective discharge of her mandate.
2.7 ACHIEVEMENTS OF EFCC
The existence of EFCC through the EFCC establishment
Act of 2004 has overwhelmingly help the process of involving a
Nigeria philosophy that shed off the miasma around our image
and aspiration as a people and a nation. As part of her
mandate, EFCC has recorded a little success especially in
restoring accountability, integrity, transparency and
consciousness in public resources stewardship. According to
Mallam Nuhu Ribadu, the former executive chairman, EFCC
during paper presentation to the senate on 27 September,
2066, he said “for us at the Economic and Financial Crime
Commission (EFCC), we never lose sense of perspective that
over mandate derived from this chamber, and that we are
agents of the vision you constructed which is to promote a
policy platform of accountability and transparency. He went on
and said, “Today, I stand confidently before you to announce
that among our little success to date, the commission can boast
of the following achievements in the implementation of its
preventive and prosecution mandate.
Petitions received 4324; cases under investigation 2103;
cases under prosecution 306; arrest more than 2000; properties
recovered-several houses, land, luxury cars, airplanes and oil
tankers, value of assets and cash received and 5 billion dollars;
number of convictions 88. Among these successes and
achievements, the public sector has tremendously benefited
from it. Recently we have witness the arraignment of and
prosecution of some ex-governors and other government
officials over misappropriation and embezzlement of public fund
and allegedly diversion of public funds.
According to EFCC public relation officer, the arraigned ex-
governors are:
1. Saminu Turaki - Jigawa State
2. Orji Uzor Kalu - Abia State
3. Dr. Chimaroke Nnamani - Enugu State
4. Nyame Jolly - Taraba State
5. Diepreye Alarneiyeseigha - Bayelsa State
Their count charges are:
• Dr. Chimaroke Nnamani (Enugu State) faces 105 count
charges over alleged N5.4 billion graft.
• Nyame Jolly (Taraba State) faces 41 count charges over
alleged Ni .6 billion stolen from the treasure of his states
according to EFCC, he stole the money between January 2005
and May 2007 through: inflation of contract, kickbacks, funding
of non-existing projects and outright diversion of public funds.
• Turaki Saminu (Jigawa State) faces 32 count charges of
welfare of his people.
• Orji Uzor Kalu (Abia State) faces 107 count charges of money
laundering offences.
• Diepreye Alarnieyeseigha (Bayelsa State) has been under the
custody of EFCC after his impeachment as governor in 2005
over alleged money laundering in London. It was reported that a
London metropolitan police has consequently arraigned him
before to a London court, but upon securing bail, he absconded
to Nigeria where EFCC arrested and formally brought him to a
court in Nigeria. On 2005, he was convicted and imprisoned for
two years term in jail.
On July, 22nd 2007, Jolly Nyame of Taraba State accepted
before a federal high court sitting in Abuja to return all loot
(Vanguard 1 & 15). The trails of these ex-governors are still on,
on different high courts in the federation. And EFCC still
maintained her ground that anyone found to have abused the
trust of Nigerians would be brought to book, no matter who
he/she is and how long it takes.
Furthermore, EFCC is also filling charges against persons
indicted by a comprehensive investigation carried out by the
commission over mismanagement of petroleum and technology
development fund, PTDF, among which is the ex-vice president
of the federal republic of Nigeria Atiku Abubakar, is involved.
For substantial evidence and fails, the commission visited the
office of the Bank PHB on November, 2006 in order to secure
originals of documents relating to the Petroleum and
Technology Development Fund (PTDF) abuses.
Within three years of her existence, EFCC has played a
significant and indelible role in detecting and controlling frauds
not only in Nigeria public sectors but also in Nigeria as a whole.
We anticipate that they should be consolidated and make more
efficient to make Nigeria a crime free nation and a voice in
global security tendencies.
EFCC has continue its slaught against sacked Former
Managing Directors of Banks in Nigeria as may 5” 2011 filled a
28 count charge against Former boss of Intercontinental Bank
Plc, Erastus Akingbola, his wife Anthonia and a long time family
friend Mr. Bayo Dada over alleged N47 billion scam bordering
on alleged money laundering, fraudulent transactions, breach of
public trust and other sundry offences.
The anti-graft agency in taking the decision stated that it
derived legal backing from section 390(7) criminal code cap of
Lagos Laws of 2003 to file the case against the trio in a Lagos
High court in the Ikeja Division.
The first count read “That you Akingbola sometime in
March 2009 stole the sum of 8,540,138.48 (eight million five
hundred and forty thousand, one hundred and thirty eight
pound forty eight pence) property of Intercontinental Bank Plc,
fraudulently converting it to your personal use”.
The second count also read: “That you Akingbola
sometime in June 2009 stole N2000 million property of
Intercontinental Bank Plc converting it to the property of tropics
property a company, which you are a director.
That you Akingbola as CEO of Intercontinental Bank Plc
sometime in March 2009 stole the sum of N2 billion, Ni 08
million, one hundred and thirty five thousand, four hundred
and eighty four sixty kobo, property of Intercontinental Bank
Plc fraudulent converting it to your personal use”.
The anti-graft body had on 3 May 2011 detained the embattled
Former MD and other nine bank chiefs but was granted
administrative bail by the commission but fresh charges were
made against them bordering on money laundering.
The prominent ones among them were Akingbola, Sebastine
Adigwe Former CEO of Afribank and Okey Nwosa of FinBank
Plc and the others that were not named.
The trio of Akingbola, Adigwe and Nwose, eight other ex-
executive directors were interrogated over fresh information of
stealing of depositors funds while they held sway at the named
Banks.
Aside the wife of Akingbola wife of former Managing
Director of BankPHB Mrs. Elizabeth Atuche was arrested by the
EFCC for allegedly using her company to launder over Ni 00
billion of depositors fund.
Indication emerged on 5th May, 2011 that all contracts may
come under the watchful radar of the Economic and Financial
Crimes Commission (EFCC) as it lamented that contracts
executed in the country does not reflect on the lives of
Nigerians, calling for the experts to monitor implementation and
advice government on policies and projects.
Chairman of the Commission Farida Waziri who was said
to have spoken in Lagos while addressing members of the
Nigeria-British chamber of Commerce at a breakfast meeting
said the move will help stem the trend in which contracts do not
reflect on the lives of the people.
The EFCC boss also called for a drastic reduction in
Jumbo salaries enjoyed by public office holders adding that the
issue of human rights should be down played if the commission
is to make a success of its fight against corruption in Nigeria.
According to a statement from Head, media and publicity
unit of EFCC, Femi Babafemi, Waziri told the meeting that “the
present scenario of award of huge contracts without a
corresponding positive impact on the economy does not suggest
effective and efficient implementation”. She said the think-tank
when constituted should have the power to recommend the
sacking of any erring official even as she lamented that the
abuse of public trust by senior public officials was a major
drawback in the development efforts of the nation.
“The prevention of primitive acquisition of public wealth
for private use is therefore a major challenge which the EFCC is
addressing. In the case investigated by the commission a late
senior independent National Electoral Commission (INEC)
official stole Ni .2billion while another official in an on going
case stole over N6.4billion, most of them proceed of contract of
works that had been fully paid for yet not executed”.
Mrs. Waziri equally called for the downward review of the
allowances and other perks of public office holders to make
public office unattractive nothing that “The jumbo salaries and
allowances presently earned by certain politicians cannot be
justified and must be discontinued.
The Commission (EFCC) achieved by enthroning a regime
of respect for Rule of Law and creating an investment friendly
environment for the financial and industrial sectors of the
economy noting however that the EFCC has been effective in an
otherwise hostile environment replate with failure of
institutions.
They also improved public consciousness about corruption
issues generated through the vehicle of the Anti-corruption
Revolution campaign ANCOR; a public/civil society partnership
initiative designed to help the people take ownership of the anti-
graft campaign.
REFERENCES
Ajaro, C. (2004): In the Eyes of EFCC, Newswatch computer; Communication Centre.
Dariye, Nyame Join Kalu, Turaki, in Prison, Vanguard, vol. 23 No 60374, front page & P. 15. Economic and Financial Crimes Commission EFCC (2004):
Information Handbook 1, Jexcel Commercial and securities Printers; EFCC, Pp 1-5.
EFCC Establishment Act, 2004. EFCC Money laundering and prohibition Act, (2004). Egbebor, A. (2005): Corruption Has Destabilized Our Society,
Ventral Press and Printing Ibrahim. Federal bureau of investigation FBI, (2006): Financial and
Economic Crimes, FBI, www.google.com. Howared, S. et al (2005): Techniques and strategies for Detection
of Fraud: John Wely & Sons, Inc. Hoboker, New Jersey. I’m ready to return loot, (2007): Vanguard, Vol. 23: No 6, July,
23 front page & p. 15. Idika, C.O and et al (2001): Anti-Corruption Advocacy Handbook
(fix Nigeria initiative), Talab Global view Ltd. Koletar, J.W. (2003): Fraud Exposed: John Wiley & Sons, mc;
Hoboker, New Jersey. Nigeria Financial Intelligent unit information Handbook: (2007):
“Public Service Corruption, The New Offensive”, journal of EFCC (Zero tolerance) Jan. 3, vol. 1 No. 3.
Onyesanya, (2004): A Performance Review of EFCC and NCNF, www.nigeriavillaeaguar.com
Oxford Dictionary, Advanced learning Dictionary, 6th Edition. Ribadu, N.M (2006), Interim Investigation Report on Cases of
Financial Misappropriation and money laundering against some States and local government, presentation of Senate; Pp 1-2.
Richard, A. & et al (1989): Investigation for Determination of
facts, New York; MC Graw Hills. The Nigeria Capital Market; Developments, Investment Options,
Players, Prospects, Challenges, produced by Research and Market Dev. Dept (SEC).
CHAPTER THREE
RESEARCH METHODOLOGY
This chapter will be looking at the various procedures,
techniques and methods adopted in the study. They include:
3.1 RESEARCH DESIGN
The mechanism adopted fro the planning and
implementation of this scientific study consists of questionnaire
and interview, the technique of data collection is the use of both
primary and secondary sources of data, statistical instrument
in data analysis and interpretation. The exploration of survey
through personal interview (i.e. face to face) enhance the
gathering of significant information on areas which otherwise
could not have been gathered through the use of questionnaire
only.
The design also involves investigation method in obtaining
data especially those that uncover the detecting and control of
financial and economic fraud prior and after the crime has been
committed.
3.2 AREA OF RESEARCH
This research inquiry tends to evaluate the contribution of
EFCC in promoting financial accountability and transparency in
Nigeria, is based on some selected ministries like NEPA i.e
PHCN, Federal Government secretariat in Enugu, office of the
Accountant general, Enugu state and some strategic unit of
EFCC in Lagos and Enugu zonal offices.
3.3 POPULATION AND SAMPLE SIZE
The population of this study is limited to one hundred and
twenty persons (120) selected from EFCC headquarters Lagos
and Enugu Zonal office. Lagos has fifty-five (55) persons; Enugu
has forty (40) persons and National Electric Power Authority,
Currently known as PHCN has twenty-five (25). The selection is
to enable the researcher obtain a good number of sample that
will produce adequate and valid information for the study.
Having taken the population of the study to be (120), the
researcher will employ a formulae propounded by Yare Yamane
to determine her sample size and the number of the question to
be administered to the selected sample.
n = N 1+Ne2.
Where n = the desired sample size
N = the Population i.e. 120 persons
1 = mathematical constant
e = margin of acceptable or allowable error
i.e. 1 --90%
1 90% i.e. 1 — 0.9 0.1
Substitute:
120 n = 1+120(0.1)
= 54.54
= 55 approximately
Since the sample size (n) is fifty-five (55) persons it means
that a total number of 55 questionnaires will be administered to
the selected sample.
TABLE 3.1 POPULATION SCHEDULE
S/NO NAME OF ORGANIZATION NO. OF POPULATION
1. EFCC Lagos Office 55
2 EFCC Enugu Office 40
3. NEPA (PHCN) 25
TOTAL 120
Source: Field Survey, 2011.
TABLE 3.2
THE NUMBER OF QUESTIONNAIRE IN THE SAMPLE SIZE AND THEIR RESPONDENTS
S/NO GROUP NO. OF POPULATION SAMPLE SIZE NO. OF SAMPLE (%)
1. EFCC Lagos Office
55 20 46
2 EFCC Enugu Office
40 15 33
3. NEPA (PHCN)
25 20 21
TOTAL 120 55 100
Source: Field Survey, 2011.
TABLE 3.3
The number of questionnaires distributed to selected staff
of the different groups;
S/NO GROUP DISTRIBUTED NO. OF SAMPLE (%)
1 EFCC Lagos Office 20 46
2. EFCC Enugu Office 15 33
3. NEPA (PHCN) 20 21
TOTAL 55 100
Source: Field Survey, 2011.
3.4 RESEARCH INSTRUMENTATION FOR DATA COLLECTION
The overriding techniques of investigation often adopted
were the oral interview and a well constructed questionnaire.
The researcher’s investigation (instrument) and analysis,
however, was principally based on questionnaires administered
by her respondents.
The questionnaires were structured in a way that will
enable the researcher collect as much primary data as possible
from the respondents. The questionnaires were mostly
administered more than any other research instruments.
Respondents are free to express their own opinion and views to
these questionnaires.
The question is an open-ended questions which is well
structured and comprises of “Yes” or “No” form. It involved
selecting whereas the open-ended question provides
respondents discretion to answer in their own opinion and
ideas.
A total number of fifty-five (55) questionnaires were
administered as regard to the number of sample size and for the
purpose of the research study.
3.5 METHOD OF DATA COLLECTION
The instrument was administered personally by the
researcher with the aid of some research assistant in these
pertinent sections (offices) of people in the selected group of this
study.
Apart from the instrument for primary data collection the
researcher also employed some already made materials in form
of secondary data like:
- Published and unpublished articles
- Published textbooks
- Magazines and newspapers
- Information from internet
- Journals; etc
3.6 METHOD OF DATA ANALYSIS
The data collection were analyzed by the use of chi—square
test, a non- parametric test. The adoption of chi-square test
techniques is appropriate because it enables the researcher to
test the hypothesis if three distributions which come from the
same population of our study and also because our data was
based on classification rather that measurement. Formular for
calculating chi-square test is
X2 (f0 fe))2 or (oi ei)2 Fe ei
Where X2 = chi-square tests
Fo = Frequency observed
Fe = Frequency expected
= Summation
From the above, if the X2 is less than (<) the critical value,
we conclude that the observed frequency do not differ
significant from the expected frequency. However, if the
calculated is greater than (>) the critical value, we will reject the
null hypothesis (Ho) and accept the alternative. In this
situation, we would conclude that the expected frequencies
differ significantly from the calculated frequency.
USING DECISION RULE
Accept Hi if X2 calculated < critical value or
Reject Ho if otherwise.
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 DATA PRESENTATION
The aim of this chapter is to present, analyze and interpret
all data collected in this research work. The responses obtained
from the questionnaire by the respondents in this work have
been analyzed, using tables, frequency and sample percentage.
Each research question is presented and processed
immediately by a table showing the responses of all the
questions that aimed at answering the research questions were
asked and some were analyzed in this chapter.
RESEARCH QUESTION 1
How has EFCC carrying out her mandate and function?
TABLE 4.1 RESPONSE
OPTON GROUP RESPONSES TOTAL PERCENTAGE
EFCC Lagos
EFCC Enugu
NEPA PHCN
Effective 15 11 5 31 56
Ineffectively 5 4 15 24 44
TOTAL 20 15 20 55 100
Source: Field Survey, 2011.
From the table 4.1, 56% agreed that EFCC has been
carrying out her functions effectively, 44% were on a contrary
view, reasons being that there have been cases of officers to be
prosecuted. Based on this, one can deduce that the commission
has been effective in the execution of her mandates.
RESEARCH QUESTION 2
Have the activities of EFCC reduce financial and economic
crimes in Nigeria.
TABLE 4.2 RESPONSE
OPTON GROUP RESPONSES TOTAL PERCENTAGE
EFCC Lagos
EFCC Enugu
NEPA PHCN
Agreed 17 13 4 34 62
Disagreed 3 2 16 21 38
TOTAL 20 15 20 55 100
Source: Field Survey, 2011.
From 4.2, out of 55 respondents, 62% are of the opinion
that the activities of EFCC has tremendously reduce financial
and economic crimes in Nigeria especially in public sector, their
reason being that EFCC has recently received thousands of
petitions, prosecuted over 306 and has recovered several
properties and cash, and also through her preventive and
prosecution mandates reduces fraud tendencies, 38% of these
population disagreed with the reason that most of the petitions
received have not been tried or let alone investigated. Drawing
from the above, one can assert that the commissions’ activities
have reduced financial and economic crime to some extent.
RESEARCH QUESTION 3
Has EFCC activities benefited both .the public and private
sector in Nigeria?
TABLE 4.3 RESPONSE
OPTON GROUP RESPONSES TOTAL PERCENTAGE
EFCC Lagos
EFCC Enugu
NEPA PHCN
Yes 16 9 8 33 60
No 3 4 10 17 31
No Idea 1 2 2 5 9
TOTAL 20 15 20 55 100
Source: Field Survey, 2011.
The above table depicts that 60% of the population agreed
that EFCC Activities has benefited both the public and private
sector in Nigeria. Some based their view on the recent
arrangement of ex-governors and the acceptance of Jolly Nyame
formal governor of Taraba State, to return loot to his state.
Whereas 31% do not agree with that assertion reason being that
EFCC is being use by the present to fight his political enemies
and they have selective in the pursuer of their mandate 9%
have no ideal. Based on the foregoing, one can draw conclusion
that Nigeria public sector has benefited from activities of the
commission.
RESEARCH QUESTION 4
Has EFCC recorded any success or achievement since its
establishment?
TABLE 4.4 RESPONSE
OPTON GROUP RESPONSES TOTAL PERCENTAGE
EFCC Lagos
EFCC Enugu
NEPA PHCN
YES 20 14 5 39 71
NO - 1 13 14 25
No Idea - - 2 2 4
TOTAL 20 15 20 55 100
Source: Field Survey, 2011.
The table indicates that 71% of the respondents
vehemently agreed that EFCC has recorded some achievements
within the three years of her existence.
Majority of them cited example with the indictment of the
former police Inspector General Tafa Balogun, Diepreye
Alamieyeseigha and other big politicians in the country. While
25% of the respondents hold the opinion that EFCC has not
made any achievement 4% have no Idea whether they have or
not.
Based on this analysis, one can deduce that within a short
period EFCC has made success and achievement especially in
the recent prosecution of ex-government and other top officials
of government.
RESEARCH QUESTIONS 5
Can an EFCC official be held responsible if a case of fraud is
reported without investigation?
TABLE 4.5 RESPONSE
OPTON GROUP RESPONSES TOTAL PERCENTAGE
EFCC Lagos
EFCC Enugu
NEPA PHCN
YES 11 4 5 20 36
NO 9 9 8 26 47
No Idea - 2 7 9 16
TOTAL 20 15 20 55 100
Source: Field Survey, 2011.
The above table shows that 36% respondents said that an
EFCC official could be held responsible if a case of fraud is
reported without investigation, 47% on the other hand disagree
while 16% have no ideal. Drawing inference from the above, we
can conclude that if a case of fraud is reported without
investigation by EFCC official that he may or not be held
responsible to a certain extent.
RESEARCH QUESTION 6
Does government interfere in the operations of EFCC?
TABLE 4.6 RESPONSE
OPTON GROUP RESPONSES TOTAL PERCENTAGE
EFCC Lagos
EFCC Enugu
NEPA PHCN
YES 11 10 14 35 64
NO 9 5 6 20 36
TOTAL 20 15 20 55 100
Source: Field Survey, 2011.
In table 4.6, it is observed that 64% respondents agreed that
government interferes in the operations of EFCC.
Their reason is that the past regime of Obasanjo (1999-
2007) used her to fight his political enemies especially with the
recent selection of ex-governors for arrangements, 36% of the
sample size do not agree that federal government interferes in
the activities of EFCC.
RESEARCH QUESTION 7
How have the Banks in Nigeria assisted EFCC in catching and
investigating fraudsters?
TABLE 4.7 RESPONSE
OPTON GROUP RESPONSES TOTAL PERCENTAGE
EFCC Lagos
EFCC Enugu
NEPA PHCN
Well 2 6 5 13 24
Very well 6 6 5 17 31
Not at all 12 3 10 25 45
TOTAL 20 15 20 55 100
Source: Field Survey, 2011.
From the above table 24% of the respondents are the
opinion that Bank have assisted EFCC “well”, 31% opted for “
Very well” and 45% said “Not at all”. Against this backdrop, one
concludes that the percentage of respondents that said “Not at
all” are up to 50% or more to convince the researcher that
banks are not living up to expectation in this area.
RESEARCH QUESTION 8
Are there many challenges or constraints faced by EFCC in the
discharge of her mandates?
TABLE 4.8 RESPONSE
OPTON GROUP RESPONSES TOTAL PERCENTAGE
EFCC Lagos
EFCC Enugu
NEPA PHCN
YES 20 13 14 47 85
NO - 2 6 8 15
TOTAL 20 15 20 55 100
Source: Field Survey, 2011.
From the above analysis, 85% of the respondents agreed
that there are constraints faced by EFCC in the discharge of her
duties.
According to some, such constraints are:
- Security constraints
- Immunity power enjoyed by some political leaders
- Inadequacies of law enforcement agencies
- Political constraints
- Bribery and Corruption
- Inadequate facilities and technology for crimes detection etc.
15% of the respondents held a contrary view.
4.2 TESTING OF HYPOTHESIS
The research will adopt chi-square distribution method in
testing the hypothesis. This will be used to compare actual
(observed distribution) with a hypothesized (expected
distribution)
Formulae x2 = (0 —E)2
Where X2 = Chi-square test
0 = Observed frequency
E = Expected frequency
= Summation sign
Note that the NULL hypothesis should be tested.
The activities of EFCC cannot enhance financial accountability
and transparency in Nigeria.
Table 4.9 RESPONSE
OPTON GROUP RESPONSES TOTAL PERCENTAGE
EFCC Lagos
EFCC Enugu
NEPA PHCN
Can Enhance 5 7 13 35 64
Cannot 15 8 7 20 36
TOTAL 20 15 20 55 100
Source: Field Survey, 2011.
From the above Null hypothesis, it is observed that 64% of
the total respondents agreed that EFCC activities Can enhance
financial accountability and transparency, 36% opined in the
contrary. Let us apply the X2 to test the hypothesis.
The assumption:
The researcher assumed the level of significance to be 5% (i.e.
0.05).
DECISION RULE
- Accept Ho if the calculated value of X2 is less than the critical
value.
- Otherwise reject Ho.
TABLE 4.10
FREQUENCY TABLE RESPONSE 0 E (0-E) (0-E)2 (0-E)2
E
Can Enhance 37.5 27.5 7.5 56.25 2.0
Cannot Enhance 17.5 27.5 -7.5 56.25 2.0
TOTAL 55 55 0 112.5 4.0
To obtain expected value (e)
E = Sum of frequency No. of Element
E = 55 = 27.5 2
Chi-square test (X2) = 4.0
To determine degree of freedom
Df = (R-1) (C-1)
Where R = Rows
C = Columns
Df = 1
Then the critical value X2 (see chi-square distribution table)
X2 critical value = 3.841
Compare the two values
X2 Critical value = 3.841
X2 Calculated = 4.0
X2 Calculated > X2 critical value
:. 4.0 > 3.841
DECISION RULE:
The researcher will reject the Ho i.e. the activities of EFCC
cannot enhance financial accountability and transparency in
Nigeria”.
The alternative Hi that the activities of EFCC can enhance
financial accountability and transparency in Nigeria, is hereby
accepted. Note that the NULL hypothesis should be tested.
Ho: EFCC as s machinery cannot effectively detect and control
financial and economic irregularities in Nigeria.
TABLE 4.11 RESPONSES
OPTON GROUP RESPONSES TOTAL PERCENTAGE
EFCC Lagos
EFCC Enugu
NEPA PHCN
Can Enhance 5 7 13 35 64
Cannot Enhance 15 8 7 20 36
TOTAL 20 15 20 55 100
Source: Field Survey, 2011.
From the above Null hypothesis, it is observed that 64% of
the total respondents agreed that EFCC activities can effectively
detect and control financial and economic irregularities in
Nigeria, 36% opined in the contrary. Let us apply the X2 to test
the hypothesis
The assumption:
The researcher assumed the level of significance to be 5% (i.e.
0.05)
DECISION RULE
- Accept Ho if the calculated value of X2 is less than the critical
value.
- Otherwise reject Ho.
TABLE 4.12
FREQUENCY TABLE RESPONSE 0 E (0-E) (0-E)2 (0-E)2
E
Can Enhance 37.5 27.5 7.5 56.25 2.0
Cannot Enhance 17.5 27.5 -7.5 56.25 2.0
TOTAL 55 55 0 112.5 4.0
To obtain expected value (e)
E = Sum of frequency No. of Element
E = 55 = 27.5 2
Chi-square test (X2) = 4.0
To determine degree of freedom
Df= (R-1) (C-1)
Where R = Rows C = Columns
Df = 1
Then the critical value of X2 (see chi-square distribution table)
Rows
X2 critical value = 3.841
Compare the two values
X2 Critical value = 3.841
X2 Calculated = 4.0
X2 Calculated > X2 critical value
:. 4.0 >3.841
DECISION RULE:
The researcher will reject the Ho i.e. the activities of EFCC as
machinery cannot effectively detect and control financial and
economic irregularities in Nigeria. The alternative Hi that the
EFCC as machinery can effectively detect and control financial
and economic irregularities in Nigeria, is hereby accepted.
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS
5.1 SUMMARY OF FINDINGS
Basically, the previous chapter is the basis of this study as
it involved testing statistically all relevant findings and data
gathered in arriving at a precise conclusion based on the
responses obtained from the respondents.
From the findings, two hypotheses were tested, the first
hypothesis, Ho (Null) is based on “The activities of EFCC cannot
Enhance Financial Accountability and Transparency in Nigeria”.
Whereas the alternative supports the contrary from the
responses, it is ascertained, when subjected to percentage test
tool in table 4.9 that 36% of the respondents held Null
hypothesis while 64% held the alternative and likewise in
hypothesis two. The summary of the findings and conclusion
revealed that the Null hypothesis was rejected and the
alternative accepted.
Table 4.3 shows that 60% of respondents said “yes” that
EFCC activities has benefited Nigeria public and private sector
as against 40% who believe the contrary.
Also table 4.4 indicates that overwhelming majority of
respondents (71%) agreed that EFCC has recorded successes
and achievement since its establishment within a shorter period
as against the 25% minority who are indifferent.
The researcher’s findings and analysis were based on the data
collected from questionnaires, personal interview and written
materials, EFCC’s handbooks and journals.
5.2 CONCLUSION
Based on the outcome of the test applied to all relevant
data collected and analyzed on each of the hypothesis,
conclusions were drawn. The result of the test confirmed that
EFCC activities have effectively enhanced financial
accountability and transparency and can also detect and
control financial irregularities in Nigeria.
Therefore, against this backdrop, it is pertinent to
conclude this research work that EFCC has contributed
immensely in the enhancement of accountability and
transparency not only in Nigeria but the world at large.
To buttress this point, according to the World Transparency
International, Nigeria has improved from the last rating of the
most corrupt nation in the world by shifting from 2’ to 31( most
corrupt nation; and this is attributable to the tireless fight
against corruption by Economic and Financial Crimes
Commission (EFCC).
5.3 RECOMMENDATIONS
Based on the constraints faced by the commission and the
result of the analysis, the researcher saw the need to attach the
following recommendations, which will assist to improve the
operations of EFCC in enhancing financial accountability and
transparency in Nigeria.
- Developing Intensified Information Technology: To
facilitate and make the operations of the Commission more
easier, there should be improvement in procurement of
information especially by obtaining more computer equipments
and gadgets, servers, mainframe computer workstation.
- Establishing an integrated data network architecture that
will connect all the department as well as zonal offices and also
training center within the context of its information strategies.
- Training of staff: Training and re-training of the commission
staff, agents and partners is very significant because it will help
enhance and develop competency of her staff and raise
management exports that will assist in achieving her pre-
determined goals.
- Health Care Fraud: This is one of the sensitive sectors of
the economy that needs adequate attention by the commission.
Health Care fraud involves altered or fabricated medical bills
and other documents, excessive or unnecessary treatments
billing schemes like: charging for service more expensive than
the one provided, charging for service that were not provided,
duplication charges, false exaggerated medical disability,
collecting multiple policies for the same illness or injury etc. the
large number of patient treatments and complex billing
practices attracts criminals skilled in victimizing people by
Committing fraud. The Nigeria health system can only be free of
these hazards when the commission set up a national initiative
to pursue, investigate and prosecute individuals/corporate
entities perpetrating this fraud. The commission should also
partner with minister of health, NAFDAC, NDLEA and other
partners to rejuvenate the health care system.
- Capacity Building: Capacity building requires
maintenance of vigorous database, which assist in generating
primary data on economic and financial matters. The ability to
capture, process, stores and retrieves data at different locations
including operators in their money and capital market.
Also further investigation should be undertaken especially in
the Banking sector in the area of corporate frauds such as
accounting scheme, self dealing by corporate executives and
obstruction of justice to conceal illegal activities from criminal
and regulatory authorities.
IBLIOGRAPHY
Ajaro, C. (2004): In the Eyes of EFCC, New Swatch Computers;
Communication Centre. Dariye, Nyame Join ,Kalu, Turaki, in Prison, Vanguard, vol. 23
No 60374, front page & P. 15. Economic and Financial Crimes Commission EFCC (2004):
Information Handbook 1, Jexcel Commercial and Securities Printers; EFCC, Pp 1-5.
“EFCC made me cry”, (2007): Journal of EFCC (zero tolerance),
4th April, vol. 1. No4. “On the Run”, Journal of EFCC (zero tolerance, Dec. 2, (2007): vol. 2.
EFCC (2004): Establishment Act.
EFCC (2004): Money Laundering and Prohibition Act.
Egbebor, A. (2005): Corruption Has Destabilized Our Society, Ventral Press and Printing Ibrahim.
Federal Bureau of Investigation FBI, (2006): Financial and
Economic Crimes, FBI, www.google.com. Howared, S. et al (2005): Techniques and strategies for Detection
of Fraud: John Wely & Sons, Inc. Hoboker, New Jersey. Idika, C.O and et al (2001): Anti-Corruption Advocacy Handbook
(fix Nigeria initiative), Talab Global view Ltd. Ise, O.I, I’m ready to return loot, (2007), Vanguard, vol.23: No 6,
July, 23 front Page & P. 15. Koletar, J.W. (2003): Fraud Exposed: John Wiley & Sons, mc;
Hoboker, New Jersey.
Nigeria Financial Intelligent unit information Handbook: (2007): “Public Service Corruption, The New Offensive,” journal of EFCC (Zero tolerance) Jan. 3, vol. 1 No. 3.
Onyesanya, (2004): A Performance Review of EFCC and NCNF,
www.nigeriavillaeaguar.com
Oxford Dictionary, Advanced learning Dictionary, 6 Edition. Ribadu, N.M (2006), Interim Investigation Report on Cases of
Financial Misappropriation and money laundering against some States and local government, presentation of Senate; Pp 1-2.
Richard, A. & et al (1989): Investigation for Determination of
Facts, New York; MC Graw Hills. The Nigeria Capital Market; Developments, Investment Options,
Players, Prospects, Challenges, produced by Research and Market Dev. Dept (SEC).
APPENDIX A
Department of Accountancy, University of Nigeria, Enugu Campus. 5th October, 2011. Dear Respondent,
LETTER OF INTRODUCTION
The researcher is an MBA student of the aforementioned
institution and department. As part of my requirement for MBA
honors in accountancy, the attached research instrument is
structured to solicit your candid view and opinion on a study
specially designed to look into “The Activities of EFCC and How
these can Enhance Financial Accountability and Transparency
in Nigeria”.
The researcher will be grateful if you can dispassionately
complete the form to the best of your ability. Any information
given is strictly for academic purpose only.
Thank you in anticipation of your full co-operation.
Yours faithfully,
Nzejekwu Ifeyinwa Anene (The Researcher)
APPENDIX B
SAMPLE OF QUESTIONAIRE
SECTION A
Please go through the questions and tick (q) to the appropriate
answer as “Yes” or “No” in the following:
1. Sex:
(a) Male [ ]
(b) Female [ ]
2. Marital Status:
(a) Single [ ]
3. Organization under employment
(a) EFCC LAGOS [ ]
(b) EFCC ENTJGU [ ]
(c) NEPA (PHCN) ENUGU [ ]
4. How long have you worked with the organization?
(a) 1 Month - 6 months [ ]
(b) 1 Month - 1 year [ ]
(c)1 year and above [ ]
5. What is your educational qualification?
(a) 0- Level [ ]
(b) OND [ ]
(c) HND [ ]
(d) B.Sc [ ]
(e) MBA/ M.Sc [ ]
(f) Ph.D [ ]
SECTION B
How far has EFCC gone in enhancing financial accountability
and transparency?
(a) Very well [ ]
(b) Not very well [ ]
2. How has EFCC been carrying out her mandate/functions?
(a) Very effectively [ ]
(b) Effectively [ ]
(c) Ineffectively [ ]
3. Has EFCC helped in sanitizing both the public and private
sector of the economic in Nigeria?
(a) Very well [ ]
(b) Not very well [ ]
4. Has the activities of EFCC reduce financial and economic
crimes in Nigeria economy?
(a) Strongly agreed [ ]
(b) Agreed [ ]
(c) Strongly disagreed [ ]
(d) Disagreed [ ]
5. Can EFCC sanitize the Nigeria Economy through
Accountability?
(a) Yes [ ]
(b) No [ ]
(c) No Idea [ ]
6. Has EFCC activities benefited Nigerians?
(a) Yes [ ]
(b) No [ ]
(c) No Idea [ ]
7. How has banks in Nigeria assisted EFCC in sanitizing the
banking sector?
(a) Very well [ ]
(b) Just well [ ]
(c) Not well [ ]
8. Can transparency, Accountability and stewardship of
resources be restored in Nigeria through EFCC?
(a) Yes [ ]
(b) No [ ]
(c) No Idea [ ]
9. Are EFCC adequately financed?
(a) Yes [ ]
(b) No [ ]
(c) No Idea [ ]
10. Does government interfere iii the operations of EFCC?
(a) Yes [ ]
(b) No [ ]
(c) No Idea [ ]
11. Does EFCC investigation terrorism activities?
(a) Yes [ ]
(b) No [ ]
(c) No Idea [ ]
12. Has EFCC recorded any success or achievement since its
establishment?
(a) Yes [ ]
(b) No [ ]
(c) No Idea [ ]
13. Are there any challenges/constraints faced by EFCC in
executing her mandates?
(a) Yes [ ]
(b) No [ ]
(c)No Idea [ ]