NIGERIA Country Profile

Licences, Infrastructure and Public Utilities

Business Corruption

Infrastructure in general and electricity provisions in particular are inadequate in Nigeria, with the result being that many companies and households are forced to operate their own generators. Moreover, according to the World Bank & IFC Enterprise Surveys 2007, companies report that public utilities services in Nigeria are rife with corruption.

Obtaining construction permits can be very problematic, and the licences and inspections system is pervaded by corrupt practices. The process varies considerably across jurisdictions.

Global Integrity 2006 reports that officers at the Corporate Affairs Commission demand bribes, and if a bribe is not paid, the registration process may be delayed, sometimes beyond a month.

Political Corruption

In June 2008, the Economic and Financial Crimes Commission (EFCC) arrested two former ministers of aviation following a Senate probe into the approximately USD 166 million Aviation Intervention Fund. The ministers were charged with conspiracy and diversion of public funds for inflating a USD 55,000 contract, according to the US Department of State Human Rights Report 2008. Trials for both defendants remained pending at year's end.

In July 2008, the former managing director of Triumph Bank, Francis Atoju, was arrested and brought before a Federal High Court in Lagos on charges of corruption filed by the Economic and Financial Crimes Commission. Together with a Lagos-based lawyer Jude Idigbe, he was accused of allegedly granting unauthorised loans of about USD 5.2 million to customers of the bank, according to Transparency International's Global Corruption Report 2009. In addition, Atoju and Idigbe were accused of conspiring to make an unlawful and unauthorised grant of an overdraft facility of USD 1.4 million to Idigbe and his company, Lushann Enternit Energy Limited. As of January 2010, the case was still pending in court.

In December 2009, the EFCC reported that it had brought additional charges against the former head of Bank PHB in one of several money laundering case following a USD 4 billion banking sector bailout. Atuche and the bank's executive director are being tried for granting a USD 3 billion credit facility without any collateral, according to a December 2009 article by Reuters.

Frequency

The World Bank & IFC: Doing Business 2010:
- Starting a company in Nigeria requires the entrepreneur to go through 8 procedures, taking 31 days and costing 76.7% of income per capita.

- On average, it takes a company 18 procedures, 350 days at a cost of 573% of income per capita to build a warehouse.

- It takes an average of 2 years to close a business at a cost of 22% of the estate.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give government administrative requirements (permits, regulations, reporting) a score of 3.1 on a 7-point scale (1 'extremely burdensome' and 7 'not burdensome at all').

Transparency International: Global Corruption Barometer 2009:
- Respondent citizens give public officials and civil servants a score of 3.4 on a 5-point scale (1 'not at all corrupt' and 5 'extremely corrupt').

- 21% of households who had contact with registry and permit services in 2008 report to have paid a bribe.

- 17% of households who had to obtain public utilities in 2008 report to have paid a bribe.

Afrobarometer: Summary of Results Nigeria 2008:
- 39% of the surveyed citizens believe that most public officials are involved in corruption.

Transparency International: Bribe Payers Index 2008:
- Business executives give the registry and permit services a score of 3.9 on a 5- point scale (1 'not at all corrupt' and 5 'extremely corrupt').

The World Bank & IFC: Enterprise Surveys 2007:
- 40% of companies expect to give gifts to get an operating licence.

- 53% of companies expect to give gifts to get a construction permit.

- 39%, 33% and 24% of companies expect to give gifts to get an electrical connection, a water connection and a phone connection respectively.