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NIGERIA’S STRUGGLE WITH CORRUPTION

HEARING

BEFORE THE

SUBCOMMITTEE ON AFRICA, GLOBAL HUMAN 

RIGHTS AND INTERNATIONAL OPERATIONS

OF THE

COMMITTEE ON 

INTERNATIONAL RELATIONS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

MAY 18, 2006

Serial No. 109–172

Printed for the use of the Committee on International Relations

(

Available via the World Wide Web: http://www.house.gov/international—relations 

(II)

COMMITTEE ON INTERNATIONAL RELATIONS 

HENRY J. HYDE, Illinois, Chairman 

JAMES A. LEACH, Iowa 

CHRISTOPHER H. SMITH, New Jersey, 

Vice Chairman 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

EDWARD R. ROYCE, California 

PETER T. KING, New York 

STEVE CHABOT, Ohio 

THOMAS G. TANCREDO, Colorado 

RON PAUL, Texas 

DARRELL ISSA, California 

JEFF FLAKE, Arizona 

JO ANN DAVIS, Virginia 

MARK GREEN, Wisconsin 

JERRY WELLER, Illinois 

MIKE PENCE, Indiana 

THADDEUS G. MCCOTTER, Michigan 

KATHERINE HARRIS, Florida 

JOE WILSON, South Carolina 

JOHN BOOZMAN, Arkansas 

J. GRESHAM BARRETT, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL MCCAUL, Texas 

TED POE, Texas 

TOM LANTOS, California 

HOWARD L. BERMAN, California 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

SHERROD BROWN, Ohio 

BRAD SHERMAN, California 

ROBERT WEXLER, Florida 

ELIOT L. ENGEL, New York 

WILLIAM D. DELAHUNT, Massachusetts 

GREGORY W. MEEKS, New York 

BARBARA LEE, California 

JOSEPH CROWLEY, New York 

EARL BLUMENAUER, Oregon 

SHELLEY BERKLEY, Nevada 

GRACE F. NAPOLITANO, California 

ADAM B. SCHIFF, California 

DIANE E. WATSON, California 

ADAM SMITH, Washington 

BETTY MCCOLLUM, Minnesota 

BEN CHANDLER, Kentucky 

DENNIS A. CARDOZA, California 

RUSS CARNAHAN, Missouri 

THOMAS E. MOONEY, SR., Staff Director/General Counsel 

ROBERT R. KING, Democratic Staff Director 

SUBCOMMITTEE ON AFRICA, GLOBAL HUMAN RIGHTS AND INTERNATIONAL

OPERATIONS

CHRISTOPHER H. SMITH, New Jersey, Chairman 

THOMAS G. TANCREDO, Colorado 

JEFF FLAKE, Arizona 

MARK GREEN, Wisconsin 

JOHN BOOZMAN, Arkansas 

JEFF FORTENBERRY, Nebraska 

EDWARD R. ROYCE, California, 

Vice Chairman 

DONALD M. PAYNE, New Jersey 

GREGORY W. MEEKS, New York 

BARBARA LEE, California 

DIANE E. WATSON, California 

BETTY MCCOLLUM, Minnesota 

EARL BLUMENAUER, Oregon 

MARY M. NOONAN, Subcommittee Staff Director 

GREG SIMPKINS, Subcommittee Professional Staff Member 

NOELLE LUSANE, Democratic Professional Staff Member 

SHERI A. RICKERT, Subcommittee Professional Staff Member and Counsel 

LINDSEY M. PLUMLEY, Staff Associate 

(III)

C O N T E N T S 

Page

WITNESSES 

Ms. Linda Thomas-Greenfield, Deputy Assistant Secretary, Bureau of African 

Affairs, U.S. Department of State ...................................................................... 8

Mr. Nuhu Ribadu, Executive Chairman, Economic and Financial Crimes 

Commission, Federal Republic of Nigeria .......................................................... 24

Mr. David Goldwyn, President, Goldwyn International Strategies ..................... 39

George B.N. Ayittey, Ph.D., Distinguished Economist in Residence, American 

University ............................................................................................................. 46

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Christopher H. Smith, a Representative in Congress from 

the State of New Jersey, and Chairman, Subcommittee on Africa, Global 

Human Rights and International Operations: Prepared statement ................ 3

Ms. Linda Thomas-Greenfield: Prepared statement ............................................. 10

Mr. Nuhu Ribadu: Prepared statement ................................................................. 28

Mr. David Goldwyn: Prepared statement .............................................................. 42

George B.N. Ayittey, Ph.D.: Prepared statement .................................................. 50

(1)

NIGERIA’S STRUGGLE WITH CORRUPTION 

THURSDAY, MAY 18, 2006

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON AFRICA, GLOBAL HUMAN RIGHTS

AND INTERNATIONAL OPERATIONS,

COMMITTEE ON INTERNATIONAL RELATIONS, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:05 p.m. in room 

2172, Rayburn House Office Building, Hon. Christopher H. Smith 

(Chairman of the Subcommittee) presiding. 

Mr. SMITH OF NEW JERSEY. The Subcommittee will come to order 

and good afternoon everybody. When Nigeria became an independent nation on October 1st, 1960, that development was seen as 

a major leap forward for Africa. Its most populous nation would 

now govern itself and use its tremendous natural and human resources for the benefit of its more than 100 million citizens, and 

the rest of Africa would enjoy at least residual benefits. Unfortunately, Nigeria’s blessings have not proved to be as widespread as 

was hoped. 

This great nation has gained a reputation for corruption that is 

difficult to overcome. It is not the only nation consistently ranked 

high on Transparency International’s Corruption Perceptions 

Index; however the reach of Nigeria’s fraud peddlers exceeds that 

of most other nations. Many of us who use the Internet have received solicitations to claim foreign funds abandoned in some foreign bank account. These schemes, known as 419 scams after the 

provision in the Nigerian law outlawing them, are among the 

issues often cited by those who know little else about Nigeria. 

There are numerous accounts of retirees and even churches losing 

many thousands of dollars when Internet users respond to these 

fraudulent requests. Those who try to obtain someone else’s money 

are as criminal as those who initiate the scam. 

Moreover, the Nigerian Government has made a serious effort to 

address this problem. At the heart of corruption in Nigeria, however, are those who wield government authority. According to a report done by Nigeria’s Economic and Financial Crimes Commission 

last year, the country’s excessive government stole or misused 

about $400 billion during the last four decades of the 20th century. 

That amount is about equal to all of the aid given to Africa by 

Western donors during the same period of time. 

Nigeria’s people are those who overwhelmingly suffer as a result. 

According to the World Bank, with Nigeria’s large reserve of 

human and natural resources, it has the potential to build a prosperous economy, reduce poverty significantly, and provide the 

2

health, education and infrastructure services its population deserves and needs. However, despite the country’s relative oil 

wealth, poverty remains widespread. About 37 percent of the population lives in extreme poverty. 

Testimony in prior congressional hearings has cited corruption as 

Nigeria’s biggest single problem. It has not only sapped public trust 

in government, but it has cost the government and the people of 

Nigeria billions due to corrupt management of public companies, 

unrealized public projects and deteriorated infrastructure caused 

by looted maintenance budgets. 

One of the earliest government scams was the cement scandal of 

the early 1960s in which a grand public housing plan was announced where vast quantities of cement were purchased from foreign contractors, but far more cement was ordered than was needed. Overloaded Nigerian ports saw ships loaded with cement 

backed up for miles out to sea. Corrupt officials made profits, however, from selling cement import licenses. But the promised housing was never constructed on the scale that had been envisioned. 

Another 1960s scandal involved an aluminum smelter that was 

supposed to be part of the industrialization of Nigeria. Unfortunately, corrupt manipulators drove the cost of the smelter up to 

$2.4 billion, which was 60 to 100 percent higher than comparable 

plants elsewhere in the developed world. Once completed, the 

smelter never operated above a fraction of its capacity. 

More recently, in 2003, a commission of inquiry was appointed 

to investigate the collapse of Nigerian Airways. That commission 

found that former top airline officials, Federal cabinet members 

and high-ranking civil servants were to blame for the nation’s airlines collapse through waste and misappropriation of funds. 

One of the hallmarks of Nigerian corruption is that top officials 

most responsible for the looting of public enterprises are almost 

never punished for their crimes or forced to return the funds that 

they have stolen. Even President Obasanjo, who is seen as a campaigner for transparency, has failed to bring to justice the many 

corrupt officials who have yet to answer for their crimes. 

Corruption in Nigeria squanders the vast resources available to 

this nation and has been a factor in the country’s brain drain as 

well. 

Tens of thousands of Nigerian professionals have immigrated to 

America and other developed countries, where they can operate in 

environments in which those who loot their companies or steal government funds can expect prosecution. Even the officers of Fortune 

500 companies such as Enron and WorldCom have faced prosecution, no matter how slow the process. 

Fortunately, transparency in Nigeria seems to be catching on. 

After failing to successfully tackle corruption with the Independent 

Corrupt Practices Commission, the Nigerian Government in 2003 

created the Economic and Financial Crimes Commission. Its initially limited mandate which focused on 419 fraud and other business crime now appears to include government corruption as well. 

Government actions in pursuit of greater transparency seem to 

indicate a renewed commitment to attacking high-level corruption. 

In December 2003, several prominent cabinet members were removed, and former ranking members of the ruling party were arVerDate Mar 21 2002 12:05 Jul 17, 2006 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 F:\WORK\AGI\051806\27648.000 HINTREL1 PsN: SHIRL
3

rested, following investigation into the questionable national ID 

card scheme that year. 

As positive as this development and subsequent arrests and indictments are, the fact remains that too many high-ranking officials are either not prosecuted or are merely fired. Without accountability, no transparency program can be considered a success. 

Those who violate the public trust must be prosecuted and made 

to return the money they have stolen. 

Corruption in Nigeria is not merely a problem for that country. 

Over the past two decades, fraud in programs designed to develop 

the oil-rich Niger Delta have left its residents bitter and frustrated 

and lacking in faith for reforms offered by their government. Every 

oil company official kidnapped or killed and every pipeline ruptured threatens global energy supplies and drives up the price of 

oil worldwide. Nigerians cannot afford continued fraud, and neither 

can the rest of the world. 

The recent audit of Nigeria’s oil industry as part of its commitment to the Extractive Industries Transparency Initiative is a good 

sign that the Nigerian Government realizes that accountability 

must be established. 

We can only hope that this will lead to greater accountability for 

those high-ranking officials who continue to enjoy immunity from 

prosecution and the fruits of their theft. 

The Nigerian Government must understand that their people are 

watching and the rest of the world as well. 

I yield to my friend and colleague, Mr. Payne. 

[The prepared statement of Mr. Smith follows:]

PREPARED STATEMENT OF THE HONORABLE CHRISTOPHER H. SMITH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY AND CHAIRMAN, SUBCOMMITTEE ON AFRICA, GLOBAL HUMAN RIGHTS AND INTERNATIONAL OPERATIONS

When Nigeria became an independent nation on October 1, 1960, that development was seen as a major leap forward for Africa. Its most populous nation would 

now govern itself and use its tremendous natural and human resources for the benefit of its more than 100 million citizens, and the rest of Africa would enjoy at least 

residual benefits. Unfortunately, Nigeria’s blessings have not proved to be as widespread as was hoped. 

This great nation has gained a reputation for corruption that is difficult to overcome. It is not the only nation consistently ranked high on Transparency International’s corruption perception index. However, the reach of Nigerian fraud peddlers exceeds that of most other nations. 

Many of us who use the Internet have received solicitations to claim a fortune in 

funds abandoned in some forgotten bank account. These schemes—known as ‘‘419’’ 

scams after the provision in Nigerian law outlawing them—are among the issues 

often cited by those who know little else about Nigeria. There are numerous accounts of retirees, and even churches, losing many thousands of dollars by responding to these fraudulent requests, but those who try to obtain someone else’s money 

are as criminal as those who initiate the scam. Moreover, the Nigerian government 

has made a serious effort to address this problem. 

At the heart of corruption in Nigeria, however, are those who wield government 

authority. According to a report done by Nigeria’s Economic and Financial Crimes 

Commission last year, the country’s successive governments stole or misused about 

$400 billion during the last four decades of the 20th century. That amount is about 

equal to all the aid given to Africa by Western donors during the same period. 

Nigeria’s people are those who overwhelmingly suffer. According to the World 

Bank, with Nigeria’s large reserves of human and natural resources, it has the potential to build a prosperous economy, reduce poverty significantly, and provide the 

health, education, and infrastructure services its population needs. However, despite 

the country’s relative oil wealth, poverty is widespread—about 37% of the population lives in extreme poverty. 

4

Testimony in prior congressional hearings has cited corruption as Nigeria’s biggest single problem. It has not only sapped public trust in government, but it has 

cost the government and the people of Nigeria billions due to corrupt management 

of public companies, unrealized public projects and deteriorated infrastructure 

caused by looted maintenance budgets. 

One of the earliest government scams was the cement scandal of the early 1960s, 

in which a grand public housing plan was announced, and vast quantities of cement 

were purchased from foreign contractors. But far more cement was ordered than 

was needed, and overloaded Nigerian ports saw ships loaded with cement backed 

up for miles out to sea. Corrupt officials made profit from selling cement import licenses, but the promised housing was never constructed on the scale that had been 

envisioned. 

Another 1960s scandal involved an aluminum smelter that was supposed to be 

part of the industrialization of Nigeria. Unfortunately, corrupt manipulations drove 

the cost of the smelter up to $2.4 billion, which was 60–100% higher than comparable plants elsewhere in the developed world. Once completed, the smelter never 

operated above a fraction of its capacity. 

More recently, in 2003, a commission of inquiry was appointed to investigate the 

collapse of Nigerian Airways. That commission found that former top airline officials, federal cabinet members and high-ranking civil servants were to blame for the 

national airline’s collapse through waste and misappropriation of funds. 

One of the hallmarks of Nigerian corruption is that the top officials most responsible for looting public enterprises are almost never punished for their crimes or 

forced to return the funds they’ve stolen. Even President Obasanjo, who is seen as 

a campaigner for transparency, has failed to bring to justice the many corrupt officials who have yet to answer for their crimes. Nigerian officials can and should go 

after the late dictator Sani Abacha and seize his ill-gotten wealth. But they also 

must not exempt from justice other former leaders, who are not only shielded from 

prosecution, but even now are considering running again for the Presidency of Nigeria. 

Corruption in Nigeria squanders the vast resources available to this nation and 

has been a factor in this country’s brain drain. Tens of thousands of Nigerian professionals have immigrated to America and other developed nations where they can operate in environments in which those who loot their companies or steal government 

funds can expect prosecution. Even the officers of companies such Fortune 500 companies as Enron and WorldCom have faced prosecution, no matter how slow the 

process. 

Fortunately, transparency in Nigeria seems to be catching on. After failing to successfully tackle corruption with the Independent Corrupt Practices Commission, the 

Nigerian government in 2003 created the Economic and Financial Crimes Commission. Its initially limited mandate, which focused on ‘‘419’’ fraud and other business 

crime, now appears to include government corruption as well. 

Government actions in pursuit of greater transparency seem to indicate a renewed 

commitment to attacking high-level corruption. In December 2003, several prominent cabinet members were removed and a former ranking member of the ruling 

party was arrested following an investigation into the questionable national ID card 

scheme that year. As positive as this development and subsequent arrests and indictments are, the fact remains that too many high-ranking officials are either not 

prosecuted or are merely fired. Without accountability, no transparency program 

can be considered a success. Those who violate the public trust must be prosecuted 

and made to return the monies they have stolen. 

Corruption in Nigeria is not merely a problem for that country. Over the past two 

decades, fraud in programs designed to develop the oil-rich Niger delta region have 

left its residents bitter and frustrated and lacking in faith in reforms offered by 

their government. Every oil company official kidnapped or killed and every pipeline 

ruptured threatens global energy supplies and drives up the price of oil worldwide. 

Nigerians cannot afford continued fraud, and neither can the rest of the world. 

The recent audit of Nigeria’s oil industry as part of its commitment to the Extractive Industries Transparency Initiative is a good sign that the Nigerian government 

realizes that accountability must be established. We can only hope that this will 

lead to greater accountability for those high-ranking officials who continue to enjoy 

immunity from prosecution and the fruits of their theft. The Nigerian government 

must understand that their people are watching, and the rest of the world is too.

Mr. PAYNE. Thank you very much. Thank you for calling this 

very important hearing. The issue of corruption in Nigeria is very 

timely. And we look forward to the witnesses and their testimony. 

5

As it has been indicated by the Chairman, and as we know, Nigeria is a major United States ally, a regional leader economically 

and in terms of mediating conflicts and peacekeeping and in terms 

of its supply of energy to the United States. 

Besides being the most populous country on the continent, it is 

only twice the size of the State of California, although it has 132 

million people living in its borders. 

Nigeria is composed of over 250 different ethnic groups, the largest of these groups, the Hausa, Fulani, Yoruba and Ibo. And although English is the official language there, there are at least four 

other major languages and dozens and dozens of more dialects that 

are spoken in this country. And so this is a country that is large 

and difficult to manage. This country is about 50 percent Muslim, 

40 percent Christian and about 10 percent in traditional beliefs. 

Suffice to say, Nigeria is a country of great diversity which has 

led to severe ethnic and religious tensions and great—and a nation 

of great wealth and oil and gas which has tragically led to abject 

poverty and unrest. 

As I indicated, it is a country that has been very helpful in mediating conflicts. When the conflict in Liberia broke out initially, 

under ECOWAS, Nigeria went in to stabilize Liberia before Taylor 

took over. 

Following the situation in Liberia, Nigeria was called to go to Sierra Leone to fight the RUF and Foday Sankoh and those brutal 

terrorists who chopped off limbs of children and wreaked havoc on 

their population, and once again, it was leadership of the Nigerians 

that went in recently into Sao Tome and Principe, the government 

was almost overtaken by a planned coups d’etat, but it was Nigeria’s President Obasanjo who sent word to Sao Tome and Principe 

that they needed to go back into the barracks, and there would not 

be a military takeover because of the newly found oil in the Gulf 

of Guinea. And that was settled. And even in Togo, where the son 

of the President decided that he would take the leadership of the 

country without due elections, it was Nigerian President Obasanjo 

who said there is a process and you cannot become President because your father has died. There is a process, and the process won 

out. 

And so we have a regional leader that has done tremendous good 

on the continent. And as we know, with the dependence on oil, 20 

percent of oil from Africa will be consumed in the United States, 

and it is the crude, that is the sweet crude, it is called, which is 

the most valuable oil. 

And so we do have a country that is very significant and important. 

This is a nation which we simply cannot ignore. In fact, the 

United States relies on Nigeria and has strong interests in its welfare and that of other Gulf of Guinea States in particular due to 

our dependence, as I mentioned, on their natural resources, cooperation of African governments and the United States global 

fight against terrorism, Nigeria has been very helpful in the need 

to work jointly in the struggle to prevent the further spread of HIV 

and AIDS and the increasing number of Americans who are of African birth, many, many Nigerians, tremendous number of physicians in the United States who are originally from Nigeria. 

6

According to a Bank of America report in 2005, Africa surpassed 

the Middle East in United States oil imports at close to 19 percent. 

Nigeria, of course, provides the lion’s share, and as we always look 

at oil, we feel that it is the Middle East. But that was yesterday, 

and today it is Africa. 

Nigeria’s oil boom of the 1970s led to the neglect of the agricultural sector and contributed to urbanization, an overwhelming 

trend we are seeing throughout the continent at an alarming rate. 

And that is something we need to encourage—and I asked the 

USAID—to encourage Nigeria to get back into the agricultural sector. They can not only do two crops a year, they can do three crops 

a year in some places. And this can be a tremendous boom to their 

economy. However, people have left the rural areas, and urbanization has become a strangle hold around cities. Communities in the 

Niger Delta oil-producing region have felt left out of the benefits 

of Nigeria’s oil wealth because, despite Nigeria’s growing oil 

wealth, the region has seen little development and bears the brunt 

of the detrimental environmental impact caused by the oil industry. 

Since Nigeria’s independence from Britain in 1960, it has been 

plagued by political and economic crises at different intervals. In 

1999, after 16 years of military rule which was particularly brutal 

under the leadership of General Sani Abacha, who died in 1998, 

Nigeria adopted a new constitution and transitioned into a civilian 

government under General Abubakar who was the one who decided 

it was time to rid the country of military dictators. 

The current President Obasanjo was elected in 1999 and again 

in 2003. 

He has done a great deal, but there is criticism about the poor 

economic conditions that have continued under his tenure, and 

there is much debate over the third term presidency issue which 

interestingly enough was struck down by the Nigerian Senate on 

Tuesday, which really shows democracy at work, and hopefully, 

that will be able to be enforced. 

I mention the history briefly because it is impossible to talk 

about corruption without talking about General Sani Abacha who 

is believed to have stolen over $3 billion during his brutal 5-year 

reign. His security adviser was accused of stealing close to $3 billion from the Nigerian Central Bank. Some of the funds stolen 

under Abacha are still in Swiss banks; though, in recent years, 

about $64 million was returned, and the Abacha family has agreed 

to return $1 billion. But the damage done to the Nigerian people 

and to the fabric of Nigerian society is still there. 

Corruption is still a major problem in Nigeria, in the private sector and in the government, and in response, President Obasanjo 

lost an anti-corruption campaign. In the past year alone, at least 

three ministers have been fired as a result of the United States, 

and the SEC is investigating an allegation of bribery, a case with 

the Nigerian Natural Gas Project involving foreign countries, 

France, Italy, and the United States Halliburton subsidy, Chicago 

Bridge & Iron. 

So we see too many hands are involved in the corruption in Nigeria, and we need to wipe it all out. 

7

As I conclude, this is a reminder that while we encourage our allies to root out corruption, we must also make sure that we deal 

properly with the corruptors. All eyes are on Nigeria right now as 

the third term debate continues in lead up to the 2007 elections. 

This is a critical time for Nigeria, and I am encouraging strong, effective and fair engagement by our Government. We must look beyond our oil interests and invest more in education, agriculture, 

health in Nigeria, particularly for the people of the Niger Delta and 

the other poor regions of the country. 

Thank you very much, Mr. Chairman. 

Mr. SMITH OF NEW JERSEY. Thank you. 

Ms. Lee. 

Ms. LEE. Thank you, Mr. Chairman. 

I want to thank you and our Ranking Member for this very important hearing, and I want to welcome our witnesses here today. 

And I want to associate myself with the remarks of our Ranking 

Member and just make couple of additional points. 

Yes, we all recognize that Nigeria has faced numerous challenges 

in its path toward democracy, human rights and investment in people, and there are still many challenges to overcome. 

Nigeria has 70 percent of its population living on a dollar a day, 

and 91 percent live on less than $2 a day. 

In Africa, on a per capita basis—it is one of the poorest countries 

in the world actually, but it is the second country in Africa, that 

is the second in terms of per-capita that is one of the richest countries. 

So this doesn’t make much sense. And so, given the vast oil reserves and given the fact that it is the fifth top supplier to the 

United States, I for the life of me can’t figure out why many don’t 

benefit from really the wealth that Nigeria really has in terms of 

oil wealth. 

We spend a lot of, in terms of our companies spend quite a bit 

with regard to oil in the region, and I am not sure what the impact 

of these expenditures are on the people of Nigeria. 

Finally, let me just say, I remember on one visit to Nigeria, we 

were talking about the whole issue of corruption. And certainly we 

have got to figure out what that is about, because it further inhibits the government’s ability to serve people, and this hearing is focused on that. I know, however, that it takes two to tango, and in 

the private sector, when I was in Nigeria, we talked about those 

companies for example that are trying to make a quick buck, whose 

companies that see Nigeria as an opportunity, and it is an opportunity in terms of its oil wealth. But if in fact we have had any 

kind of charges or allegations of multinational companies really 

violating anti-corruption laws, as it relates to Nigeria, because we 

have got to root out corruption wherever we find it. And certainly, 

when there is corruption, some go to places where they know corruption exists, and they very clearly engage in that with those 

countries. 

And so I would like to get a sense from you of how you see that 

as it relates to multinational companies, especially any companies 

from the United States. Thank you, very much. 

Mr. SMITH OF NEW JERSEY. Thank you, Ms. Lee. 

8

It is now my privilege to welcome on the Committee Ms. Linda 

Thomas-Greenfield who was appointed Deputy Assistant Secretary 

in the State Department’s Bureau for African Affairs in January 

2006. Prior to this, she served as the Deputy Assistant Secretary 

in the Bureau of Population Refugees and Migration. Her Africafocused assignments include Nigeria Gambia and Kenya. 

Ms. Thomas-Greenfield was the 2000 recipient of the Warren 

Christopher Award For Outstanding Achievement in Global Affairs. 

Ms. Secretary, the floor is yours. 

STATEMENT OF MS. LINDA THOMAS-GREENFIELD, DEPUTY ASSISTANT SECRETARY, BUREAU OF AFRICAN AFFAIRS, U.S. 

DEPARTMENT OF STATE 

Ms. THOMAS-GREENFIELD. Thank you, Mr. Chairman, and thanks 

to all the Members of the Subcommittee for inviting us here. I am 

very honored to testify before you here today. If you will allow me, 

I will summarize my testimony and request that the written statement be entered for the record. 

Mr. SMITH OF NEW JERSEY. Without objection, your full statement will be made a part of the record. 

Ms. THOMAS-GREENFIELD. Thank you. 

United States policy goals in Nigeria are strengthened social stability through pluralism, democracy and good governance, to promote market-led economic growth as the best means to reduce poverty in a sustainable way and to enhance Nigeria’s ability to act 

as a responsible, regional and bilateral strategic and trade partner. 

Combatting corruption and improving transparency are two cornerstones of this policy. The United States raises this issue at the 

highest levels of the Government of Nigeria both in Abuja and in 

meetings here in Washington. Evenhanded and transparent prosecution of corrupt politicians strengthens Nigeria’s democracy by 

holding public officials accountable. Good governance reinforces effective use of public and donor resources and encourages increased 

investment in growth in Nigeria. Nigeria’s President Obasanjo and 

Finance Minister Ngozi have done much at the national level to improve Federal public expenditure management. More clearly needs 

to be done, especially at the state government level. 

We strongly support greater transparency in the budget process 

to lock in economic reform. 

And on this account, we commend minister Ngozi for her decision—and it was a brave one—to make public for the first time the 

national and state budgets. 

We also are assisting Nigeria in its anti-corruption efforts 

through the Africa Growth and Opportunity Act, the U.S.-Nigeria 

Trade Investment Framework Agreement, support for the African 

Union Peer Review Process and also through the G–8. 

At the Evian summit in June 2003, the G–8 endorsed a comprehensive anti-corruption and transparency action plan that included a commitment to help developing countries build their capacity to strengthen domestic institutions and enhance transparency and accountability. 

President Bush expanded on this at the Sea Island Summit by 

joining President Obasanjo and launching an anti-corruption and 

9

transparency compact to support efforts to improve transparency in 

the government budget process, procurement and the awarding of 

concessions. 

The United States is working closely with Nigeria, a co-member 

of the International Advisory Group of the Extractive Industries 

Transparency Initiative. Nigeria is playing an important role, having volunteered to pilot the new disclosure and validation methodologies and has just completed a comprehensive audit of oil sector payments and government revenues for the period 1999 to 

2004. 

Our anti-corruption efforts with Nigeria represent a true international partnership. We are working together with Nigeria’s law 

enforcement agencies to improve international financial regulations. 

If the international community joins forces to combat financial 

crime in Nigeria, we will see important benefits from a reduction 

in the diversion of resources and in 419 e-mail scams and in more 

effective action to block other criminal finance schemes. In accordance with standards established by the Financial Action Task 

Force, the international standard-setting body, Nigeria is working 

toward implementing an effective national regime for combatting 

all source money laundering and finance of terrorism. 

Corruption affects many aspects of the business climate in Nigeria. 

By improving economic governance, Nigeria can set itself on the 

path toward attracting new investment and achieving sustainable 

economic growth. 

The Nigerian Government’s struggle against corruption is a crucial element in our efforts to promote sustainable development in 

the Niger River Delta. The region is deeply impoverished and subject to destabilizing violence. We are working in partnership with 

the Nigerian Government, the United Kingdom, oil companies and 

other stakeholders to strengthen rule of law in this crucial region. 

On April 28th, we met in Washington for the third round of discussions on addressing energy security in the Niger Delta through 

community development, improved coastal security and increased 

control of financial crimes and small arms trafficking. Combatting 

crime is a crucial element of restoring law and order in the oil-rich 

Niger Delta. This includes the critical needs for community police 

and training to ensure respect for human rights and to increase 

public trust, confidence and cooperation with Nigerian security 

forces. 

Democracy promotion is our foremost policy objective. Corruption 

undermines democracy in Nigeria. 

Good governance and accountability builds trust in the democratic system and elected officials. 

It is important for Nigerians to see their elected officials held accountable for wrong doing if the rule of law and accountable democratic government are going to flourish in Nigeria. 

The 2007 Presidential and legislative elections in Nigeria pose a 

unique opportunity for democratic consolidation. 

Members of the Nigerian House and Senate, as Mr. Payne mentioned, recently voted again, against the constitution national 

amendment that would have allowed the President to run for a 

10

third term, despite reports of votes being bought to influence its 

passage. Notwithstanding the controversy surrounding this contentious issue, the greatest United States concern regarding corruption and democracy in Nigeria is that serious work remains to be 

done to realize genuinely transparent and legitimate elections in 

2007. 

The National Democratic Institute Assessment Team that visited 

Nigeria in May shed light on some of the areas requiring improvement. The department will propose spending about $10 million in 

fiscal years 2006 and 2007 to provide voter education and strengthen the ability of national and state electoral commissions to implement the elections. 

Nigeria’s primary anti-corruption agencies, the EFCC and the 

Independent Corrupt Practices Commission, have taken on corruption by government officials. They have identified and recovered ill 

gotten gains from notable Nigerian officials, and their activities 

have contributed to the prosecution or removal of several of these 

officials. These are important and symbolic measures even though 

much still remains to be done. 

The United States has helped the EFCC and the ICPC in its effort with a $1 million contribution for technical assistance. 

ICPC has also benefitted from the assignment of a United States 

prosecutor to assist in both procedural and conceptual matters. We 

have trained more than 800 prosecutors. And we congratulate Nigeria’s anti-corruption agencies for obtaining results and doing so 

in a very tough environment. 

I am pleased that Mr. Ribadu is here to brief you on the accomplishments of the EFCC. Under his leadership, the EFCC has 

emerged as a formidable law enforcement agency. But it has a very 

difficult balancing act. It must prosecute corrupt public officials 

while avoiding politically motivated prosecutions. Without this 

transparency, its hard work will fail in its major mission, which is 

creating a new culture of accountability and opposition to corruption. 

We welcome steps the Nigerian Government has taken in the 

past year to fortify mechanisms for identifying and prosecuting corruption. We urge Nigeria to continue its efforts in this regard. And 

we support the Nigerian Government’s efforts to include addressing 

corruption at the local level. 

Mr. Chairman, all these initiatives point to the robust bilateral 

law enforcement cooperation we have had with Nigeria. But more 

needs to be done. 

The Administration is pleased to have this opportunity to highlight Nigeria’s importance as an increasingly close and strategic bilateral and regional partner of the United States. We look forward 

to hearing Chairman Ribadu’s comments on what Nigeria is doing 

to solidify that partnership. And I am available to answer your 

questions. Thank you. 

[The prepared statement of Ms. Thomas-Greenfield follows:]

PREPARED STATEMENT OF MS. LINDA THOMAS-GREENFIELD, DEPUTY ASSISTANT

SECRETARY, BUREAU OF AFRICAN AFFAIRS, U.S. DEPARTMENT OF STATE

Mr. Chairman and members of the subcommittee, I am honored to testify before 

you today on Nigeria. The Administration views the Economic and Financial Crimes 

11

Commission (EFCC) as an important partner in the effort to combat corruption and 

promote good governance in Nigeria. 

U.S. policy goals in Nigeria are to strengthen social stability through pluralism, 

democracy, and good governance; to promote more market-led economic growth as 

the best means to reduce poverty in a sustainable way; and to enhance Nigeria’s 

ability to act as a responsible regional and bilateral trade partner. Combating corruption and improving transparency are two cornerstones of this policy optic. The 

United States raises this issue at the highest levels of the Government of Nigeria, 

and reminds Nigerian officials that engaging in corrupt activities to promote their 

political positions is unacceptable. Evenhanded and transparent prosecution of corruption in politics can build Nigerians’ confidence in the accountability of their elected officials and strengthen Nigeria’s most recent transition to democracy. Good governance will strengthen the transparent and effective use of public and donor resources and encourage increased investment and growth in Nigeria. 

Nigerian President Obasanjo and Finance Minister Ngozi Okonjo-Iweala have 

done much at the national level to improve federal public expenditure management. 

We strongly support greater transparency in the budget process to lock in economic 

reform. We have worked with the National Assembly’s Budget and Research Office, 

and are encouraging overall fiscal transparency and fiduciary management. We also 

are assisting Nigeria in its anticorruption efforts through the Africa Growth and Opportunity Act (AGOA), the U.S.—Nigeria Trade and Investment Framework Agreement (TIFA), support for the African Union Peer Review Process, and through the 

G–8. 

At the Evian Summit in June 2003, the G–8 endorsed a comprehensive 

anticorruption and transparency action plan that included a commitment to help developing countries build their capacity to strengthen domestic institutions and enhance transparency and accountability. President Bush expanded on these commitments at the Sea Island Summit by joining Nigerian President Obasanjo in launching an anticorruption and transparency compact to support country efforts to improve transparency in government budget processes, procurement, and the awarding 

of concessions. 

As a result, the United States is working closely with Nigeria, a co-member of the 

International Advisory Group of the Extractive Industries Transparency Initiative 

(EITI). Nigeria is playing an important role in EITI, having volunteered to pilot the 

new disclosure and validation methodologies, and has just completed a comprehensive audit of oil sector payments and government revenues for the period 1999–

2004. Nigeria must continue to fully implement EITI and ensure transparency on 

the revenue expenditure side at the federal and state levels for this effort to truly 

be a success. 

Our anti-corruption efforts are a true international partnership. We are working 

together with Nigeria’s law enforcement agencies, and also with international entities dedicated to improving international financial regulation. If the international 

community joins forces to combat financial crime in Nigeria, we will see important 

benefits from a reduction in the diversion of resources and in ‘‘419’’ (advance fee 

fraud) email scams and more effective action to block potential terrorist finance. In 

accordance with standards established by the Financial Action Task Force, the 

international standard-setting body, Nigeria is working towards implementing an effective national regime for combating all-source money laundering and financing of 

terrorism. 

Our international partners have an important role to play. The European Union 

has just offered Nigeria more than $30 million for assistance managed by the 

United Nations Office of Drug Control. The UNODC Global Program against Money 

Laundering (UNGPML) is managing the assistance to the EFCC. 

The United States through the Financial Crime Enforcement Network (FinCEN), 

the US Financial Intelligence Unit (FIU) and other appropriate agencies, will work 

with the UNGPML, the UK and World Bank and IMF to develop a state-of-the art 

Nigerian Financial Intelligence Unit (NFIU). FinCEN is sponsoring the NFIU for 

admission to the Egmont Group of FIUs. Part of this process requires assessments 

of the NFIU and its abilities to combat financial crimes, money laundering and terrorist financing. FinCEN is providing training to the NFIU in analysis, methodologies and typologies and regulatory issues. FinCEN is assisting the NFIU in meeting 

Egmont standards, which will enable the NFIU to receive, analyze and disseminate 

suspicious transaction reports to domestic agencies and sharing vital financial information with foreign FIUs. All vetted law enforcement agencies will be electronically 

linked to the FIU. 

Corruption affects many aspects of the business climate in Nigeria. By improving 

economic governance, Nigeria can set itself on the path towards attracting new investment and achieving sustainable economic growth. In this regards, it is especially 

12

important to implement a transparent regulatory framework governing public safety 

and public infrastructure. Speedy ratification of pending Nigerian legislation on 

EITI, public procurement, and fiscal transparency are key first steps that will diminish the potential for graft and bribery and improve Nigeria’s business climate. 

The Nigerian government’s struggle against corruption is a crucial element of our 

efforts to promote sustainable development in the Niger River delta. This region 

produces a sizeable proportion of Nigeria’s GDP and 11% of our own petroleum imports. Yet, the region is deeply impoverished and subject to destabilizing violence. 

We are working in partnership with the Nigerian government, the United Kingdom, and other stakeholders to strengthen rule of law in this crucial region. Our 

strategic objective in the oil-producing Niger Delta is to address the root causes of 

the region’s security problem. By addressing insecurity in the Niger River delta, we 

also contribute to stability in the international oil market. On April 28, the governments of the United States, United Kingdom, and Nigeria met in Washington for 

the third round of discussions on addressing energy security in the Niger Delta 

through community development, improved coastal security, and increased control 

of financial crimes and small arms trafficking. Nigeria is considering offers by the 

United Kingdom and United States for targeted technical assistance in these areas. 

Combating crime is a crucial element of restoring law and order in the oil-rich 

Niger Delta. This includes the critical need for community policing training, to ensure respect for human rights and to increase public trust, confidence, and cooperation with Nigeria’s security forces. Establishment of a Police Service Commission to 

investigate police corruption in the Delta is another vital need. 

Democracy promotion is our foremost policy objective. Corruption undermines democracy in Nigeria. Good governance and accountability build trust in the democratic system and elected officials. It is important for Nigerians to see their elected 

officials held accountable for wrongdoings, if the rule of law and accountable, democratic government are going to take further hold in Nigeria. 

Nigeria’s primary anti-corruption agencies, the EFCC and the Independent Corrupt Practices Commission (ICPC), have taken on corrupt government officials. They 

have identified and recovered ill-gotten gains from notable Nigerian officials, and 

their activities have contributed to the prosecution or removal of several officials, 

including five former ministers and two former governors. These are important and 

symbolic measures, even if much remains to be done. 

The Government of Nigeria continues to combat corruption on various levels and 

in several areas. Our support of the EFCC is part of a broader effort to work with 

Nigerian law enforcement agencies to combat corruption and international crime. 

The United States has helped the EFCC and ICPC in this effort with one million 

dollars in technical assistance. ICPC has also benefited from the assignment of a 

U.S. prosecutor to assist in both procedural and conceptual matters. We have 

trained more than 800 prosecutors. We congratulate Nigeria’s anti-corruption agencies for obtaining results, and doing so in a tough environment. 

Under the leadership of Chairman Ribadu, who is on the second panel, the EFCC 

has emerged as a formidable law enforcement agency. The EFCC has a broad mandate to investigate and prosecute all forms of financial crimes in Nigeria and the 

legal authority and resources to begin to address Nigeria’s corruption. While we congratulate the EFCC for these successes in combating political corruption, we also 

take note of the considerable challenges it faces, especially in the upcoming election 

year. The EFCC has a difficult balancing act; it must prosecute corrupt public officials while avoiding politically motivated prosecutions. The public must see the 

EFCC’s operations as credible, impartial and fair. Otherwise, its hard work will fail 

in its major mission of creating a new culture of accountability and opposition to 

corruption. 

Addressing corruption also supports our efforts to combat the scourge of narcotics 

trafficking in Nigeria, in the United States and the world. Nigeria remains a major 

transit hub for global narcotics distribution. Cocaine and heroin are transshipped 

through Nigeria by well-established international criminal networks. Nigerian law 

enforcement has had some modest success in interdicting narcotics in small shipments of hard drugs. Enhanced screening procedures at Nigeria’s international airports have helped, and we continue to work with Nigerian officials to improve narcotics interdiction. 

The corrosive impact of corruption continues to hamper Nigeria’s capability to address these challenges. We welcome steps the Nigerian government has taken in the 

past year to fortify mechanisms for identifying and prosecuting corruption. We urge 

Nigeria to continue its efforts in this regard, and we support the Nigerian government’s efforts to include addressing corruption at the local level. Until recently, we 

have not seen significant numbers of large-scale seizures, and Nigeria’s success in 

apprehending and prosecuting major traffickers has been limited. With the appointVerDate Mar 21 2002 12:05 Jul 17, 2006 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6621 F:\WORK\AGI\051806\27648.000 HINTREL1 PsN: SHIRL
13

ment of dedicated new leadership in Nigeria’s National Drug and Law Enforcement 

Agency (NDLEA) and National Police, Nigeria’s cooperation with U.S. law enforcement agencies is now much stronger, as is Nigeria’s participation in regional 

counter-narcotics efforts. 

Mr. Chairman, all these arguments point to the need for more robust bilateral law 

enforcement cooperation. The Administration is pleased to have this opportunity to 

highlight Nigeria’s importance as an increasingly close and strategic partner of the 

United States, to hear Chairman Ribadu’s comments on what Nigeria is doing to 

solidify that partnership, and to answer your questions. Thank you.

Mr. SMITH OF NEW JERSEY. Thank you so very much, Madam 

Secretary, for your testimony. 

Let me begin the questioning first. You mentioned in your testimony that AGOA is being used to promote transparency and to 

fight corruption. I wonder if you might elaborate on exactly what 

we are doing with AGOA. 

Secondly, you rightfully pointed out that state governments need 

to be focused upon as well, and I think that is a universal problem. 

You know, the Federal Governments everywhere get scrutiny, but 

state is where the big money often is to be made as contracts are 

being offered, as other kinds of bribery occurs. 

How would you assess the Federal versus the local in terms of 

a progress meter? Would you say the local is far behind, because 

obviously there are so many more people who potentially could be 

bribed or corrupted in some way? 

And then, if I could ask you with regard to what the U.S. Government is doing to help the Extractive Industries Transparency 

Initiative in Nigeria. As you know, approximately 70 civil society 

organizations have asked that mining be included in that. What is 

the Administration’s view on that? 

And in his testimony, later on today, David Goldwyn, the president of Goldwyn International Strategies, makes the point, and I 

quote him: ‘‘The United States has been an observer but not a supporter of EITI in general, or the NEITI effort in particular.’’ And 

it is a criticism, as if we were observing, but not embracing and 

pushing. If you can give some insights on that as well. I have one 

other question after that. 

Ms. THOMAS-GREENFIELD. Good. Thank you very much. On 

AGOA I have been working on that on planning for the AGOA conference which is going to take place in Washington in June. 

And what AGOA does to deal with corruption, we look at issues 

related to how business is done in these countries and what we can 

do to promote better practices to allow business to flourish and investments to take place. 

For example, in many countries, the number of days and the 

number of signatures that are required to open a business are 

just—it is a breeding ground for corruption. 

And we make countries aware of those issues. And Nigeria is one 

of the countries where I think it is about 30 days. I am not sure 

of that number. But again, the number of signatures required really is an opportunity to breed corruption. 

And bringing that to the attention of many governments who are 

just not aware that these opportunities are out there is a way that 

AGOA has contributed to this. 

You ask about the state government versus local government or 

Federal Government in terms of what is being done on corruption. 

14

I think with the leadership of the finance minister, having published the budgets of state and local governments, that was a very 

important effort that allowed the normal citizens to see how much 

money was going into the coffers of state and local governments 

and also allowed those citizens to ask where that money is going. 

I think more progress is being made at the national level, but I 

think also efforts are being made to address issues of corruption at 

the local level. 

And on NEITI, you asked what we are doing on that. I think the 

record will show that we have been extremely supportive of this effort. President Bush expanded the commitments that were made at 

the Evian G–8 by joining with President Obasanjo. I mentioned 

that, in my statement, we have given $1.7 million in fiscal year 

2005 funds to support a Nigerian pilot; USAID in Abuja has about 

$1.1 million for supporting training for these efforts. So, again, I 

think we can do more. But, certainly, we are not sitting as observers. We are really actively involved in this progress. 

Mr. SMITH OF NEW JERSEY. Should mining become a part of that 

portfolio? 

Ms. THOMAS-GREENFIELD. I don’t know the answer to that question, but it is something I will look into for you. 

Mr. SMITH OF NEW JERSEY. If you get back to us, we will add 

your answer to the record. 

As you know, over the past decades, various plans to develop the 

oil-rich Niger Delta were sabotaged by the theft of untold millions 

of dollars from such projects as the Petroleum Trust Fund. Obviously that leads to a great deal of discontent among the local population. 

What is your view on that? Because it seems to me that, you 

know, given the volatility of that region, had that money been 

spent and spent wisely, people would have been—I won’t say a stable middle class would have ensued, but there would have been 

much better roads, bridges, houses, infrastructure. What is your 

take on that? And is it too late to resurrect that and save it? 

Ms. THOMAS-GREENFIELD. Let me start with the last comment. It 

is not too late. It is never too late. I have been actively involved 

with the Niger delta initiative and the Gulf of Guinea initiative 

with the Nigerians. It was one of the first things I did when I started in my position. 

And we have had two meetings since I have been there, and the 

third meeting, as I mentioned, of the Niger Delta Group, the governor of River State, for example, committed to giving $20 million 

for supporting development in River State. We think that is a very 

positive initiative. It is small change, but I think it says to people 

in the community that the government, the state government is 

willing to make a commitment. 

We are trying to encourage this in other states in the delta region. And we are also trying to encourage accountability. We see 

the impact of neglect in this region. And the impact is seen in the 

lack of education, the lack of health care, the lack of infrastructure, 

and the increase in violence that we have seen in recent months. 

So we are working with the Nigerian Government. It is not about 

us giving them money, because we think they have enough money 

to do it themselves, but giving them support and encouragement 

15

and capacity to deal with some of these issues. And we are hoping 

that this will start to bear fruit soon. 

Mr. SMITH OF NEW JERSEY. I would just note parenthetically 

that, several years ago, I led a delegation to a Parliamentary Assembly in Europe in Bucharest as part of the OSCE Parliamentary 

Assembly. We had about 358 members of parliament from 55 countries that make up the OSCE. And the interesting topic for almost 

5 days of discussion was corruption as the hijacker of democracy 

or emerging democracies. Corruption is just as lethal to an emerging democracy as the most barbaric dictatorship because of the corrosive effects. And it was a very interesting interchange. You don’t 

just look askance at this kind of thing. And I know we are not. And 

I know you are not. But it is just that some people fail to see that 

this is as much a potential threat as dictatorship is. So it often 

leads to dictatorship as well. 

Mr. Payne. 

Mr. PAYNE. Thank you very much. As you indicated, the transition in Nigeria trying to, as you know, 28 of the 43 years, it was 

under military rule and the feeling was that with democracy coming in, Nigeria could flourish. And I guess with Babangida that 

started the process when MKO Abiola was elected June 12, and 

then the election was aborted, Sani Abacha then taking over—I 

mean Abubakar, I guess who finally said, enough is enough, and 

we are trying the democratic regime. 

This whole question of 419 and other kinds of corrupt policies is 

really something that the government claims it is trying to work 

on. Of course, in many instances, unfortunately, people’s own greed 

in a lot of instances is what gets them caught in the trap. Many 

people feeling there is a tremendous amount of money that could 

be made. This country here must not be up to stuff on what is 

going on, and so I will put this little contribution in this fund, and 

I am going to reap all these benefits. So it is once again challenging 

individuals’ own greed to feel they could get something for nothing. 

And it is unfortunate that there are so many people out there that 

fall into that gap. 

So somehow we have got to work on people to get them to be 

more realistic about life. No one is going to give you a million dollars if you give them $100,000 and you might have a little criminal 

mind yourself because that sounds illegal to me. 

But any way, 419. What is your assessment of what will happen 

on this whole debate of a third term? Do you think it is good? I 

know the Senate rejected it. Is that the final end? Does it go on? 

We had a meeting that was supposed to be with President 

Obasanjo when he came to Washington, some members of the 

Black Caucus, because we were going to urge him to live up to the 

constitution and step down. However, he left town before we could 

meet with him. However, do you think that there will be a, that 

he will conclude with the Senate vote or is there another process, 

or how does it work? Is there going to be a referendum? 

Ms. THOMAS-GREENFIELD. Thank you for that question. I will go 

do my best in answering it. 

I think I should start out by just saying it is our view that term 

limits should be respected. And we have made that view known not 

16

only in Nigeria but in other places in the world. Leaders need to 

groom new leaders to take over. 

We were pleased not—we were pleased with the fact that a vote 

was made, and it reflected, as you said in your remarks, it reflected 

democracy in Nigeria. 

And it is, I think, the best hint that we have that democracy is 

there in Nigeria and it has taken root. 

We are not sure what this means as far as any future desires on 

the part of the President to seek a third term. I think the legislature has spoken, and the amendments were not approved. What 

happens after that, we are all interested in seeing and hearing, and 

we will be watching it very, very closely, and we are hoping that 

whatever happens, that it is constitutional and nothing extra-constitutional is done. 

Mr. PAYNE. Thank you. What is our current relationship with Nigeria? I know that our—the current Administration requested that 

Nigeria receive Charles Taylor before the United States would go—

well, the United States wasn’t really going in any way, but before 

there could be any move on the part of the United States, it was 

President Bush said, we will not go in until Taylor is out, and Nigeria agreed to that. 

What is the, in your opinion, relationship between Nigeria and 

the United States Government with the military also, and 

Obasanjo at the present time? And do you think that the generals 

are starting to get anxious again in the barracks, as has happened 

in the past in Nigeria? 

Ms. THOMAS-GREENFIELD. I think we have a good relationship 

with the Nigerian Government. We have to, and I think in your 

statement, you made reference to the very positive role President 

Obasanjo and the Nigerian Government have played in the region. 

And even the fact of the Nigerian Government taking Taylor and 

helping to end the civil war in Liberia is something very important 

that we have to give President Obasanjo and the Nigerian Government credit for. 

We have not heard any reports, and I am not aware of any reports that the military is beginning to get uneasy. I hope that is 

not the case. Nigeria is a burgeoning democracy. And I think they 

have seen some of the benefits of having a democratically elected 

President and not a military government. 

President Obasanjo has made his views known in the region 

about the problems with the military government having interjected himself and in making his views known in Togo and other 

places in the world. So I would hope that, in the case of Nigeria, 

we don’t see that happen again. 

Mr. PAYNE. Well, thank you very much. 

I do think that, hopefully, the era of the generals are over. 

I was in a meeting once with General Babangida, General 

Abubakar and General Abacha and former General Abiola, and we 

really don’t want once again to have people in uniforms making the 

decisions for a country as important to Africa and the world. And 

so that is our hope, that we can keep the military out but also have 

the current President abide by the constitution. 

Thank you very much. 

Mr. SMITH OF NEW JERSEY. Thank you. 

17

Mr. Tancredo. 

Mr. TANCREDO. Thank you, Mr. Chairman. 

Just one very quick question. You mentioned in your testimony 

that the—you were referring to the Evian summit in 2003 where 

the G–8 endorsed a comprehensive anti-corruption and transparency action plan and then went on to say that President Bush 

expanded on these comments at sea Island summit by joining 

President Obasanjo in the anti-corruption and transparency compact. 

What I am really hoping to hear beyond the description of what 

they actually agreed to is what has happened in the 2 years or almost 2 years subsequent to that last meeting? Certainly we hope 

there has been some progress, and I wonder if you could give us 

some specific evidence of that progress. 

Ms. THOMAS-GREENFIELD. Yes, sir. Thank you for that question. 

There has been some progress. Again, as I said throughout my 

speech, more needs to be done. 

President Obasanjo in February 2004 established a working 

group to guide the implementation of Nigeria’s participation in the 

Extractive Industries Transparency Initiative and to encourage revenue transparency. 

The Nigerian Senate still has to vote on the bill. And the bill 

would mandate that the Nigerian Government and oil companies 

disclose certain information about how much oil is being extracted 

and how much is being paid. And it would also provide a permanent basis for some budgetary funding of annual audits. 

Nigeria, because of this, is playing a very, very active role in 

EITI and the Nigerians volunteered to pilot the new disclosure and 

validation methodology, as I mentioned in my statement, and has 

just completed a comprehensive audit of the oil companies. So we 

are seeing progress. The EITI issued an audit report, identified certain problems that the government was facing. The government 

has now decided that it will audit the Niger Delta Development 

Commission, and we are looking forward to seeing the result of 

that audit. 

Again, more can be accomplished. 

Mr. TANCREDO. Have there been any indictments brought or arrests made? 

Ms. THOMAS-GREENFIELD. I think there has been one, but I will 

have to get back to you on that, or, it is possible that Mr. Ribadu 

may have an answer to that when he gives his testimony. But I 

am aware that there has been one indictment. 

Mr. TANCREDO. Thank you very much. 

I have no other questions, Mr. Chairman. 

Mr. SMITH OF NEW JERSEY. Thank you, Mr. Chairman. 

Ms. Lee. 

Ms. LEE. Thank you, Mr. Chairman. I want to pursue this whole 

issue with regard to United States anti-corruption laws, RICO. 

What have you found in terms of any violations or prosecutions of 

any individuals or United States companies that are engaged in the 

corruption that is taking place in Nigeria? 

Ms. THOMAS-GREENFIELD. I am not aware of any United States 

companies that have been engaged in direct corruption in Nigeria. 

I am not saying it doesn’t happen. I am just not aware of it. 

18

I think our companies are so consciencious of our own laws in Nigeria they have—I have heard them complain that they are disadvantaged because of our laws, and the law is the law, but they 

are disadvantaged because other companies from other countries 

don’t have the restraints that they have on providing bribes to 

other governments. 

Ms. LEE. Let me tell you, one company told me when I was there, 

you know, we pay marketing representatives and we pay consultants in the United States to help us get a contract. Here, that is 

considered bribery, and we can’t pay somebody to do that. 

How—what is the difference as you see it between paying a sales 

rep or consultant to do marketing versus paying a bribe in Nigeria 

to help get a contract? 

Ms. THOMAS-GREENFIELD. Well, my response to that is, it is not 

illegal to get a sales rep but it is illegal in Nigeria as well as in 

the United States to pay bribes. Now Nigeria doesn’t enforce it, but 

we would. 

So I think companies are very consciencious of that. 

Ms. LEE. So companies can pay a sales rep as long as they comply with the anti-corruption laws and have arranged agreements; 

that is the difference. 

Ms. THOMAS-GREENFIELD. That would be my understanding. 

Ms. LEE. Okay because I heard this several times come from 

United States companies, and I am glad to hear that none have, 

could been, or you don’t know of any that have been investigated 

or prosecuted. Because like I said earlier, when I was there, and 

this was years ago. Over and over I was told it takes two to tango, 

and many companies from abroad would come to Nigeria for the express purpose of engaging in certain types of business deals that 

were totally inappropriate and corrupt but they went there because 

they knew they could make a quick buck and get away with it. 

Let me ask you about the HIV/AIDS pandemic that is taking 

place. Again, the rates now are over 5 percent. Several years, again 

when I was there, the reported rates were 4 percent, but in a country with what, 131 million, people, that is pretty high. 

One of the tragedies in Nigeria was that a large percentage of 

the cases were as a result of not having a safe blood supply. And 

HIV, the virus, was contracted through blood transfusions. Do you 

know or can you give us an update on any strategies that we are 

working on with the Nigerian Government to make sure that there 

is a development of a safe blood supply as it relates to a part of 

a strategy to address the HIV and aids pandemic? 

Ms. THOMAS-GREENFIELD. Thank you for that question. 

HIV/AIDS is a major problem in Nigeria. I think our statistics 

show that there are about 4 million adults affected, and Nigeria 

has the largest number of AIDS orphans. 

We have a very large PEPFAR program in Nigeria, and included 

in that PEPFAR program are programs to support prevention. It 

does not specifically mention blood supply, but I would assume that 

prevention would include dealing with issues related to the blood 

supply. 

Ms. LEE. Is there a way you could check on that? Because, again, 

I was there within the last few years, and there was no program 

strategy or piece in place. And we had several discussions with 

19

high level ministry officials. We discussed that. And we have even 

talked about the Red Cross maybe coming over to try to help figure 

that piece out. 

Ms. THOMAS-GREENFIELD. I will definitely get back to you on that. But our program is $138 million. So, hopefully, some of that 

is going in that direction. 

Ms. LEE. Thank you very much, and I look forward to receiving 

your response. 

And let me ask you finally about the conflict in the delta region 

in terms of how you see that now as it relates to threatening oil 

and gas production. 

Ms. THOMAS-GREENFIELD. The conflict in the delta has had a 

major impact on Nigeria’s production of oil. Right now, the figures 

indicate that about 400,000 barrels of oil per day are shut in because of what is going on in the delta region. And the insecurity 

in that region continues. 

This is a region where we have been working closely with the oil 

companies, with the Nigerian Government at the national level but 

also with the government at the state level to try to develop programs that will improve security in the region. But security is not 

the only issue. The biggest issue in that region that I think we 

need to deal with is the lack of infrastructure, the poverty, the lack 

of education, and the lack of tangible benefits going into those communities, and that has led to the insecurities. 

Ms. LEE. Are the oil companies paying fair wages and providing 

economic development for the region, providing for environmental 

protections, are they providing for health benefits and that type of 

real quality of life that they deserve? 

Ms. THOMAS-GREENFIELD. I think they have gotten that message, 

and yes, they are. But again, it is just, it is small potatoes compared to the needs. But they are taking very seriously the approach 

that we have taken in our cooperation with the Nigerian Government to look for programs to assist the population. They also participate in development programs, and they have contributed to 

this Rivers State program that I described earlier. So I think they 

are—they have gotten the message. 

Ms. LEE. Are they exploiting the workers or not, as you see it? 

Ms. THOMAS-GREENFIELD. I can’t say that they are exploiting 

workers. They are paying salaries in a place where unemployment 

is very, very high. There is a perception on the part of many workers that they are being exploited because they are seeing people 

benefit in a much better way than they are able to benefit. But I 

also think the companies are trying to address this. 

Ms. LEE. Thank you very much, Mr. Chairman. 

Mr. SMITH OF NEW JERSEY. Ambassador Watson. 

Ms. WATSON. Thank you so much, and I thank you, Mr. Chairman, for holding this hearing. I am going to go back some time in 

the past when Shell Oil was down in the Abomey Delta Region and 

following the testimony from the locals in that area, the local farmers, that their farm land had been almost destroyed by the siphoning of the gasoline and the flow into the fields. And as you know, 

several of the farmers had complained, and there was a battle and, 

some of the military ended up getting killed. And then there were 

hangings in the square. We happened to be in South Africa at the 

20

time. And Mandela came on, and I had never seen him so furious. 

And so he hung it on the fact that the oil companies come in and, 

indeed, themselves corrupt the land. I know they paid off Abacha, I understand, $4 billion, and so he 

persecuted his own people. 

Since that time, there has been a very bad feeling that grew up 

within that West Coast of Africa, particularly Nigeria. And people 

have held very hostile feelings toward the oil companies. Now going 

back and forth through Lagos, and that is a place that I don’t like 

to go to because of the dash, but I am wondering what we can do 

to improve the perception that locals have of our oil companies who 

come in, not only oil, but they mine gold and they mine diamonds 

and so on, and very little turns back to the government. 

So can you comment on what is happening now in this decade 

in terms of those—now they say, the Shell division of Royal Dutch 

in that area. And they control everything that happens there, but 

it is still under the umbrella of shell. 

And I am just wondering if our companies are any more responsible or responsive to Nigeria and the other countries where they 

are? I know the history in South Africa, and I have said this to the 

headquarters on the West Coast, and we have got a little bit out 

of them because of the abuse. 

So, tell me, how are our companies becoming responsible corporate citizens there in Nigeria? And in turn, is the government 

under Obasanjo reacting in a more positive way, and are they 

training their young to do the work of these companies, not only 

the mining but diamond gold miners so on? 

Ms. THOMAS-GREENFIELD. I think the oil companies were shocked 

by the response that you described in the Ogoni region, and I 

think, having worked on this issue only for 3 months but spending 

a tremendous amount of my time with oil companies, that they do 

see this as an important effort to improve their image. We are having oil companies participate in these meetings at various senior 

levels, sending their CEOs from Nigeria, and every single oil company participated in the last meeting, which was even a surprise 

to us. 

Now, they are concerned about their security, but they also are 

very conscious that in order to deal with the security issues that 

they are experiencing, that they are going to have to deal with environmental issues, and they are going to have to deal with development issues, and they are going to have to deal with the discontent of the people in the communities that they are working in, 

and I think they are taking it seriously. 

Ms. WATSON. Do you, as the Department of State, have requirements that they have to comply with? You know, our companies 

that go over there, and they reap the benefits, and the people get 

very little of the bottom line. 

Ms. THOMAS-GREENFIELD. Yes. 

Ms. WATSON. So I am just wondering what your programs are 

and what your requirements are as they relate to businesses, or 

are they completely independent? 

Ms. THOMAS-GREENFIELD. No, they are not. I will mention that 

the office that deals with human rights, Jeff Krilla is going to Nigeria on the 21st through 25th on a task force visit to Nigeria to look 

21

at voluntary principles for these companies, and all of the companies are participating in this, and the Nigerian Government has 

decided to participate in this with NGOs. The head of the Nigerian 

National Petroleum Corporation has also agreed to participate, and 

the Nigerians have expressed a real interest in trying to address 

some of these issues, but we are holding United States companies 

that tend to have a very positive image, we are holding them accountable, and they know that we are holding them accountable, 

and because of that they have a much more positive image than 

some of the other companies. 

Ms. WATSON. My final comment, Mr. Chairman, if I may, if there 

are a set of principles would you share them with us? I have connections and friends from back in the 1970s in Nigeria, and I have 

followed some of the challenges that the locals have had, and they 

have really suffered greatly because of the hunters and the change 

and it is a coup every other year. You know the history. But I think 

it is a two-sided problem. So I think that the principles need to be 

shared, and we need to raise these questions. We, as the Congress, 

need to raise these questions with our companies that make great 

profit abroad, and I do know the dark cotton, the cotton of Africa 

is the cotton of the future because they have the natural resources 

that we need and there is going to be closer relationships with that 

cotton and its 54 nations. So I would hope that we would all understand the principles and in our places, see that our companies that 

go over there, live up to those principles. So you can give those to 

me at another time, and thank you very much for being here. 

Ms. THOMAS-GREENFIELD. Thank you. 

Mr. SMITH OF NEW JERSEY. Thank you. I can just conclude, and 

I know Mr. Payne has one final question. In his testimony Mr. 

Goldwyn points out that the NEITI committed to conduct audits 

under international accounting standards with a reputable external 

auditor and points out that the order years were 1999 to 2004, the 

duration of the Obasanjo administration. And I quote him here:

‘‘Those audits set an unequal precedent for other resource-rich 

countries. Nigeria was the first to insist that all such revenues 

be published in a disaggregated fashion, company by company, 

category by category, and well by well. All of the results, including interim reports, were posted on the Web at 

www.neiti.org. Nigeria was the first government to look intrusively at its own entities, not just at the conduct of private 

companies. It was first and still the only country to look at 

physical systems in business processes as well as financial 

flows. NIETI’s ability to achieve success and future successes 

is due, in large part, to constant support of the President.’’

My question is about elections. First, do you agree with that assessment? Second, elections are, by definition, volatile events. Elections can either result in a right turn, left turn or U-turn. And my 

question is, are you confident that Nigeria’s commitment to transparency is sustainable? 

Ms. THOMAS-GREENFIELD. That is a hard question. I hope it is 

sustainable, and I think the Nigerian Government hopes that it is 

going to be sustainable. We met with the Finance Minister recently, and she is trying to put measures in place that will leave 

22

a legacy when she is gone, and one of those measures is, again, 

publishing those budgets. Now people have an appetite for knowing 

exactly how much money is going into the coffers of the government. So again, we are hoping it is sustainable. We are hoping it 

becomes institutionalized. It requires leadership. If it is not institutionalized by the next administration of the Nigerian Government, 

we will be raising it with them in very tough terms. 

Mr. SMITH OF NEW JERSEY. Thank you. Mr. Payne? 

Mr. PAYNE. Yes. Just once again, on the problem with the oil 

company, as you may recall, just on Sunday a hundred people were 

burned to death in a fire which occurred as they were siphoning 

off oil, and the oil was ignited and the people perished, but my—

and that was very tragic. But my question more relates back to the 

oil companies themselves. During Obasanjo’s regime, as you may 

recall, the oil companies cooperated with the government. In other 

words, there was a time when they needed some pursuit, boats and 

the oil companies, the oil company there, the main company allowed them to use their speed boats to try to apprehend some people, and the other thing too, that complaint of course of the Ogoni 

people and the Ogoni aid. I think there was eight of them that 

were hung because they were protesting, and there were some 

deaths that followed the protests and therefore, the hanging of 

these Ogoni people occurred and—went the Ogoni folks. And they 

were protesting about the exposure of oil pipes, the degradation of 

the oil, of the pipeline, which were above ground, not below ground 

like in many places. And the soot that comes down when the rain 

comes because there is so much smoke in the air, that soot comes 

down, and the problems of the asthma and other kind of diseases 

that come from this environmental degradation. 

Has there been any significant improvement in, one, the companies’ cooperation with the military, it was a military government 

at that time, but with the government illegally allowing them to 

use their assets? 

And secondly, has there been any improvement in the poor quality of the environment that the oil companies have as a legacy in 

Nigeria, creating, you know, serious health problems? 

Ms. THOMAS-GREENFIELD. I think the companies, and we are 

very conscious of some of the environmental impact of the oil production areas in Nigeria. They have done a tremendous amount of 

work to reduce flaring, which has caused problems for people in 

those areas, and I think they are working closely with the government to try to address some of those issues. I also think they are 

very conscious that this is not a military problem. And if it becomes a military problem or a military solution to addressing this, 

we end up with some of the problems we had when Shell Oil Company allowed those boats to be used by the government. Fortunately, most of the U.S. companies’ extraction is offshore and they 

are—they have not been affected by this as much as Shell Oil Company, but I think again, we are working to try to address the root 

causes and not see this as just a security and military solution. 

Mr. PAYNE. Thank you. 

Mr. SMITH OF NEW JERSEY. Thank you. 

Ms. LEE. One more very quick—thank you, Mr. Chairman. I just 

learned that last week, two Global Fund HIV/AIDS grants were 

23

canceled as a result of some allegations of corruption. I wanted to 

find out if you know anything about that, what that was about, and 

what will happen now—well, first of all to the grants and the 

money, which ultimately means what happens to the people who 

are going to—should have benefited from that. And then secondly 

with regard to the oil companies, I know in South Africa, many 

United States businesses actually have established very fine health 

care centers, support centers, HIV/AIDS prevention, you know, programs, the distribution of anti-retroviral drugs, what have you. Are 

the oil companies in Nigeria doing such—are they following the 

companies in South Africa, or what do you know about that? 

Ms. THOMAS-GREENFIELD. I am not aware of the Global Fund 

corruption issue that you raise. I can look into it, but I haven’t seen 

anything on that one. The companies are putting in hospitals. I 

don’t think it is on the scale that we have in South Africa. But in 

a meeting with Shell Oil Company recently, they mention that in 

some of the areas they are working in they have put clinics and 

they have put hospitals, but again, not on a very large scale. 

Mr. PAYNE. Also would you yield? 

Ms. LEE. Yes. 

Mr. PAYNE. Just on a problem that we were having being involved with the eradication of polio, and as you know, polio has 

been eradicated in most countries, only in about three or four countries, only about 4 or 5 years ago. There has been a resurgence 

again, but one of the countries was Nigeria. Now, there was a 

rumor in the northern part that the vaccine was, you know, poison 

or it was not—it was used to infect the people, and it was not being 

distributed up in the north. 

Has that—and the feeling is that because it has gone unchecked 

in northern Nigeria, that polio, the spread of polio, once again is 

starting to move into other countries, and there are more reported 

cases this year than we had 2 years ago. Do you know if that situation has been settled in regard—and whether the governors in the 

north are allowing the vaccine, the oral polio or whatever way they 

use it, to be distributed? 

Ms. THOMAS-GREENFIELD. I am aware of the situation, and I am 

not—I don’t know the answer to the question, whether the governors are allowing it to be used, but it is an issue that we have 

on our agenda for the World Health Assembly that is taking place 

in Geneva and working with WHO and other international agencies to address the concern in Nigeria. But it is something that we 

are quite concerned about, when polio has been eradicated in most 

places in the world. 

Mr. SMITH OF NEW JERSEY. Okay. Secretary, thank you so much 

for your testimony, and it is great to have you here again. 

Ms. THOMAS-GREENFIELD. Thank you very much. 

Mr. SMITH OF NEW JERSEY. I would like to now welcome our second distinguished witness to the witness stable, Mr. Nuhu Ribadu, 

who is the Executive Chairman of the Economic and Financial 

Crimes Commission for the Government of Nigeria. Previously he 

served for 18 years in the Nigeria Police. Mr. Ribadu has been the 

recipient of several awards, including the triple Inspector General 

of Police Award. Notable Nigerian newspapers, including This Day

24

and the Nigerian Tribune, declared him the Man of the Year in 

2004 and 2005. 

And I especially want to thank him for flying in to be here to 

present this testimony to our Committee. We are most appreciative 

of that. The floor is yours, sir. 

STATEMENT OF MR. NUHU RIBADU, EXECUTIVE CHAIRMAN, 

ECONOMIC AND FINANCIAL CRIMES COMMISSION, FEDERAL 

REPUBLIC OF NIGERIA 

Mr. RIBADU. Good afternoon, Chairman Smith. 

Mr. PAYNE. There is a button there, and pull that closer to you. 

Mr. RIBADU. Thank you. Thank you very much. A very good 

afternoon to you, Chairman Christopher Smith, Ranking Member 

Donald Payne, and other distinguished Members present. 

I appreciate the opportunity to testify before you, the House Subcommittee on Africa, Global Human Rights and International Operations. It is indeed a privilege, an honor for me to really have this 

chance to share with you our experience on what is going on in Nigeria today. 

The history of corruption in Nigeria is a topic we are talking 

about, is strongly rooted in the 29 years of military rule my country 

has experienced since achieving independence in 1960. Successive 

military regimes subdued the rule of law, facilitated the wanton 

looting of the public treasury, decapitated public institutions and 

free speech and instituted a secret and opaque culture in the running of government business. The result was total insecurity, poor 

economic mismanagement, abuse of human rights, ethnic conflicts, 

and capital flight. 

Democracy was started in Nigeria only in May 1999, with the 

election of the civilian government of President Obasanjo. 

One cardinal program is the fight against corruption and waste 

in the public service. This he has demonstrated by the establishment of the two major anti-graft institutions, the Independent Corrupt Practices (And Other Related Offenses) Commission and the 

Economic and Financial Crimes Commission, which I am privileged 

to head. It is important to note that the fight against corruption 

is situated within the larger economic reform program of government, the National Economic Empowerment Development Strategy, 

a home-grown medium-term poverty eradication strategy. NEEDS 

is an economic and structural reform program designed to bring 

improved macro-economic stability, better public expenditure management, reduced corruption, increased transparency and improvement in key sectors, including the financial sector. 

The anti-corruption strategy of the Government of Nigeria. The 

government’s target is zero tolerance for corruption. This it has 

pursued through promulgation of laws, anti-graft laws, Independent Corrupt Practices—I have a very long statement. I am just 

going to go through and briefly summarize some of the major 

points that are reflected in the report. 

The promulgation of the new most stringent laws, anti-corruption, economic crimes, institutions for effective law enforcement, 

prosecution and conviction of high-ranking public administration 

officials, judicial and justice sector reforms, tracing, seizing and 

confiscation of all proceeds of crime, public reorientation through 

25

targeted advocacy, institution of the Due Process Mechanism in 

public sector procurements, transparent privatization of failing 

public institutions and creating an enabling environment for effective private-public partnerships, monthly publication of distributable revenue from the Federation Account to the different tiers of 

government, institution of transparencies and accountability in the 

oil and gas sector through the work of the Nigerian Extractive Industries Transparency Initiative, which has opened up the oil and 

gas sector through a landmark independent audit, conducted by the 

Hart Group. 

Institution of the three services saved the nation over 3 billion 

U.S. dollars, which would have been lost through inflated contracts, 

and introduced local-international competitive bidding for government contracts. 

Formalization of due process through a law. That law is now 

awaiting passage by the National Assembly of Nigeria. The establishment of Nigerian Financial Intelligence Unit, NFIU, helps in 

the detection of suspicious transactions. 

Nigeria is one of the 21 most improved nations in 2005. More importantly, the 2005 World Economic Forum and World Bank Governance Surveys by Daniel Kaufman indicated significant improvement on corruption, public procurement, public finances and taxation. 

Indeed, the Transparency International Report for this year has 

also clearly shown resolve. Some of the steps taken in Nigeria are 

beginning to show. This, indeed, if we address the problem of corruption, has a chance of changing the country. 

Economic and Financial Crimes Commission—this is the commission I am heading. I will give you a brief overview of what it is and 

what we are doing. The EFCC, which is today the arrowhead in the 

fight against corruption in Nigeria, was established in 2003 as a 

part of a national reform program, as I have told you earlier. Yes, 

this is an interagency commission comprising a 22-member boardroom from all Nigerian law enforcement agencies and other regulators. I am just going to talk very briefly on some of the positive 

steps and measures that have been so far achieved from the work 

of the EFCC. 

Fundamentally, the most important thing I can see is the change 

of attitude. We have been able to show really for us to move forward, for us to be able to solve the problems facing us, we have 

to first of all change, change in the way—really we have to start 

more or less from the beginning, clean, sanitized, and establish due 

process and transparency in our system. We have to just do that. 

Otherwise, there is no chance for us to really make any headway. 

EFCC has been involved in the investigation of cases ranging 

from high-profile corruption cases, investigating fraud, money laundering, tax evasion, contract scams, identity theft, illegal oil banking, bribery, looting, and foreign exchange practices. 

EFCC is also at the forefront in the drive to sanitize and clean 

key government agencies. We have been able to more or less put 

a case for the change of obligations in most of these important government agencies, for example, Nigerian Police Force, the Customs 

Department, Drug Law Enforcement, Ministry of Justice, and now 

we are in the maritime sector as well. 

26

The work of the EFCC somehow more or less sees the possibility 

of removing the very bad people who have been in control of these 

agencies, put in new people, and then through them will be able 

to somehow have a new way of handling things. 

Prosecution and conviction of corrupt government officials and 

cleansing of the banking sector. This is extremely very important 

in the work we are doing. We believe that unless we start bringing 

people to justice, unless we start showing that there is rule of law, 

order, unless we start bringing the bad people who are responsible 

for the bad things that happen in the country, those who brought 

disrepute, abominate, somehow responsible for the failure. Unless 

we bring them to justice, there is no way, no chance for us to really 

move forward. Nobody will believe whatever step or intent we 

mean to take. In that we are doing fairly well. 

As a result of the work we have done, we have been able to, for 

example, bring the most important, number one law enforcement 

officer in the country, the Inspector General of Police, to justice. We 

seized over $151 million from him. We have brought the President 

of the Senate, the Leader of the National Assembly, the three most 

important persons and popular Senators and Representative members in Nigeria to justice. We have been able to bring two Governors. One of them is a prior State Governor, the one that we 

caught earlier. He is a Governor of one of the oil-producing states 

in Nigeria. We got from him today over 18 billion naira, we got 

from him 23 million pounds, and this we did through the assistance and support of the U.S. Government. We are reporting a fairly 

good, impressive number of convictions so far, particularly with the 

cases of foreign corruption. We have about 56 convictions in a country that never had one up to September 2003. For well over 40 

years of own our independence, we have never had one single conviction for corruption in our country. Today I am proud to tell you 

that we have had 56. It is a real indicator that things have 

changed in our country. 

We have made huge recoveries in terms of money. The work we 

have done today, we have recovered well over $5 billion, money 

that ordinarily would have gone down the drains. Some of the 

money belonging to innocent victims of 419 scams all over the 

world. We are returning such money. We have returned money to 

Brazil, we have returned to Singapore. We have returned to Hong 

Kong and even to the United States. Right now I am planning to 

hand over well over a million dollars to a victim of 419 fraud. We 

are showing by that that Nigeria will no more be a safe haven for 

fraud or fraudulent activities. 

We have helped in setting up the FIU, Financial Intelligence 

Unit. This is very important and critical. It helps us to have control 

and understanding of the finance sector in Nigeria. Through that 

we have been able to understand really the nature of corruption in 

the country, what is going on. And through that, we have been able 

to bring some of the major cases that we have today in our courts. 

We are prosecuting well over 350 cases in our courts, and somehow 

the establishment of the FIU has helped greatly in helping us with 

that initiative. 

We were setting up initially for monetary activities in the oil industry and prevention of illegal banking. We have done fairly well 

27

in that, the EFCC addressing the problem of illegal banking of 

crude oil. In 2003 we had a record of up to 100,000 barrels of oil 

stolen daily in the country. We went in, we were able to bring so 

many of them—we have got up to about 10 convictions. We went 

after about 23 companies. We seized well over 40 tankers. And for 

the first time, for the first time I think we have got a report from 

the LMPC Nigerian oil, national oil company, that the incident of 

theft of crude oil reduced to less than 20,000 barrels a day. These 

are some of the things that we have been doing. 

The lesson with law enforcement agencies, excellent working relationship with law enforcement agencies all over the world. When 

we started working, we believed that for us to really start making 

headway forward, we have to move forward for us to make an impact, we have to ensure that we build a reputation, to be able to 

have the confidence of the international community, particularly 

the law enforcement agencies, and we have got that. We have been 

working closely with, for example, the Metropolitan Police of the 

U.K., the FBI, INTERPOL, and particularly the FBI. It has been 

really, really helpful. 

We have had joint control delivery operations. We have had 

working relations with the United States Drug Enforcement Agency, joint investigation with the Regional Security Office on general 

fraud and visa/passport fraud and FBI Legal Attache in Lagos. 

Several training courses have been organized by United States officials and in different departments of the U.S. Government. 

There exist serious challenges to the continued successful prosecution of the war on corruption in Nigeria. These include: Relatively slow judicial system, the technological complexities in fighting economic crimes in cyberspace, lack of capacity and investigation tools, such as analysis. 

And of course, some of the problems are also external. The availability of safe havens for corrupt Nigerian officials outside the 

country to keep their loot. And this is probably one of the biggest 

problems that is facing fighting corruption, not just Nigeria but indeed African countries. Most of this grand corruption that does 

take place in the country does go out, 80 percent of it. And the moment it is out, we have no control over it. And unless you address 

such, chances are you won’t win the war back home. Revising the 

bad image and real bad position of the country. Lack of cooperation 

from some countries. 

Request of the U.S. authorities. The U.S. and members of the G–

8 should be—and we are acting strongly—be in the forefront of 

building a global coalition against corruption. Make transparency 

and accountability and the fight against corruption the primary 

basis for relating with any government. 

We also ask you to speak out against governments that provide 

safe havens for proceeds of corruption from Nigeria and other developing countries and deny for all persons indicted of graft in Africa. 

The U.S. should also consider the deployment of additional FBI 

agents and other officials or law enforcement officials at the United 

States Embassy in Nigeria and starting collaboration with Nigerian 

law enforcement agencies. This is really helping us greatly. We 

have seen the result of the work we have done with the MetropoliVerDate Mar 21 2002 12:05 Jul 17, 2006 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6601 F:\WORK\AGI\051806\27648.000 HINTREL1 PsN: SHIRL
28

tan Police of London. Some of the major cases that we have been 

able to really achieve is as a result of the support they have given 

us. 

In conclusion, I want to end by drawing attention to the grievous 

harm that corruption has done to Nigeria and Africa over the 

years. Corruption is the reason there has been a perpetual collapse 

of structures and institutions. It is the cause of the endemic poverty in Africa. It is the reason for the underdevelopment and the 

cyclical failure of democracy to take root in Africa. Corruption can 

be as destructive as terrorism. Public officials who are corrupt 

should receive equal treatment reserved for terrorists. Probably if 

you ask me, it has caused more damage than anything. If you see 

what is happening in Africa, in the last few years alone, I can assure you we have lost well over two million people simply because 

of the mismanagement, simply because of the way our leaders handle their own countries. And this is as a result of directly primitive, 

crude corruption that is really more or less the order of the day 

that is happening. 

It is high time we refocus and give issues of corruption the attention they rightly deserve. The challenge before us is to set our 

sights on making corruption, which is a fundamental cause of the 

poverty of the African nations, a part of Africa’s history. Corruption 

has been the missing piece in this worrisome puzzle, and as soon 

as it is tackled everything else will fall into place and poverty will 

definitely become a part of our history. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Ribadu follows:]

PREPARED STATEMENT OF MR. NUHU RIBADU, EXECUTIVE CHAIRMAN, ECONOMIC AND

FINANCIAL CRIMES COMMISSION, FEDERAL REPUBLIC OF NIGERIA

INTRODUCTION

The history of corruption in Nigeria is strongly rooted in the over 29 years of military rule, out of 46 years of her statehood since 1960. Successive Military regimes 

subdued the Rule of law, facilitated the wanton looting of the public treasury, decapitated public institutions and free speech and instituted a secret and opaque culture in the running of government business. The result was total insecurity, poor 

economic management, abuse of human rights, ethnic conflicts and capital flight. 

Democracy was restored in Nigeria only in May 1999, with the election of the Civilian Government of President Olusegun Obasanjo. 

One cardinal Programme of the Obasanjo administration is the fight against corruption and waste in the public service. This, he has demonstrated by the establishment of two major anti-graft institutions, the Independent Corrupt Practices (And 

Other Related Offences) Commission (ICPC) and the Economic and Financial 

Crimes Commission (EFCC) in 2000 and 2003 respectively. 

It is important to note that the fight against corruption is situated within the 

larger economic reform programme of the Government, the National Economic Empowerment and Development Strategy (NEEDS), a home-grown medium-term poverty eradication strategy. NEEDS is an economic and structural reform programme 

designed to bring improved macro-economic stability, better public expenditure management, reduced corruption, increased transparency and improvement in key sectors, including the financial sector. 

THE ANTI-CORRUPTION STRATEGY

The Government’s target is zero tolerance for corruption. This, it has pursued 

through—

• Promulgation of laws against graft—Independent Corrupt Practices And 

(Other Related Offences) Commission (ICPC) Act, Economic and Financial 

Crimes Commission (EFCC) Act, Money Laundering (Prohibition) Act 2004

29

• Strengthening of anti-corruption and other economic crimes Institutions for 

effective law enforcement

• Prosecution and conviction of high ranking administration officials

• Judicial and justice sector reforms

• Tracing, seizing and confiscation of all proceeds of crime

• Public reorientation through targeted advocacy

• Institution of the Due Process Mechanism in public sector procurements

• Privatisation of failing public institutions and creating an enabling environment for effective private-public partnerships

• Monthly publication of distributable revenue from the Federation Account to 

the different tiers of government

• Institution of transparencies in the oil and gas sector through the work of the 

Extractive Industries Transparency Initiative (NEITI) 

Economic and Financial Crimes Commission 

The EFCC which is today the arrow-head in the fight against corruption in Nigeria was established in 2003 as part of a national reform programme to address corruption and money laundering and in answer to the Financial Action Task Force 

(FATF) concerns about Nigeria’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) laws. 

EFCC is an inter-agency Commission comprising a 22-member Board drawn from 

all Nigerian Law Enforcement Agencies (LEAs) and Regulators. The Commission is 

empowered to investigate, prevent and prosecute offenders who engage in

‘‘Money laundering, embezzlement, bribery, looting and any form of corrupt 

practices, illegal arms deal, smuggling, human trafficking, and child labor, illegal oil bunkering, illegal mining, tax evasion, foreign exchange malpractices including counterfeiting of currency, theft of intellectual property and piracy, open 

market abuse, dumping of toxic wastes, and prohibited goods’’

(Section 46, EFCC Establishment Act, 2004)

The Commission is also responsible for identifying, tracing, freezing, confiscating, 

or seizing proceeds derived from terrorist activities. EFCC is also 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. 

In addition to any other law relating to economic and financial crimes, including 

the criminal and penal codes, EFCC is empowered to enforce all the pre-1999 anticorruption and anti-money laundering laws. Punishment prescribed in the EFCC 

Establishment Act range from combination of payment of fine, forfeiture of assets 

and up to five years imprisonment depending on the nature and gravity of the offence. Conviction for terrorist financing and terrorist activities attracts life imprisonment. 

POSITIVE RESULTS SO FAR

Since the establishment of EFCC in 2003, it has been involved in the investigation of cases ranging from high profile corruption cases, advanced fee fraud, money 

laundering, tax evasion, contract scams, identity theft, illegal oil bunkering, bribery, 

looting, and foreign exchange malpractices. 

• Cleansing of the Banking Sub-sector 

EFCC has contributed to the sanitization of the banking sector through investigation and prosecution of Chief Executives and other officials for Money Laundering 

and other frauds. Bank failures which were rampant in the past have now become 

a thing of the past. 

• Reorganization of Critical Agencies of Government 

EFCC has led the drive to clean up and reorganize key agencies and institutions 

of government in Nigeria. The Commission’s work has led to the change of leadership of the most critical agencies such as the Nigeria Police, the Customs and the 

National Drug Law enforcement Agency (NDLEA). The new leadership are driving 

necessary reforms of these vital agencies that were hitherto steeped in corruption. 

• Prosecution and Conviction of Corrupt Top Public Officers 

The Commission has successfully prosecuted and secured convictions against top 

government functionaries, including the former chief law enforcement officer of the 

30

nation, the Inspector-General of Police (IGP). Investigation by EFCC has caused the 

removal from office and prosecution of a Senate President, a Governor, Ministers, 

National Assemblymen, Bank Chief Executives, etc. 

• Record Convictions for ‘419’, Money Laundering and Terrorism 

So far, 56 convictions have been recorded on corruption, money laundering, oil pipeline vandalism and related offences. Assets well over $5 billion have been frozen 

and seized from corrupt officials, their agents and cronies. 

• Recovery and Return of Proceeds of Crime 

The fight against advance fee fraud (419) and identity theft has been aggressively 

pursued, leading to the prosecution and conviction of kingpins including the celebrated $242 million case involving a Brazilian Bank. Much of the sum has been recovered and returned to the Bank in Brazil. 

The EFCC also recovered and returned the sum of $4 million to a victim of 419 

in Hong Kong and has seized and returned over $ 500,000 to sundry US citizens. 

It is in the process of returning $1.6 million (already blocked) to a victim in Florida. 

• Setting up of the FIU and Taking Action against Terrorist Financing 

The fight against money laundering, terrorism and terrorist financing has heightened with the establishment of the Nigerian Financial Intelligence Unit (NFIU) by 

the EFCC. This has helped in the detection of Suspicious Transactions in financial 

institutions. 

The EFCC is coordinating the implementation of the National Strategy Plan 

Against Money Laundering and Terrorist Financing. This has no doubt impressed 

the Financial Action Task Force (FATF) of the G8 whose Review Team only recently 

concluded an on-site visitation to the country with a view to assessing her level of 

compliance in order to have her delisted from its list of Non-Cooperating Countries 

and Terroritories (NCCTs). 

Nigeria is fully in compliance with the UN Convention Against Corruption and 

UN Resolutions on terrorism and terrorist financing particularly Resolution 1247. 

The EFCC on March 3, 2006, froze the assets and properties of Ahmed Idris 

Nasreddin and his associated companies, NASCO Group Nig Ltd. The value of the 

assets frozen is worth over N100 million ($787,402). Two (2) convictions on terror 

have been recorded and the 5 convicts are presently serving 10 years and 3 years 

imprisonment respectively. EFCC also maintains a database on Terrorist Groups, 

individuals, Non-Governmental Organizations (NGOs), etc, and is constantly 

profiling them. 

EFCC has extended the fight against Money Laundering to the Economic Community of West African States (ECOWAS) Sub-region by facilitating the 

operationalization of the FATF-style regional anti-money laundering outfit, the 

Inter-Governmental Action Group Against Money Laundering in Africa (GIABA). 

• Setting up Machinery for Monitoring Activities in the Oil Industry and Prevention 

of Illegal Bunkering 

EFCC is vigorously addressing the nagging problem of illegal oil bunkering and 

pipeline vandalism in the Niger Delta Region. Over 10 convictions on pipeline vandalism have been recorded, 25 trailers (instrumentalities of crime) seized and confiscated and accounts of beneficiaries blocked. 

• Partnership with Microsoft against Internet Scam and Identity Theft 

EFCC has deployed technology to combat cyber crimes and is presently working 

in partnership with Microsoft to find appropriate software to definitively address 

the problem. 

• Capacity Building for Law Enforcement and Judicial Officials 

Capacity building is key in the fight against graft. EFCC has responded by establishing a state-of-the-art Training and Research Institute in Karu, Abuja, for the 

training of its officials and those of other stakeholders. 

EFCC has also assisted through donor agencies with the training of judges handling cases of corruption, money laundering and other financial crimes. This has 

helped to reduce the trial cycle-time. 

RELATIONSHIP WITH LAW ENFORCEMENT AUTHORITIES (LEAS)

EFCC has excellent working relationship with major Law Enforcement Agencies 

all over the world. These include the INTERPOL, the UK Metropolitan Police, FBI, 

Canadian Mounted Police, the Scorpions of South Africa, etc. 

The relationship with the FBI has been particularly special. This has manifested 

in the following:

31

• Joint Controlled delivery operations and investigations with officers of the US 

Postal Inspections Service

• Joint Investigations and collaboration with the Resident Regional Agent of 

the United States Secret Service, Pretoria, South Africa, especially in cases 

of document and currency counterfeiting

• Working relationship with the United States Drug Law Enforcement Agency

• Joint Investigation with the Regional Security Office on general fraud and 

Visa/passport fraud

• Joint Investigation with the FBI Legal Attache ́ and the FBI Internet crime 

Complaint Centre

• Extradition proceedings commenced in respect of a Suspect (Nigerian-American) wanted in the United States for child abuse

• Collaboration and information sharing with the Attorney’s Office, Brooklyn, 

New York

• Several training courses organized by the US officials on Cyber-crime, Money 

Laundering, Public Corruption, Counterfeiting, Identity Theft, etc. 

OTHER ANTI-CORRPUTION INITIATIVES OF THE NIGERIAN GOVERNMENT

The work of the Nigeria Extractive Industries Initiative (NEITI) has opened up 

the oil and gas sector through its landmark independent audit conducted by Hart 

Group. The audit had a three-pronged component—Physical, Financial and Process. 

The result of the audit revealed discrepancies in physical hydrocarbon balances and 

declared volumes for royalty purposes, physical hydrocarbon balances and the declared volumes for Petroleum Profit Tax (PPT) purposes, deductions claimed by 

Companies for PPT purposes against the expenditures in their audited accounts and 

differences between the amounts reported by the Companies as paid and the 

amounts reported by the CBN as received. 

Other revelations of the audit Report include:

(a). Defective metering infrastructure

(b). Wide differences used by oil Companies for royalty and PPT

(c). Contradictions in Gas investment and incentives which appear to be inconsistent with the PPT Act and the Companies Income Tax.

A whole range of recommendations have been outlined to address the above deficiencies. By the time-table set by the National Stakeholders’ Working Group 

(NSWG) of the NEITI, all reconciliations of the discrepancies are to be completed 

by June 14, 2006. The work of this body for the first time is enabling Nigerians 

know how revenue from oil and gas is determined ands how much has accrued to 

the nation. 

The Due Process mechanism has in 3 years saved the nation over $3 billion which 

would have been lost through inflated contracts. The Process has also introduced 

local and international competitive bidding for government contracts. Formalization 

of the process through a law is now awaiting passage by the National Assembly. 

Nigeria is listed as one of the 21 most improved nations in 2005. More importantly, the 2005 World Economic Forum and World Bank Governance Surveys by 

Dr. Danny Kaufman indicated significant improvements on Corruption, Public Procurement, Public Finances, Taxation, etc. 

The Rule of law has been substantially restored and Nigerians are once more, regaining their confidence in the justice system. The restoration of the Rule of law 

and the fight against graft has manifested in the improved rating by Transparency 

International (TI) and Direct Foreign Investment (DFI) inflows into the country. 

This is also manifest in the high support received from the international donor community including the World Bank, the European Union and the Commonwealth Secretariat. The European Union through the UNODC is today, implementing perhaps, 

the biggest donor project in Nigeria involving $32 million. This project aims to improve EFCC capacity in investigating and prosecuting corruption and other economic crimes. In addition, it will help equip the NFIU with the best available technology on AML/CFT. 

CHALLENGES OF FIGHTING CORRUPTION IN NIGERIA

There exist serious challenges to the continued successful prosecution of the war 

on corruption in Nigeria. These include: 

Internal 

• Relatively slow Judicial system

32

• The technological complexities in fighting economic crimes in the cyber space

• Lack of capacity and investigation tools such as analyses tools, financial 

transactions software, etc 

External 

• The availability of safe havens for corrupt Nigerian officials to keep their loot 

abroad

• Reversing the bad perception of the country

• Lack of cooperation from some countries 

REQUEST TO THE US AUTHORITIES

1. The US and members of the G8 must be in the forefront of building a global 

coalition against corruption. Make transparency and accountability and the 

fight against corruption the primary basis for relating with any government

2. The US must speak out against countries that provide safe havens for proceeds of corruption from Nigeria and other developing countries. It ought to 

be a condition that your government will have no relationship with countries 

where grand corruption is prevalent and, those whose financial institutions 

provide safe havens for proceeds of crime

3. The government of the United States should support and empower local 

agencies on the ground, through capacity building and technical assistance

4. I will also implore you to make it a matter of policy to deny entrance to your 

country of all those persons who have been indicted of graft in Africa. The 

honour which they do not deserve at home should not be accorded them 

abroad

5. The US Authorities should also consider the deployment of additional FBI 

Agents at the US Embassy in Nigeria and strengthen collaborative initiatives between agencies fighting corruption in Nigeria and all law enforcement agencies and the Justice Department in the US. This will expedite requests for assistance made to US Authorities on economic crimes. The huge 

population of Nigeria (150 million) and the relatively high rate of white collar crimes in Nigeria justify this request.

While we seek more support for the monumental changes happening in Nigeria, 

we are happy that certain critical international agencies and governments are acknowledging the effort at tackling corruption and money laundering and recognizing 

that things are changing for the better, as evidenced in the following encouraging 

comments:

‘‘Nigeria is a prime example of what can happen when leaders finally say no 

‘‘Enough!’’ to rampant corruption. I therefore salute Nigerian President 

Obasanjo’s ‘‘Zero Tolerance’’ initiative that has triggered high level resignations, 

arrests, and indictments’’. 

—Antonio Maria Costa, Executive Director, United Nations Office on Drugs 

and Crime

‘‘Finally, thank you very much for your assurances that the £3m which we recently transferred is all being used to support the Economic and Financial 

Crimes Commission (EFCC). The ongoing work of the Commission and its head 

are very important to the way in which Nigeria is perceived internationally. I 

much admire your decision to establish the EFCC and give it your personal 

backing’’. 

—Mr. Tony Blair to President Olusegun Obasanjo 

CONCLUSION

I want to end by drawing attention to the grievous harm that corruption has done 

to Nigeria and Africa over the years. Corruption is the reason why there had been 

a perpetual collapse of infrastructure and institutions; it is the cause of the endemic 

poverty in Africa; it is the reason for the underdevelopment and the cyclical failure 

of democracy to take root in Africa. Corruption is worse than terrorism. Public officials who are corrupt should receive worse treatment than that reserved for terrorist. 

It is high time we refocus and give issues of corruption the attention they rightly 

deserve. The challenge before us is to set our sights on making corruption, rather 

than poverty or any other socio-economic malaise, history. For, as soon as we do so, 

everything else, like a worrisome jigsaw puzzle, will fall in place. Making corruption 

history is the surest way of making all the problems of Nigeria and Africa history. 

33

Thank you for your time

Mr. SMITH OF NEW JERSEY. Thank you so much again. 

Mr. RIBADU. Thank you very much for the opportunity to share 

with you. 

Mr. SMITH OF NEW JERSEY. Thank you. Let me ask you a few 

questions if I could, beginning—you mentioned in passing that the 

U.S. law enforcement assets have worked cooperatively with you. 

Is it to the maximum extent, are you satisfied that when it comes 

to dealing with the American bank accounts and other places 

where this money may have been deposited, that the FBI, DEA, 

and others are working well? Could you elaborate on that? 

Secondly, some complain about the Governor of Bayelsa—and did you mention him a moment ago—I think it was $22 million that 

had been stolen or had ripped off in some way. Some say he had 

been targeted, but other Delta governors not hostile to Obasanjo 

had been left alone. Is there any validity to that? 

And finally on the issue of bidding, bidding in any country of the 

world is an area where if there is not real transparency, whether 

it be procurement with the U.S. Government or anywhere else, it 

lends itself to corruption. If you write the regulations, if you write 

the specifications for a bid, and you have an inside job going, you 

get the bid. What is being done to target that? 

Mr. RIBADU. Well, thank you. There are three questions there. 

First is on the relation with the law enforcement, particularly FBI. 

We have been working. I will really be getting the support, especially at that local level, the Attache in Lagos, we have had very 

good support, but we really need more. We think that for us to 

make an impact, to make a difference, we will definitely have to 

get the support of very powerful—those with the means to be able 

to really give us the support for us to survive back home. We have 

had the greatest support, for example, from the Metropolitan Police 

in the U.K. They gave us almost unfettered, really open support. 

Whatever we wanted is just for us to ask, and we have got it. 

Through that, we have been able to bring so many people to justice, 

including the Governor of Bayelsa. He was detained by the Metropolitan Police. He was arrested in London. The money was seized 

by the Metropolitan Police, some part of the money, and we know 

for a fact that some of his properties and money in the U.S., for 

example, we have been trying to get the support to go after it. Up 

to now, we have yet to get that. 

Mr. SMITH OF NEW JERSEY. Are the U.S. authorities indifferent? 

Mr. RIBADU. Through the Metropolitan Police, we asked for support as far back as 6 months ago. Up to now we have not received 

any response. The important thing here is that some such people 

do enjoy immunity in our country. We find it extremely difficult to 

bring them to justice as a result of constitutional immunity, but 

they do not enjoy immunity outside and that is why they take the 

money out. Unless we get support from outside to ensure that they 

will not just get away with it, that the money they have taken out 

will not be—will not have a safe haven anywhere, we may never 

bring them back to justice in Nigeria because of the immunity they 

enjoy. It is a constitutional immunity. 

Mr. SMITH OF NEW JERSEY. Are there several cases where you 

have sought help from the U.S. and did not get it? 

34

Mr. RIBADU. We have got fairly good support from the local Legal 

Attache in Lagos, but in Washington here, unfortunately no, not 

much. I have been here about three times, requesting such support. 

But somehow it has not been 100 percent forthcoming really. And 

it is——

Mr. SMITH OF NEW JERSEY. Without compromising those investigations, could you provide us examples? 

Mr. RIBADU. For example, we talk about the Eboli case, the one 

that you said we are likely—why up to now we have not gone after 

him. We are in need. We have gone very far. We are almost to the 

end of it. We ask for assistance here. Somehow no. 

We are investigating a case involving Halliburton also. We have 

yet to get any support. The case involving two other governors—

because some of these cases are not yet out, we are constrained in 

making them public. We have yet to get support. 

I have been to the Justice Department. I have been to some of 

the key law enforcement agencies here, but there is always very 

good support. This is the first question I think. 

Somehow we have got, but we can still do with more support and 

particularly working relation, working cooperation. This is more 

important than anything. If there is a possibility, for example, if 

you ask for something, it will be given, it will be assisted. You do 

have the capacity to really get anything anywhere in the world, 

and some of these people do also—somehow directly. They are 

bringing some of these things, this process into the U.S. And we 

have been able to identify some of them, and really, really to make 

a huge, huge difference. 

I think the second question is in respect to whether we have 

been selective in the way we are enforcing. So we have been—this 

is probably the most difficult work you can ever do in the world, 

fighting corruption, especially in an environment like our own. It 

has been going on for a very, very long time. 

In the last 3 years, we have been accused of everything. They 

will say that we are taking sides because of religion, one. They will 

go again, talk about tribes, typical of Africa. And now they are 

talking about politics, simply because they want to escape justice. 

They are used to money corruption to frustrate because of justice. 

Somehow it is not working with EFCC. It is a case of giving a dog 

a bad name in order to hang it. 

I want to ask anybody anywhere in the world, including Nigeria, 

to mention one single case that we have gone after, any person, 

simply because of his political belief. All the people we have 

brought to justice, especially the very powerful ones, are those that 

are extremely close to the President, close to the power. We have 

not taken—up to today—one single case from opposition, not a single case of any individual in the opposition. We brought the cheap 

law officer who is very close to the President, the Senate President, 

all these people are in the same party. 

But sir, the issue is simply whether what we have is a case that 

we can make public, transparently, and show the work we are 

doing in defense. Some of them are using it to really escape justice. 

It has become a fashionable thing now. Anybody you touch is because I am against the position of Mr. President or I am against 

that. It is part of somehow what has been going on in our country 

35

in the last 40-some years. They don’t want it. They will do anything to escape it. And it is easy for them to really say whatever 

you are doing is simply because of any other reason but not because of what they have done before—I mean, what they are asked 

to account for. 

On the third issue of the transparency in the process of the meeting, Nigeria has changed. We have never had what we have today. 

Getting immunity is just taking and giving to friends, girlfriends 

and business associates. For the first time, we have a process that 

is opening up, accountable. For the first time, we are bringing 

international reputable companies to come and oversee and supervise the whole process. For the first time, best time that is brought 

to the system, but it is growing. It is not something that we can 

say is on time, no. We are improving daily. It is all part of this 

global approach to solving our problems. We are working hard in 

establishing rule of law, transparency and accountability in the 

system. And through that, I believe most of these problems will—

as a matter of time, but it is opening up. The process is improving 

daily. It is part of this EITI. We in Nigeria want to be at the forefront of implementing it. Today we have implemented it more than 

any country in the world today, and I think it is a testimony of the 

resolve of the government and people of Nigeria that enough is 

enough. 

We suffer because of distance. We are the ones that should 

change. We are the ones that are not getting money for the resources we have. And we know that until we start opening up, 

cleaning, distribution order, doing things properly and correctly, we 

will not be able to solve our own problems. We do have enough to 

take care of ourselves. Mismanagement did not allow us for a 

while, but things are changing, sir. And I think this is the direction 

Nigeria is moving now. 

Mr. PAYNE. Thank you very much. And let me certainly commend you for the report that you have given, and the importance 

that you have given to your position. I just have a question. You 

indicated that the U.S. authorities in some instances have not cooperated with your requests. I would like to, once again, get the information from you about the cases on individuals that you would 

like to have cooperation on, and I think that we should have our 

Committee request those agencies to cooperate. We don’t necessarily need it to be discussed here in the public. 

Mr. RIBADU. Yes, sir. 

Mr. PAYNE. But I would be happy to work with the Chairman to 

write to our—whether it is our banking authorities. And if they 

refuse, maybe we need to bring them before the Committee to ask 

them questions about why are they not cooperating. Since we are 

always lecturing about transparency and anti-corruption, then how 

could some of our agencies in the U.S. Government refuse to cooperate or our banking colleagues and fellows. So we would like to 

certainly follow up on that. 

Mr. RIBADU. Thank you very much. 

Mr. PAYNE. The Sani Abacha family has indicated it is estimated 

that $3.5 billion was—up to $5.5 billion was stolen. What is the 

current status of Abacha’s estate? And are the European governVerDate Mar 21 2002 12:05 Jul 17, 2006 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6601 F:\WORK\AGI\051806\27648.000 HINTREL1 PsN: SHIRL
36

ments, banks or others cooperating? And how much has been recovered? I saw a $64 million amount, but is there more? 

Mr. RIBADU. Well, sir, EFCC was established about 3 years ago. 

So it was handled by a different agency before our establishment, 

but I know a bit of it, and I have worked in some areas of it but 

not totally. I can confirm to you that we have recovered well over 

$1 billion so far, part of it from Switzerland and a substantial part 

of it from Jersey, Leicester in the U.K., but we believe still about 

$2 to $3 billion is still out there yet to be recovered. 

His son, one of his children is right now in prison, in prison custody in Switzerland, going to go through a criminal trial. Back 

home in Nigeria, when we started working, we decided to go after 

some of the things that we have never known, I mean were never 

revealed. Some of the shares they had in companies in Nigeria. We 

recovered about $2 billion naira, a hundred and something million 

dollars as a result of these initiatives. We are going after some of 

his relatives, including two of his brothers who run out of the country. This is the work of the EFCC. But we believe that—to sum up—maybe as much as $6 billion 

was lost as a result of control of the economy. We intend to continue to pursue this case. We intend to—we will not rest. We are 

going to follow up. We have had difficulty in the cooperation with 

some other countries, Switzerland for a while, until things changed 

not long ago. We had sort of a delay in going after the process in 

the U.K., up to a point where most of the money was taken out, 

and somehow some of it had been taken to other jurisdictions. 

We do have difficulty with France, probably is the biggest problem that we have. For example, we are going after one of the very 

key individuals involved, who was his Minister of Petroleum. He 

today is living in Paris, but to get to him it has been extremely difficult. Some real frustrations. 

But then it is just like a reflection of almost all other—I mean 

the work we are doing. A country in Africa usually finds it extremely difficult to get the support of, particularly the countries 

where most is there. 

It is not just Nigeria. It is Kenya, Tanzania. It is all the other 

countries. We all face more or less the same problems. That is why 

when we started working in the EFCC we started to build our confidence in law enforcement of different jurisdictions by telling 

them, look, we are extremely serious. If you want to help us and 

assist us by solving the problems, this is the best way to go about 

it. Nothing can change things in Africa but to fight and help us to 

establish a law and order rule of law, transparency and accountability, good governance in short. And if the world will understand 

that, then maybe this is the smartest way, the cheapest way to address the problems that they leave when here we are talking about 

AIDS, talking about the killings, talking about—most of these really are symptoms, but the big problem is the corruption, the mismanagement. 

If there would be a way that the world would come and understand that and give the support, fight it, and it can be fought, as 

we are showing in Nigeria today. We have demonstrated it can 

really be done, and it is not going to be very costly even. If there 

is going to be a global coalition, sort of a global understanding, a 

37

resolve that we are not going to tolerate mismanagement again, we 

are not going to tolerate poor governance, we are not going to tolerate despotic leadership, you are indirectly solving the problems 

or problem of poverty. You are indirectly solving the problem of 

AIDS. 

What is the problem of AIDS? It is simply lack of education. It 

is simply because the hospitals are not there. It is simply because 

the roads to really get things across are not there. Until you solve 

this, until you get awareness, until you get property, and you can 

never get it until you have order. Unless you have sort of openness 

and following rules and transparency, never. Whatever resources 

that are pumped in there are going to go down the drain, is going 

to go to waste. 

The first and fundamental thing is to address the issue of getting—as to do things properly and correctly. And this is really, 

really critical. It is very key in solving and understanding the problems facing Nigeria and, indeed, Africa. 

On the issue of the specific cases, some of them are more or less 

waiting to go to trial. It will be maybe at the closing, might want 

to tell you some of the cases. We ask for support and somehow we 

have not been—I mention a couple of them, for example, involving 

a couple of governors in Nigeria. We ask specifically that we are 

here to get a response. 

The case involving even the one who is right now facing criminal 

trial, the Governor of Bayelsa. Only 3 weeks ago we got information that someone attempted to take money from the account in the 

United States here. This is part of the problem. We never got really 

to go after it. But in the U.K., the entirety of the properties and 

money has been seized. We have succeeded in getting that done in 

South Africa, and in the Netherlands as well, but we have yet to 

get anything done in the United States. This is just one case that 

is out. But we have several, and maybe I don’t have to reveal it, 

sir, because it is like opening up for them to know what is going 

on. Some of them are very powerful, very, and so on. Maybe it will 

just give them the signal what is going on, but maybe at the close, 

something, I will be able to share such information with you. 

Mr. PAYNE. Well, thank you very much. I really appreciate it. I 

didn’t want to press the other question of—it was alleged before 

about some gratuities for persons to try to vote against the referendum or vote for the third term. However, they were defeated, 

but there was allegations that the funds were taken out of the Central Bank, and it was alleged that it was going to attempt to pay 

some government parliamentarians to vote for a third term. Have 

you heard any of that allegation? 

Mr. RIBADU. Yes, we had, sir, and we are investigating. The very 

moment we got to hear about it, we learned about the investigation. We went to almost all the banks in Abuja. That is the Federal 

capital. We have seized the records and proceeds—I mean most of 

the banks. We went into the strong rooms, and we took account of 

whatever. And we did that with the Central Bank as well. That is 

EFCC. We have done a couple of very similar cases, you may be 

aware that the Senate, former Senate Member is today standing 

trial. It is a very similar happening. It is almost exactly like that. 

We have done it before, and we intend to do it again. We have alVerDate Mar 21 2002 12:05 Jul 17, 2006 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6601 F:\WORK\AGI\051806\27648.000 HINTREL1 PsN: SHIRL
38

ready started. We have gone extremely far. I am going to talk to 

my own office in Abuja. We know we took in two people today, in 

direct connection to the issue. But at the same time, we even investigated Obasanjo. We even took testimony, a deposition from Mr. 

Obasanjo. 

So in Nigeria, I can confidently tell you, nobody is above the law, 

and we are doing this honestly, honestly. We believe we have to do 

it for us really to face our own problems and change them. It is for 

our own selves. There is a change in the country, and even the failure of the whole process is a testimony that things have changed. 

I don’t think there is any country in the poor African continent 

where if money is spent you cannot get the constitution changed 

to allow a leader to continue, but it has failed in Nigeria. It is a 

message. It is a huge, big sort of signal that things are no longer 

as they used to be. Even if money was spent, definitely the money 

did not make an impact, and this is a big, big, big impact. And I 

think it is as a result of the happenings in the country in the last 

2 to 3 years. 

Nigeria has changed. What we need is the support of the world 

to move forward with what is going on in the country today. I can 

give you the assurance that nobody—and I mean it—nobody will 

ever say that he is going to be above the law again in Nigeria. And 

this is fundamental. Unless we do it, there is no hope for the country, but I can give you the assurance, the resolve of us. Fundamentally, we are not bad people. A few individuals made a mess of our 

name, our history, our reputation, and some of us are extremely 

very angry, and there are so many of us like that. The majority of 

Nigerians are good people, hard working, who want to improve 

things for themselves and for their own people and their own families and that we know if we do not do that, maybe there is no hope 

for Africa even because we occupy a very particular central position 

in Africa. 

If things continue to go wrong in Nigeria, I can give you the assurance there is no hope for the rest of the continent. We know 

that responsibility is on us. We know that we have really been unfairly, unfairly treated by our leaders in the past, and we are not 

going to take it alone. Enough is enough. So the issue of anybody 

using anybody is not there. Definitely, no. It will not work. 

Mr. PAYNE. Let me really commend you for your courage, and 

you are a breath of fresh air, if nothing else, for this hearing. We 

have heard the ugly stories about the greed and the robbery and 

the stealing and so forth. However, to hear you talk about the new 

Nigeria and for you to be so committed to eliminating corruption, 

I think that what has happened in the past has happened. Try to 

bring people to justice. However, I think that your statement here 

today, if that is the new Nigeria, the Nigeria will be what it was 

intended to be, one of the greatest nations in the world because you 

have the people, you have the resources, you have the natural resources, you have—God has blessed Nigeria. And your words and 

the new Nigeria—if you are an example of it—will certainly be a 

world leader tomorrow. 

Mr. RIBADU. Thank you very much. 

Mr. SMITH OF NEW JERSEY. Let me just conclude as well by 

thanking you not just for your courage, but also for your passion, 

39

and I would agree with my friend and colleague that it gives all 

of us great hope for Nigeria. As a matter of fact, when Greg 

Simpkins met with you just about 3 weeks ago, he came back saying, ‘‘You have got to meet this man.’’ And it is at his request that 

you are here, and I think the entire Congress needs to hear you. 

And again, in follow-up to the lack of cooperation on those specific 

cases, whatever it is you would like to make available to us in a 

confidential way, we will talk to people in Justice and State to ensure that that cooperation is robust and thorough. It seems to me 

that we should be absolutely working overtime to ensure that those 

who are breaking the law and robbing Nigeria of its future—and 

if we can be a part of putting them behind bars and reclaiming 

that money for the people of Nigeria, we have got to do our part 

as well. 

So thank you so much. 

Mr. RIBADU. Thank you very much. Thank you. 

Mr. SMITH OF NEW JERSEY. It has been great having you. 

I would like to invite our third panel, beginning with Mr. David 

Goldwyn, who is President of Goldwyn International Strategies, an 

international energy consulting firm. Through GIS, he has advised 

the Federal Government of Nigeria on its Extractive Industries 

Transparency Initiative. Mr. Goldwyn has authored a series of 

works on energy issues, including a new book, Energy and Security: 

Towards a New Foreign Policy Strategy. 

We will then hear from Dr. George Ayittey, a native of Ghana, 

who is a distinguished economist at American University and 

President of the Free Africa Foundation, both in Washington, D.C. 

Previously he was National Fellow at the Hoover Institution at 

Stanford University. He has published several books including, Africa: Indigenous African Institutions and Africa Unchained. 

Mr. Goldwyn, if you could begin. 

STATEMENT OF MR. DAVID GOLDWYN, PRESIDENT, GOLDWYN 

INTERNATIONAL STRATEGIES 

Mr. GOLDWYN. Mr. Chairman, Members of the Committee, thank 

you for the invitation to be here. You have already read some of 

the best parts of my statement, Mr. Chairman. So I will be very 

brief. 

Let me start by saying it was a privilege for me to be able to assist Nigeria in designing and implementing this effort. This is 

called part of—it is the Nigeria Extractive Industries Transparency 

Initiative, or NEITI. EITI is a very important minimum standard 

for transparence in the world. Disclosing revenues, auditing both—

independently auditing both government and state-owned enterprises, is designed to empower people to hold their governments accountable. But in Nigeria the problem was much bigger. In Nigeria, 

basically nobody trusts the system. Nobody trusts the companies. 

Nobody trusts the government. Nobody trusts the regulatory agencies. So when they set out to design an audit, they decided to look 

at the entire system, from the time the oil comes out of the wellhead to where it is turned into cash, to where it goes when it is 

exported from the country and whether it ends up in the Central 

Bank. They could have just looked at a year or 2, but they decided 

to look at the whole Obasanjo term at that time, which was 5 

40

years, which was a large undertaking, extremely ambitious and 

also courageous, courageous by the President I think, President 

Obasanjo, because I think they all knew that this would expose 

deep weaknesses in basically every part of government. It was courageous on the part of Obi Ezekwisili, who was Special Assistant 

to the President and now the Minister of Solid Minerals, because 

it was a fight to push this through and to get the kind of disclosure 

that she wanted, and the Nigerian system far exceeds the ITI principles, far exceeds anything done anywhere in the world. I mean, 

they have published into this aggregated way every well, what 

every company pays, what they pay for, and they have looked at 

every government process. 

The audit was just released, and I think the discrepancies tend 

to obscure the success. So let me talk a little bit about the success. 

Ninety-eight percent of revenues were in fact reconciled. That 

means they reconciled how much oil came out of the terminals, how 

much oil got sold, where it got sold, and the cash ended up in the 

Central Bank. Two percent, when you are talking about last year 

$24 billion in federation revenue, is a lot of money. There are discrepancies, but in fact they found, they did reconcile enormous 

amount of flows. They reconciled the net liftings. They would ask 

people to get access to the way all these government agencies operate, and they were able to expose tremendous weaknesses. And I 

think that is a huge accomplishment, that they got that done, and 

that they had it published on the Web, and that they are taking 

actions. 

Of course what it exposed was enormous weaknesses all over the 

government, all weaknesses in the way their internal revenue system, the FIRS audits in the way their internal revenue system, 

their regulator really doesn’t regulate. It exposed that there really 

is no system for measuring oil that comes out of the wellhead, only 

the terminal, which means nobody has a number, a real number 

on how much oil is being stolen. And the companies will say, you 

know, all kinds of things come out of the wellhead, water and gas 

and all kinds of other things. No one is saying you ought to pay 

royalty on what comes out of the wellhead, but you need to know 

how much is being stolen because that is a big problem for the 

United States and for the region as well. They did find incredible 

discrepancies for years and the Central Bank recorded more payments than the companies indicate that they paid, and years—in 

2002 in particular $212 million I think in net payments were reported paid by the companies but didn’t end up in the Central 

Bank. Does that mean there is corruption? We actually don’t know. 

There was a tremendous amount of poor recordkeeping and 

misreporting that the auditors found throughout the course of the 

year, you know, things that were recorded in the wrong category. 

Investigations now will take place to see what happened, but it 

is really a tremendous accomplishment which no one has ever, has 

ever accomplished to highlight all these weaknesses. 

What did it generate? It generated an enormous menu of things 

that needed change, from change in the business processes of basically every part of government that deals with the oil industry, 

changes in the way Nigeria decides what projects to invest in. They 

don’t actually act as an effective partner in the joint ventures beVerDate Mar 21 2002 12:05 Jul 17, 2006 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6601 F:\WORK\AGI\051806\27648.000 HINTREL1 PsN: SHIRL
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cause they don’t make strategic decisions about which projects are 

the best projects. And so a number of things have to happen to implement these changes. 

The President has heard the report and directed the NEITI to 

proceed with a plan to implement all of these changes. The law 

that will institutionalize this, the NEITI law has been passed by 

the House but not the Senate. That needs to be passed. They need 

to prioritize which reforms will takes place. They need to communicate the results to the Nigerian people so this empowerment actually takes place. They need to modernize virtually every agency 

and government, and they need to audit 2005 and figure out 

whether any of the changes which have been recommended have 

been made. 

This leads me to what the U.S. can do. Good governance is really 

expensive. And I heard my colleague from the U.S. Government say 

they gave a million or a $1.7 for EITI. I believe that was the worldwide, and there are a lot of countries trying to do that. There is 

a big program in Nigeria, but it is not supporting EITI. The audit 

cost over $2 million. A communications strategy, a minimal one, to 

communicate to Nigerians might cost a half a million dollars. Modernizing the information technology systems for the petroleum revenue, that could cost $10 million. The United States doesn’t have 

to pay for all this, shouldn’t pay for all this. Nigerians will pay for 

a lot of this, but getting this thing off the ground, getting the technical advice to help countries do this is really expensive, and a million dollars, $2 million, especially worldwide, just doesn’t cut it. 

And I think, as you said, Mr. Chairman, we talked to a lot of 

countries about you need to be more transparent, you need to fight 

corruption. Well, they are doing it in Nigeria or they are trying. 

Now we will see them implement what has been presented to them, 

but there are lots of things the United States can do. 

The first thing is we ought to have some acknowledgement by 

the Secretary of State, by the President that wow, this is a really 

tremendous accomplishment, and Nigeria should be complimented 

for it. Didn’t really make the news, and I think it should. 

Second, we should support EITI even though it is a minimum 

standard, and we should do much more, more than G–8 statements 

in Evian because, you know, I participated in five of those. They 

are done once they are over. You have the communique, but to concretely support it, which means the Secretary of State needs to talk 

about it when she talks to another leader. The President needs to 

talk about it when he talks to another leader. That doesn’t happen 

right now. We ought to contribute to the World Bank’s EITI trust 

fund because they are helping countries all over the world. And we 

don’t have to care about all these countries, but we can at least 

contribute the way the U.K. And Norway and others have to have 

this happen, but I think we ought to step up and help Nigeria. We 

have technical assistance in all these areas where they don’t. Public diplomacy, how to do a communications strategy, how to modernize a regulatory system, how to implement transparent regulations, you know, how to conduct, you know, to build your IRS up 

so you can conduct effective audits. 

You know, we have got the world standard on all these things. 

We could send people over there. We could help with technical supVerDate Mar 21 2002 12:05 Jul 17, 2006 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6601 F:\WORK\AGI\051806\27648.000 HINTREL1 PsN: SHIRL
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port. It is not about the money. It is about the quality of the advice. So I think Nigeria has accomplished something, something 

tremendous. They still have to implement it, and we ought to hold 

them to that as a country, but I think after telling so many people 

what to do, when somebody actually steps up and does it, we ought 

to be there to help. 

Thank you. 

[The prepared statement of Mr. Goldwyn follows:]

PREPARED STATEMENT OF MR. DAVID GOLDWYN, PRESIDENT, GOLDWYN

INTERNATIONAL STRATEGIES

NIGERIA’S STRUGGLE WITH CORRUPTION: THE SUCCESS OF NIGERIA EXTRACTIVE

INDUSTRIES TRANSPARENCY INITIATIVE

It is my pleasure to testify today on Nigeria’s struggle with corruption. I have had 

the honor of advising Nigeria on the design, management and implementation of the 

audit they conducted in Nigeria’s indigenous version of the Extractive Industries 

Transparency Initiative (NEITI). The NEITI process, launched in 2004, is the most 

comprehensive transparency program ever attempted under EITI auspices. Their efforts culminated last month in the publication of three audits that examined private 

sector and government participation in Nigeria’s extractive industries from 1999–

2004. It was a remarkable feat of political courage. Nigeria’s leaders were keenly 

aware that the audits would reveal great weaknesses in government systems in a 

very public way yet they sought to make the audit as broad and deep as possible. 

The government and NEITI are now addressing the weaknesses in government 

oversight systems highlighted by the audit, evaluating how to implement the numerous reforms they recommended and addressing the discrepancies revealed by the 

audits. Today I will talk about what EITI is, what Nigeria’s program aspires to accomplish, its progress to date and what US can and should do to help. 

What is EITI? 

In 2002 the UK Prime Minister, Tony Blair, announced the establishment of the 

Extractive Industries Transparency Initiative (EITI). This global initiative supports 

improved governance in resource rich countries through verifying and publishing 

company payments and government revenues from the oil, gas and mining sectors. 

The belief that underlies EITI is that the provision of information is a form of empowerment, and that implementing EITI will help to ensure that natural resource 

revenues contribute to sustainable development and poverty reduction. 

Resource rich states have traditionally suffered from poor governance. The problem, called the resource curse or ‘‘paradox of plenty’’, is that governments that earn 

revenues from selling off natural resources are not accountable to their citizens because they do not need to tax them to run the government or the country. The nonoil sector atrophies. Governments tend to steal and squander monies they do have 

available. Governments employ anti-democratic methods to obtain and maintain 

power. By making revenues transparent, citizens can hold their governments accountable for natural resource wealth. A public understanding of government revenues and expenditures over time should encourage public debate and inform the selection of appropriate and realistic options for sustainable development. 

EITI is a multi-stakeholder process. The theory is that all stakeholders have important and relevant contributions to make—including governments and their agencies, extractive industry companies, service companies, multilateral organizations, 

financial organizations, investors, and non-governmental organizations. EITI is not 

a cure all, but rather a minimum standard. EITI presupposes that a broadly consistent, simple and workable approach to the disclosure of payments and revenues 

is necessary and that it should involve all extractive industry companies operating 

in a country. 

Structurally, EITI is made up of a coalition of governments, including France, 

Norway, the G8 and UK; companies, such as Anglo American, Barrick Gold, BG 

group, BHP Billiton, BP, Burren Energy, Chevron, Eni, ExxonMobil, Hess Corporation, Lonmin, Marathon, Newmont, Norsk Hydro, Repsol YPF, Rio Tinto, Shell, 

Statoil, Talisman Energy, TOTAL, Woodside, Xstrata; civil society groups, investors 

and international organizations including the European Bank of Reconstruction and 

Development, the International Monetary Fund, the World Bank Group, and the 

OECD. EITI is supported by an International Secretariat based in the UK’s Department for International Development (DFID). 

43

Since its inception, nearly 20 countries have endorsed EITI principles and criteria 

as delineated in the EITI source book, which can be obtained at http://

www.eitransparency.org/keydocuments.htm. The EITI stakeholders are working to 

ensure that the EITI brand is meaningful. In 2005 the Initiative set out six criteria 

for countries implementing EITI. They are as follows:

1. Regular publication of all material oil, gas and mining payments by companies to governments (‘‘payments’’) and all material revenues received by governments from oil, gas and mining companies (‘‘revenues’’) to a wide audience 

in a publicly accessible, comprehensive and comprehensible manner.

2. Where such audits do not already exist, payments and revenues are the subject of a credible, independent audit, applying international auditing standards.

3. Payments and revenues are reconciled by a credible, independent administrator, applying international auditing standards and with publication of the 

administrator’s opinion regarding that reconciliation including discrepancies, 

should any be identified.

4. This approach is extended to all companies including state-owned enterprises.

5. Civil society is actively engaged as a participant in the design, monitoring 

and evaluation of this process and contributes towards public debate.

6. A public, financially sustainable work plan for all the above is developed by 

the host government, with assistance from the international financial institutions where required, including measurable targets, a timetable for implementation, and an assessment of potential capacity constraints.

It takes time to get this kind of process off the ground. Countries go through six 

stages: sign up, set up, process development, disclosure and publication, public dissemination and discussion and review. Some countries are only beginning to launch 

the process; far fewer have published audits. Nigeria is essentially at stage six. 

The goals of NEITI far exceed the criteria mandated by EITI. Nigeria has taken 

the transparency initiative to a new level by expanding the program to audit the 

physical flow of hydrocarbons and by taking a holistic approach to examining the 

energy sector, investigating government agencies in addition to private and state 

owned companies. 

Nigeria’s EITI Program 

Nigeria set its own, very ambitious course for EITI. The initial leadership came 

from President Obasanjo, who was a founding member of Transparency International before he was elected President, and Obiageli Ezekwisili, the Chairperson 

of NEITI, and now Minister for Solid Minerals and a former Finance Director of 

Transparency International. The EITI effort was part of a broader anticorruption 

campaign which included an intensive value for money review of government contracting and civil service reform, as well as the Economic and Financial Crimes 

Commission program. The President appointed a National Stakeholders Working 

Group (NSWG) comprised of 28 individuals with representatives from civil society, 

the media, government, indigenous and multinational companies, the organized private sector, the National Assembly, and the State’s (Regional) House of Assembly. 

The NSWG is the platform through which the NEITI is implemented. 

NEITI set goals far beyond the basic EITI principles of revenue disclosure. Nigerians had little confidence in the integrity of any of the actors in the oil and gas 

value chain. It was essential to the NSWG to examine and audit the quantity of 

oil and gas lifted from well head to fiscalization, to track the money paid for the 

oil and gas from first sales to recordation in the Central Bank, to verify that all 

taxes and royalties and payments of any kind had been paid in full and deposited 

in the Central Bank, and to examine every major process from licensing to refining. 

The audits looked deep into the conduct and practices of the Central Bank of Nigeria (CBN), the Department of Petroleum Resources (DPR), the Nigerian National 

Petroleum Corporation (NNPC), the Federal Inland Revenue Service (FIRS) and 

many other government agencies. NEITI aims to institutionalize EITI principles 

and objectives by codifying them into law. NEITI seeks to build institutional capacity in the extractive industries, by modernizing its processes for acreage allocation, 

licensing, local content and information technology management. NEITI also strives 

to communicate the complex and comprehensive information it produces to all Nigerians, from diverse linguistic and socio-economic backgrounds, so that they are empowered to hold their governments accountable. 

NEITI committed to conduct these audits under international accounting standards with a reputable external auditor. An international tender was conducted and 

the Hart Group of the UK was selected by the NSWG to conduct three highly comVerDate Mar 21 2002 12:05 Jul 17, 2006 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6621 F:\WORK\AGI\051806\27648.000 HINTREL1 PsN: SHIRL
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prehensive and intrusive audits: a financial audit, a physical audit and a process 

audit. The NSWG elected to audit the years 1999–2004, the duration of the 

Obasanjo administration at that time. 

These audits set an unequalled precedent for other resource rich countries. Nigeria was the first to insist that all such revenues be published in a disaggregated 

fashion—company by company, category by category and well by well. All of the results, including interim reports, were posted on the web at www.NEITI,org. Nigeria 

was the first government to look intrusively at its own entities, not just at the conduct of private companies. It was the first, and still the only country, to look at 

physical systems and business processes as well as financial flows. 

NEITI’s ability to achieve this success and future successes is in large part due 

to the constant support of President Obasanjo. Implementation was not always easy 

and compliance lagged. In the end there was tremendous cooperation on the part 

of all parties. Enormous amounts of information have been generated, audited and 

now published on the web. But at multiple points the President issued orders to cooperate or sat down with the entities covered by the audit—public and private—to 

forge cooperation. 

Results of the Audit 

The financial audits summarize, analyze, and confirm the financial flows between 

the federal government and the oil and gas industry from 1999 to 2004. Net inflows 

from the sector to the Federation Account at the Central Bank, taking Nigerian payments to joint-ventures into account, amounted to US$6 billion in 1999, US$14 billion in 2000, $15 billion in 2001, $8 billion in 2002, $12 billion in 2003, and $24 

billion in 2004. The cash flows include sales of crude oil, petroleum profits taxes 

(PPT), royalties, gas flare penalties, general non-oil specific flows (VAT, withholding 

tax), and payments to the Niger Delta Development Corporation (NDDC). All transactions involve the Nigerian Central Bank (CBN) and two regulatory agencies, the 

Federal Internal Revenue Service (FIRS) and the Department for Petroleum Services (DPS), and the audit compared the records of the oil and gas companies with 

records from all three government bodies. 

The discrepancies between the CBN’s and the companies’ reported payments were 

less than 2% of financial flows, but still significant, reaching a net $230 million in 

2002. The Financial Audit reveals that accounting, timing, and classification differences account for some, but not all of these discrepancies. One significant difference is that the government uses the cash basis of accounting while company accounting is done on an accrual basis. The audit encountered several difficulties 

stemming from the inadequacy of systems at government level, including the absence of independent records by the Accountant General of the Federation (AGF), 

the failure of the CBN to maintain complete records, the failure of the FIRS to effectively audit the accounts of state owned or private companies, and the failure for 

the DPR to regulate the calculation and payment of royalties by companies operating in the sector. 

To remedy these shortcomings, the Hart Group recommends reforms that place 

the AGF in a position of management and control over the Federation account. To 

accomplish this, the information system of recording and reporting revenues and 

production levels requires overhaul so that the AGF can directly monitor money received by the CBN. 

The NEITI Physical Audit is based on hydrocarbon net volume balances provided 

by companies. The data is questionable, however, as it is based on how much oil 

reached export terminals, rather than how much was originally pumped from oilfields. A mass hydrocarbon volume balance could not be calculated because the DPR 

does not require that mass volumes be recorded and reported, and operating companies do not record, and in some cases have failed to report, these volumes. This is 

problematic because it is not possible to calculate the amount of crude oil stolen 

along the supply chain. Oil industry estimates of the amount of oil Nigeria loses to 

crude theft vary widely, but ‘‘bunkering’’ is undoubtedly a significant problem. 

The audit recommends that in the short term reconciliation of export liftings between DPR and companies should take place regularly to identify inconsistencies on 

a timely basis. In the long term the NSWG, federal government, and companies 

need to open a dialogue to improve and expand metering infrastructure, ultimately 

providing more accurate data along the flow stream. The audit also recommends 

that DPR create a standard for measuring royalties, which have been calculated at 

various points along the flow stream, to ensure consistent calculations of amounts 

owed to the Federation. Standardizing definitions of the hydrocarbon mass balance 

across the industry will ensure that all companies pay royalties and PPT at the 

same point in the flow stream. 

45

The NEITI Process Audit examined multiple aspects of the process by which oil 

and gas industry operates, including refining and importation, capital and operating 

expenditure, marketing crude, licensing, and marketing natural gas. The report on 

refineries cited significant discrepancies between the crude oil lifted from terminals 

and the crude received at refineries, in the amount of 200,000 tonnes. Nigerian refineries were also found to be inefficient (41% capacity) compared to the rest of the 

world (85% average capacity) due to poor management processes. 

With regard to licensing, the Hart Group recommends that Nigeria tighten its 

pre-qualification criteria for companies licensed to import oil products to avoid the 

potential for licensing to unsuitable companies. They also cite the need for greater 

transparency in the bidding process through improvements in the quality and quantity of publicly available data. The Process Audit on the marketing of natural gas 

cited major impediments to the development of the sector, including the absence of 

a regulator for the sector, the non-payment of gas bills by parastatals, and subsidized pricing. The audit also indicated that there was no clear marketing strategy 

for gas, and that the approach thus far was largely politicized. 

In sum, the NEITI Financial, Physical, and Process audits succeeded in identifying numerous problem areas where sector management is not transparent and 

where reform is required to deter corruption and mismanagement. The audits represent a significant step towards greater transparency in Nigeria’s oil and gas sector. 

Next Steps 

The key test for Nigeria will be what comes next. The relevant stakeholders must 

now ensure that the information garnered by the audits is effectively used to improve the sector. The three audits have been posted on the NEITI website, 

www.neiti.org but the key findings must be simplified and communicated effectively 

across the country. On May 3, 2006, President Obasanjo endorsed the recommendations of the auditors presented to him by NEITI and authorized NEITI to develop 

a work plan to implement them. He expressed his commitment to comprehensively 

respond to the Audits’ findings through initiatives that will repair the relevant systems to avoid future failures and opportunities for corruption and to prosecute any 

clearly identified case of wrongdoing. NEITI is devising a work plan to implement 

these recommendations. 

The most immediate steps will be to clarify remaining discrepancies, institutionalize NEITI by codifying it into law, communicating the results of the audit, 

adopting a reform agenda, modernizing relevant government agencies, and conducting the 2005 audit. Some detailed explanation of these next steps will illuminate the magnitude of the task Nigeria faces. 

Resolving Discrepancies. Further work is needed to reconcile financial discrepancies between the CBN and the companies as well as nonconformities between the 

DPR and company assessments of oil production and export value. Discrepancies in 

volumetric data for hydrocarbon streams also need to be re-examined. The President 

has directed the Hart Group to update progress on these issues by mid-June. 

Improving Regulatory Capacity. The auditors essentially recommend that the 

DPR assert more authority in the collection and regular monitoring of royalties, and 

that the DPR spearhead arrangements for monitoring the entire hydrocarbons balance. The DPR is also tasked with establishing guidelines for the preparation of 

mass balance statements, which oil companies should be required to complete annually. The auditors further recommend that the FIRS improve record keeping and the 

assessment of PPT. Finally, external auditors should be required to report annually 

on the hydrocarbon mass balance. 

Institutionalizing NEITI. The NEITI bill has been passed by the National Assembly and is expected to be passed by the Senate. The bill is designed to develop a 

permanent framework for transparency in the reporting and disclosure of revenues 

accrued by companies or paid to the government, to require the companies to maintain accurate records of costs and sales of petroleum; and to ensure annual audits 

of the sector. Once it is passed, NEITI will require a fresh appropriation for its 

audit work, as well as funding for communications work and additional analytical 

work. 

Communicating Results. The results of the audit need to be communicated to the 

Nigerian public. Disclosure and publication will enable Nigerians to hold their government accountable for the management of revenues; ensure a level playing field 

amongst producing companies; bring about improved corporate governance and improve energy security. The goal of the initiative was to help eliminate the opaqueness of energy sector transactions to ease the social divisiveness and instability 

which has led to disruption of production in the Niger Delta. This will require a sophisticated effort, requiring translation into five languages, using television, newsVerDate Mar 21 2002 12:05 Jul 17, 2006 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6621 F:\WORK\AGI\051806\27648.000 HINTREL1 PsN: SHIRL
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paper, radio and billboards and requiring road shows to travel into remote parts of 

the country to explain the audit work and the reform agenda. If done correctly it 

will be a mammoth undertaking. 

Adopting a Reform Agenda. Engagement of the Nigerian public is intended to 

compel the government to adopt a reform agenda. The roles and strengths of relevant agencies need to be re-evaluated. The DPR needs to play a greater role in assessing royalties, the AFG needs greater management and control capacity, the 

FIRS’ capacity to deal with PPT should be strengthened. These are each major, 

multiyear capacity building efforts. Some help in these areas could be outsourced, 

but it would require major funding to do so. The government will need to balance 

what is most critical with what can be done promptly and what it can afford. 

Modernizing IT Systems. A necessary component of strengthening government capacity is modernization of the way it does its business. Nigeria needs a major business process reengineering effort. To ensure proper computation, assessment, and 

calculation of royalties, DPR should implement a robust accounting system and IT 

infrastructure comparable to those used by the producing companies. To ensure that 

companies pay tax liabilities on time, FIRS needs to adopt best practices for their 

record keeping and accounting system. To facilitate the accessibility of detailed information on lifting and payments, the Crude Oil Marketing Department (COMD) 

needs to adopt a double entry bookkeeping system and maintain a record of accounts receivable. Standardizing definitions and clarifying critical practices that require common understandings between entities will also serve to regularize the sector. Each one of these systems reforms can be a major financial undertaking; creating a system that multiple government agencies can use is both indispensable to 

better governance and formidably expensive. 

How the U.S. Can Help 

The United States has been an observer, but not a supporter of EITI in general 

or the NEITI effort in particular. The US did endorse EITI at the Evian and Sea 

Isle G–8 Summits, and it attends the EITI International Advisory Group meetings. 

But EITI is rarely raised at the Head of State or Secretary of State level. The US 

does not contribute to the World Bank Trust Fund for implementation of this initiative or provide bilateral support for it. The US rightly believes that expenditure 

transparency is as important as revenue transparency. This is indisputably true. 

But EITI is a first step and a fundamental one. 

To date, most of the support for NEITI has come from the UK’s DFID and some 

from the World Bank. The DFID has committed $4.2 million to the World Bank 

EITI Trust Fund so far, of which $2.6 million has been earmarked for NEITI. The 

sum of $2,814,000 has been disbursed to date, largely in form of a Development 

Grant. 

Achieving Nigeria’s ambitious goals will require overcoming enormous obstacles. 

The technical needs are huge: regulators need to be trained, IT systems need to be 

designed and implemented, funds need to be raised for deploying the communication 

strategy, and agencies need to be provided with basic support. 

There is a great opportunity for the US to contribute to NEITI in the months and 

years ahead. The US should acknowledge the accomplishments of NEITI at the 

highest level to publicly demonstrate US support for Nigeria’s effort and to reinforce 

their positive improvements. 

Financial support should be made through the World Bank Trust Fund and bilateral assistance programs. Congress appropriated $1 million last year to support 

EITI in resource-rich developing countries through US bilateral programs and directly to civil society. This amount should be increased significantly and should be 

focused on implementation issues where the US has strong expertise, such as public 

diplomacy, oil and gas regulation, and information technology systems. 

Nigeria has taken an enormous step forward in creating transparency and empowering the public to fight corruption. Courageous work such as this should be encouraged and supported. As a nation we are quick to criticize corruption and condemn governments that tolerate it. We must be as quick to lend a helping hand to 

those who have taken up the fight, but need the weapons to prevail.

Mr. SMITH OF NEW JERSEY. Thank you very much. Dr. Ayittey. 

STATEMENT OF GEORGE B.N. AYITTEY, PH.D., DISTINGUISHED 

ECONOMIST IN RESIDENCE, AMERICAN UNIVERSITY 

Mr. AYITTEY. Mr. Chairman, I would like to thank you for inviting me here to testify before about this Committee. I would like to 

47

make brief remarks, and my lengthy statement has been submitted 

for the record.

First of all, I would like to tell this—inform this Committee that 

I very, very happily compliment Mr. Ribadu. He is one courageous 

individual who is making a great deal of personal sacrifice in order 

to fight the scourge in Nigeria, and we need to do all that we can 

to protect him. We must never, never allow him to become another 

John Githongo of Kenya; and we should support him in his fight 

to make a new—to make put in place a new Nigeria. Because all 

of us want to see a new Africa, and we want to see a new Africa 

because the leadership in Africa has bitterly failed its people. 

We are talking about a continent which is tremendously rich in 

mineral resources, and yet the continent is wallowing and its people are wallowing in abject poverty. 

Now, corruption is not only unique to Africa alone. We all know 

that corruption appears in many countries in the world. But in Africa it has become an epidemic and a scourge. 

You know, according to former British Foreign Secretary Lynda 

Chalker, 40 percent of the wealth that is produced in Africa is invested outside the continent; and Obasanjo himself indicated that 

African leaders have stolen more than $140 billion from their people since independence. This is not small change, but Nigerian rulers have stolen far more from their own people, $412 billion. 

Now if you had that money—that money is six times the Marshall aid that was sent to Germany—there is no reason why such 

an amount of money—the loot, for example, is not being utilized either to build infrastructure, provide schools, clean water for these 

people. Nigeria with all its mineral wealth ought to have been the 

giant of Africa, but it is not because of the Kamikaze plunder by 

its military bandits. 

Right now, as Nigerians enter the new century, for example, its income per capita is about $260. That $260 is about the same level 

of income per capita that Nigerians had back in 1961 when it 

gained its independence. 

Now, the loot that has been taken out of the country is massive, 

and the worst aspect of this is that it is brazen. State governors 

are stealing and claiming that they have constitutional immunity, 

they are secure from prosecution. In fact, when President Obasanjo 

was in Davos, Switzerland, to make the case for more aid or debt 

forgiveness for Africa, four of his own governors in London were 

being probed for money laundering. 

Now, the facts support this. We know corruption corrodes the 

fabric of society. We also know that corruption leads to institutional decay. We also know that corruption also aggravates a budget deficit crisis. It drives away foreign investors. But a far more insidious and devastating effect that corruption and massive looting 

in Nigeria has brought on its people is that it has deprecated the 

dignity of their people. Now the name of Nigeria itself is synonymous with scams and fraud. Now the people have become alienated 

from their government. Now, when governments become corrupt, 

they are totally incapable of leading economic development. 

Now, in many places, especially on the Niger Delta, people are 

in open rebellion against their government. And I am sure you 

have heard testimony about what is going in the Niger Delta. 

48

There has been attacks on oil pipelines, and foreign oil workers are 

being held hostage. I don’t want to repeat that. 

But this escalating attack is also helping drive up oil prices. So 

American consumers here, one of the reasons why oil prices have 

gone up, American consumers are paying for the negligence of governments in Nigeria, for example. 

Now, it is very worrisome. Worrisome because, number one, it 

destabilizes global oil supplies, spiking up prices; and, number two, 

it also adds a potential dynamics to the turmoil in the entire west 

African region. We cannot afford to have a country as large as Nigeria blow up, because in West Africa we have seen Liberia, Sierra 

Leone, Ivory Coast, and Togo, for example. We cannot afford to 

have another western African country teetering on the brink of 

total disintegration because the political climate in Nigeria has degenerated since Obasanjo. And Obasanjo has been denied from his 

third term and, fortunately, the Senate of Nigeria shut that thing 

down. 

Now there are ways by which we can fight corruption. And to 

fight corruption effectively—I mean. In the past, African governments and Nigerian governments have made efforts to fight corruption. One of those efforts was made by Sani Abacha of Nigeria. He 

set up his own anti-corruption commission, and Nigerians scoffed 

at that and laughed at that and dismissed that as a crude oil joke. 

You may remember that Pius Okigbo in 1995, he discovered that 

Nigerian’s rulers have squandered more than $12.4 billion in oil 

revenue. When he handed in that report to Sani Abacha in September, 1994, he had a one-way ticket to London in his pocket and 

fled his country. That tells you how difficult it is to combat corruption in Nigeria and also elsewhere in Africa. 

But, Mr. Chairman, to fight corruption effectively, you need simply, basically, three institutions; and I want to lay them out and 

also indicate how the U.S. can help. 

The first institution that you need is you need to have a free and 

independent media. It is the function of the media to expose the 

corrupt. 

The second institution that you need is an aggressive attorney 

general or anti-corruption czar like Mr. Ribadu. Now, every effort 

must be made to protect such attorney generals or czars and give 

them the powers that they need to prosecute the corrupt. 

The third institution you need is you need an independent judiciary to enforce the rule of law. 

Now if you look at these three institutions, they have been woefully lacking in Nigeria. The independent and free media, for example, haven’t really existed in spite of the fact that country has 

moved toward democracy. 

I have included in the appendix of my longer testimony a compendium of attacks on the press and the media, journalists who 

tried to expose corruption. 

And I must also say that the judges themselves really have not 

upheld the rule of law in Nigeria. 

But we need to strengthen these particular two institutions so 

that the Nigerian people, the Nigerian society itself can take care 

of the problem of corruption. 

49

In addition, I would recommend that we have an independent 

central bank in Nigeria. Because one of the things which facilitate 

capital flight during Abacha’s regime—for example, Abacha’s goons 

used to organize pre-dawn raids on the vaults of the central bank 

of Nigeria. 

Quite often, the governors of the central banks are too close to 

the government in order to resist any incursions or encroachments 

for liquidity. One of the things we can do, especially in the west 

African region, is to rotate the governors of central banks to make 

them at least more independent from the central Government. 

Now we must also take lessons from the fight against corruption 

in other African countries. Nigeria is not the only country—as a 

matter of fact, as Mr. Ribadu indicated, Nigeria is not the only 

country which is fighting against corruption. We should take lessons from other African countries, for example, Kenya; for example, 

Malawi and south Africa. We should not be fighting corruption as 

the Kenyan Government tried to do. They set up these corruption 

commissions with no teeth in them, and then when they pried too 

close—they sort of shut down the commissions completely. We 

should never allow that to happen in Nigeria. 

There is one rare example, success story in Africa, and that 

comes from South Africa. Thabo Mbeki set up an anti-corruption 

squad called The Scorpions. And The Scorpions were not only able 

to sting Jacob Zuma of South Africa—the person was even closer 

to Thabo Mbeki—but also Winnie Mandela. The Scorpions have 

had more than 80 percent success rate in cracking down on senior 

government officials. That is a rare African example that can be 

emulated. 

Now what can the United States do? There are several things the 

United States can do to supplement and to strengthen the efforts 

that Nigerians are making. 

The first thing the United States can do is to help tighten regulations against money laundering, especially in developing countries 

in Asia. Because the regulations are being tightened in Western 

Europe, they are trying to shift the loot to Asian countries, in 

Asian banks, for example. 

The second thing which the United States could do is to help persuade Nigerian Government to set up an escrow account into which 

a certain percentage of oil revenue could be placed and managed 

by an independent body for the benefit of the people on the ground 

from which that resource is taken. This is exactly the same deal 

which the World Bank struck with the Chadian and Cameroonian 

oil pipeline, to put a certain amount of money into an escrow account, to help the people there, rather than to have the money disappear in the pockets of corrupt government officials. 

Now—and also we should also—it will be wrong for me—or misleading for me to suggest that corruption alone is the only problem 

Nigeria faces. Right now, Nigeria is in the grips of a constitutional 

crisis, torn by sectarianism, north-south divide over claims of the 

presidency, religious and ethnic rivalries. 

So you see you need to have a bigger, a broader framework to 

resolve all these problems; and we have that in Africa. It is called 

a sovereign national conference. That is the mechanism South Africans used to dismantle apartheid. That was the mechanism that 

50

1The author, a native of Ghana, is a Distinguished Economist the American University and 

President of the Free Africa Foundation, both in Washington, DC. He is the author of African 

Unchained: The Blueprint for Africa’s Future (Palgrave-MacMillan, 2005). He can be reached at 

(202) 885–3779. 

the small country Benin used to make their transition into a democratic Benin. 

It is exactly the same mechanism that we should goad, not the 

President of Nigeria but the Senate of Nigeria to convene a sovereign national conference to draw up a better dispensation or 

democratic dispensation for the people of Nigeria. The people of Nigeria have suffered too long for us to neglect them. 

Thank you so much. 

Mr. SMITH OF NEW JERSEY. Thank you so much for your testimony and your recommendations. 

[The prepared statement of Mr. Ayittey follows:]

PREPARED STATEMENT OF GEORGE B.N. AYITTEY, PH.D.1, DISTINGUISHED ECONOMIST

IN RESIDENCE, AMERICAN UNIVERSITY

Corrupt African leaders have stolen at least $140 billion (£95 billion) from their 

people in the decades since independence.

—Nigeria’s President, Olusegun Obasanjo, at an African civic groups meeting in Addis Ababa, Ethiopia, in June 2002 (The London Independent, June 

14, 2002. Web posted at www.independent.co.uk).

I would like to thank Chairman Henry Hyde and members of this Committee for 

giving me the opportunity to present this testimony on corruption in Nigeria. Many 

African governments do not invite individuals with alternative viewpoints to testify. 

Freedom of the press and of speech is not tolerated in most African countries. In 

fact those who do not toe the government’s line are simply liquidated. This intellectual barbarism on the part of ‘‘educated’’ African leaders is one of the root causes 

of the crises in Africa. If killing or detaining people solves problems, Africa ought 

to be the most highly developed continent. But the tyrants do not realize this. 

Section A: Introduction 

Corruption is certainly not a social vice unique to Africa alone. It prevails in one 

form or another in practically all countries, Western and communist alike. However, 

it has become endemic in Africa. Over the post-colonial period, the African state has 

evolved into a predatory monster or a gangster state that uses a convoluted system 

of regulations and controls to pillage and rob the productive class—the peasantry. 

It is common knowledge that heads of state, ministers, and highly placed African 

government officials raid the African treasury, misuse their positions in government 

to extort commissions on foreign loan contracts, skim foreign aid, inflate contracts 

to cronies for kickbacks and deposit the loot in overseas banks. The very people who 

are supposed to defend and protect the peasants’ interests are themselves engaged 

in institutionalized looting. 

Dishonesty, thievery, and peculation pervade the public sector in Africa. Public 

servants embezzle state funds; high-ranking ministers are on the take. The chief 

bandit is often the head of state himself. As Nigerian journalist, Tony Nze Njoku, 

noted: ‘‘Leadership in Africa, with few exceptions, is seen as an opportunity to get 

rich rather than serve the people’’ (Finance & Development, June 1998, 56). The extent and magnitude of this scourge is difficult to estimate, owing to its illegality and 

the painstaking efforts the culprits make to conceal it. However, in August 2004, 

an African Union report claimed that Africa loses an estimated $148 billion annually to corrupt practices, a figure which represents 25 percent of the continent’s 

Gross Domestic Product (GDP). ‘‘Mr. Babatunde Olugboji, Chairman, Independent 

Advocacy Project, made this revelation in Lagos while addressing the press on the 

survey scheduled to be embarked upon by the body to determine the level of corruption in the country even though Transparency International has rated Nigeria as 

the second most corrupt nation in the world’’ (Vanguard, Lagos, Aug 6, 2004. Web 

posted at www.allafrica.com). 

At the Commonwealth Summit in Abuja, Nigeria on December 3, 2003, former 

British secretary of state for international development, Rt. Hon Lynda Chalker, revealed that 40 per cent of wealth created in Africa is invested outside the continent. 

Chalker said African economies would have fared better if the wealth created on the 

51

continent were retained within. ‘‘If you can get your kith and kin to bring the funds 

back and have it invested in infrastructure, the economies of African countries 

would be much better than what there are today, she said (This Day [Lagos], Dec 

4, 2003). And the loot is not small change. Speaking to representatives of African 

civic groups meeting in the Ethiopian capital, Addis Ababa, to prepare the African 

Union to be launched in South Africa, Nigeria’s President, Olusegun Obasanjo, said 

that ‘‘corrupt African leaders have stolen at least $140 billion (£95 billion) from their 

people in the decades since independence’’ (The London Independent, June 14, 2002; web posted). But that is small change compared to the $412 billion Nigerian rulers 

have stolen. 

Section B: Nigeria: Looting With Impunity 

Nigeria is a truculent African tragedy. With immense mineral wealth, it was 

poised to become Africa’s answer to South Korea. But kamikaze plunder by military 

bandits reduced the ‘‘giant of Africa’’ to a comatose midget. The discovery and exploration of oil fields in the early 1970s led to a booming economy. Oil quickly became 

the dominant sector of the economy, accounting for more than 90 percent of exports 

and providing the federal government with 80 percent of its revenue. As money 

flowed into Nigerian government coffers, military dictators went on a spending 

spree. They frittered away the oil bonanza on extravagant investment projects, a 

new capital at Abuja with a price tag of $25 billion, and highly ambitious Third Development Plans, upon the false projections of oil output and revenue. Agriculture 

was neglected and food imports rose rapidly. 

In 1981, oil prices fell precipitously. Export receipts plummeted from $22 billion 

in 1980 to $10 billion in 1983 and then to $6 billion in 1986. To maintain income 

and the consumption binge, Nigeria borrowed heavily. Its foreign debts quadrupled 

from $9 billion in 1980 to $36 billion in 1990. Federal and state budgets sank into 

deficits. These were financed with the accumulation of more debt and the depletion 

of international reserves. External imbalance caused difficulties with debt servicing 

and forced the country to go into arrears. 

To help improve balance, the Economic Stabilization Act of 1982 was passed. 

Stringent trade controls, the rationing of foreign exchange, a restriction on import 

licenses, an increase in duties, and the initiation of an import deposit program were 

adopted. These measures however failed miserably and an economic crisis emerged 

in 1983. Growth rates turned sharply negative. The GDP growth rate in 1983 was 

–6.7 percent; non-oil sector growth fell to –9.3 percent and petroleum sector growth 

to –2.5 percent. By 1985, the distortions in the economy had reached alarming proportions. The exchange rate was grossly overvalued and the budget deficit out of 

control. The government resorted to heavy domestic borrowing from the banking 

system to finance its profligacy. 

The supreme irony of Nigeria’s economic development is that, despite the flow of 

substantial oil wealth, the country entered the new millennium with real income per 

capita of about $260 today, which is nearly the same as it was at independence in 

1960 and saddled with a foreign debt of $30 billion. About 60 percent of Nigeria’s 

population live on less than a $1 a day. The drop was more dramatic in the 1980s. 

In 1980, income per capita stood at $1029—the fifth highest in Sub-Saharan Africa. 

By 1990, it had dropped to a woeful $266. This sharp decline in economic performance was not due to external economic adversities but to grotesque mismanagement 

and brazen, unprincipled looting. 

Corruption has become so pervasive that navigating the most basic government 

services, such as getting freight through customs, often requires a bribe in Nigeria. 

Pay police officers—many armed with automatic rifles—set up impromptu roadblocks to shake down motorists. Politicians take bribes and give them, including 

payments to reporters who can make more money from those they cover than from 

their meager newspaper paychecks. 

Most Nigerians trace the root of corruption to the decades of military governments 

that ruled Nigeria before Obasanjo’s election in 1999. The treasury, flush with 

money from some of the world’s most productive oil fields, became a personal bank 

account for a succession of generals. The rot oozed down to lawmakers, governors 

and judges. Civil servants, who in some cases went months or years without receiving their salaries, collected what they could by selling their services. 

Between 1970 and the early 2004, more than $450 billion in oil money flowed into 

Nigerian government coffers, which simply vanished into private pockets. Nigerians 

are now asking what happened to the ‘‘oil money.’’ The situation deteriorated so rapidly that Nigeria often ranks as the most corrupt nation and the scam capital of 

the world. According to Chief Eke Urum-Eke, an ex-major of the Biafran war and 

exiled in New York, ‘‘The only two flourishing business in Nigeria today are the 

business of government and the business of smuggling. Smuggling is not for selfVerDate Mar 21 2002 12:05 Jul 17, 2006 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6621 F:\WORK\AGI\051806\27648.000 HINTREL1 PsN: SHIRL
52

2This information was posted on the internet on 23 Jun 1998 by the organization: 

ndmorg@cldc.howard.edu. 

respecting individuals, however lucrative it may be. Therefore the only avenue open 

for our leaders to maintaining their known lifestyle is the business of government—

pen-based robbery and signature abuse by those inside, and fraudulent contracts for 

those outside, government. And for them to get any of these fraudulent contracts, 

state or federal, they must sing Abacha’s tune’’ (Nigerian Times International, 16–

31 January 1996, 8). 

The September 1996 issues of Nigeria’s news magazines, Tell and This Week, 

screamed about ‘‘How [Military] Administrators Plundered the States.’’ Ike Nwosu, 

the ex-administrator of Abia State, ‘‘spent some 16.875 million naira ($214,000) on 

himself between March 1995 and March 1996’’ (African News Weekly, 28 October—

3 November 1996, 17. Then a 27 September 1994 audit (The Okigbo Report) revealed that a total of $12.4 billion—more than a third of Nigeria’s foreign debt—

was squandered by its military rulers between 1988 and 1994. Pius Okigbo fled the 

country after handing in the report. 

Indeed, within two weeks the death of General Sani Abacha, local newspapers reported that, his wife, Maryam was seeking ‘‘seeking political asylum in a Middle 

East country thought to be Lebanon,’’ according to the Nigerian Democratic Movement.2 She was reputed to have inherited ‘‘the vast fortunes of her husband estimated at $5 billion including an oil refinery in Brazil and had contracted a private 

security outfit to guard the family, whilst she assesses the situation.’’

Following Abacha’s timely and mysterious death in June 1998, elections were held 

by his successor, General Abdulsalam Abubakar. Upon assuming power on May 29, 

1999, President Obasanjo found the country ungovernable. A near government paralysis resulted from wrangling over distribution of power between the executive 

and the legislative. For 18 months (Feb 1999 to August 2000), Nigeria’s 109 senators and 360 representatives passed just five pieces of legislation, including a budget that was held up for five months. Immediately upon taking office, the legislators 

voted for themselves hefty allowances, including a 5 billion naira ($50 million) furniture allowances for their official residences and offices. The impeached ex-chairman of the Senate from President Obasanjo’s own People’s Democrtic Party (PDP), 

Chuba Okadigbo, was the most predatory:

‘‘As Senate President, he controlled 24 official vehicles but ordered 8 more at 

a cost of $290,000. He was also found to have spent $225,000 on garden furniture for his government house, $340,000 on furniture for the house itself 

($120,000 over the authorized budget); bought without authority a massive electricity generator whose price he had inflated to $135,000; and accepted a secret 

payment of $208,000 from public funds, whose purpose included the purchase 

of ‘Christmas gifts’’’ (New African,, Sept 2000; p.9). 

Section C: Looters Go Scot-Free 

More than $1.3 billion of Abacha’s loot was believed to have been siphoned 

through London banks; one popular British bank alone was reported to have handled more than $170 million of funds suspected to have been looted from the Nigerian treasury by Abacha’s military regime. The Abacha family and associates area 

argued that they had an immunity deal from General Abdulsalam Abubakr’s transitional regime that briefly ruled Nigeria after Abacha’s sudden death on June 8, 

1998 before Obasanjo came to power on May 29, 1999. The family and associates 

said General Abubakr’s government had agreed that if they returned ‘‘some money’’ 

(and they duly returned $750 million), they would be given immunity from criminal 

prosecutions. In May 1999, General Abubakr’s regime acknowledged that some 

money had been returned. Since then, more Abacha-associated accounts have been 

discovered in 19 Western banks, but the Abacha family still insist that the deal with 

General Abubakr’s government must stand. They have subsequently gone to court 

in Britain to stop the British government from handing over the results of its investigation into the morney to the Nigerian and Swiss authorities’’ (New African, Nov 

2001; p.10). 

Upon assuming office, President Obasanjo vowed to recover the loot of former 

head of state, General Abacha. He established the Corruption Practices and Other 

Related Offences Commission. Much public fanfare was made of the sum of about 

$709 million and another £144 million recovered from the Abachas and his henchmen. But, alas, this recovered loot itself was quickly re-looted. The Senate Public 

Accounts Committee found only $6.8 million and £2.8 million of the recovered booty 

in the Central Bank of Nigeria (CBN) (The Post Express (July 10, 2000). Uti Akpan, 

a textiles trader in Lagos was not impressed: ‘‘What baffles me is that even the 

53

money recovered from Abacha has been stolen. If you recover money from a thief 

and you go back and steal the money, it means you are worse than the thief’’ (The 

New York Times, Aug 30, 2000; p.A10). 

In May 2000, Jack Blum, a partner of Lobel Norins and Lamont, experts in transparency and corruption, testifying before the US House of Representatives Sub-committee on Domestic and International Monetary Policy, Jack Blum, revealed that 

‘‘From independence to the present time, past leaders in Nigeria have either stolen 

or misappropriated state funds estimated at N400 billion ($40 billion . . . The 

amount also involved funds received on behalf of the country by key government officials as international assistance, loans from international financial institutions, 

kick backs to government officials involved in purchasing and special arrangements 

for currency conversion. The amount includes misappropriated oil revenue emanating from international oil deals between Nigeria and her customers abroad. ‘The 

amounts which were taken were so large that they have become embarrassing and 

destabilizing. Theft has disrupted the economies of major countries such as Nigeria, 

Mexico and Indonesia,’’ Blum added (Post Express, June 1, 2000; web posted). 

According to David Blair of London Telegraph (June 25, 2005):

‘‘Nigeria’s past rulers stole or misused £220 billion ($412 billion). That is as 

much as all the western aid given to Africa in almost four decades. The looting 

of Africa’s most populous country amounted to a sum equivalent to 300 years 

of British aid for the continent. Former leader Gen Sani Abacha stole between 

£1bn and £3bn. The figures were compiled by Nigeria’s anti-corruption commission. 

Nigeria’s rulers have already pocketed the equivalent of six Marshall Plans. 

After that mass theft, two thirds of the country’s 130 million people—one in 

seven of the total African population—live in abject poverty, a third is illiterate 

and 40 per cent have no safe water supply. With more people and more natural 

resources than any other African country, Nigeria is the key to the continent’s 

success.’’

Mallam Nuhu Ribadu, the chairman of the Economic and Financial Crimes Commission, set up three years ago, said that £220 billion ($412 billion) was ‘‘squandered’’ between independence from Britain in 1960 and the return of civilian rule 

in 1999. ‘‘We cannot be accurate down to the last figure but that is our projection,’’ 

Osita Nwajah, a commission spokesman (Telegraph, June 25, 2005). The stolen fortune tallies almost exactly with the £220 billion of western aid given to Africa between 1960 and 1997. That amounted to six times the American help given to postwar Europe under the Marshall Plan. 

The scourge of corruption was exacerbated by Nigeria’s military regimes’ hopeless 

inability to control their own budgetary expenditures. For ten years (1990–2000), 

there was no audit of public accounts in Nigeria. ‘‘The Speaker of the Lagos State 

House of Assembly, Dr. Olorunnimbe Mamora, revealed that the Lagos government 

account since 1994 has not been audited’’ (P.M. News, 26 July 1999). The Chairman 

of the Senate Committee on Public Accounts, Alhaji Idris Abubakar, disclosed in 

May 2000, that the committee was making inquiries about the $550 million realized 

from the sale of the five per cent federal government equity shares in Shell, which 

from 1993 to 1998 was managed by the Nigerian National Petroleum Company 

NNPC). Nobody knew what happened to the sale proceeds, nor were proper accounting made. Abubakar said that ‘‘the committee discovered that only photocopies of 

the accounts of the NNPC for 1993, 1994 and 1995 were submitted to the office of 

the auditor-general of the federation, while the domestic reports for 1996, 1997 and 

1998 had not been submitted. ‘‘The accounts of its subsidiaries have also not been 

forwarded in spite of requests from the office of the auditor-general,’’ he said (The 

Guardian, May 20, 2000; web posted). 

Even some Nigerian diplomats were on the take. By January 2003, the Permanent Mission of Nigeria to the United Nations, located at Nigerian House on 802 

Second Avenue and 44th Street in New York, had become a nightmare of unpaid 

bills and constant harassment from landlords, credit card companies, phone companies as well as other utilities. Nigerian diplomats could not be reached by phone 

because the lines had been cut. Even electricity to the giant building was also disconnected some time ago. According to Nigerian author and publisher, Chika 

Onyeani,

‘‘Diplomats at the Mission have not been paid for the past five months, while 

the ‘‘locally-recruited-staff’’ (the staff not sent from Nigeria but recruited domestically) have not been paid for three months. Most of them have exhausted their 

savings, having to depend on borrowing from friends and relatives, and it is 

only the depressing job market in America which has forced them to continue 

54

to endure the humiliation of constant eviction notices’’ (African Sun Times, January 16–22, 2003; p.1).

Increasingly, Nigeria has fast gained an unenviable reputation for financial mismanagement and scams. In fact, ‘‘on January 13, 2003, the IMF warned West African countries against having one currency if Nigeria was to be included. The Fund 

believes that these countries would lose the value of their respective currencies if 

Nigeria was allowed to become a member because of high corruption in the country 

and the specter of financial scam practitioners in the country’’ (African Sun Times, 

January 16–22, 2003; p.1). The scams have been estimated to have defrauded foreigners of more than $2.2 billion. 

Africa’s case for more aid and debt relief has not been helped by President 

Olusegun Obasanjo of Nigeria, arguably the most mismanaged economy in Africa. 

As he was pleading for more aid at the World Economic Forum in Davos, Switzerland, in February, four of his state governors were being probed by London police 

for money laundering. The most galling was the case of Plateau State Governor, 

Chief Joshua Dariye, accused of diverting N1.1 billion (over $90 million) into his private bank accounts. 

Dragged to the Federal High Court in Kaduna by Economic and Financial Crimes 

Commission (EFCC), Justice Abdullahi Liman ruled on December 16 that although 

Dariye was a principal actor in the case, Section 308 of the Nigerian Constitution 

protected sitting governors from criminal prosecution. Imagine. And would the police apprehend him if he had no such ‘‘constitutional immunity’’? In February, Nigeria’s police chief himself, Inspector General Tafa Balogun, was forced into early retirement after investigators probing money-laundering allegations found $52 million 

hidden in a network of 15 bank accounts after being on the job for only two years. 

He was eventually prosecuted and sentenced to a mere six-month jail term—a slap 

on the wrist. Lawmakers have mocked attempts by the police to investigate MPs 

for corruption. Said President Obasanjo: ‘‘The fact that Tafa Balogun was removed 

or asked to resign and the money found in his account seized; the fact that two ministers—one former and one serving—were charged to court over corruption should 

be applauded. I believe that we are doing well as far as fighting corruption is concerned’’(Daily Independent, Feb 27, 2005). Well not good enough. Even Nigeria’s 

Senate is riddled with scams and inflated contracts, with proceeds pocketed by sitting senators. Now, it is open looting by state governors with impunity and immunity. 

The Governor of oil-rich Nigerian state (Bayelsa State), Chief Diepreye 

Alamieseigha, was arrested at London Heathrow Airport on Sept 15, for money 

laundering in Britain. He appeared in a UK court on Sept 18 and charged with 

laundering £1.8m ($3.2m) found in cash and in bank accounts. Seven London bank 

account have been traced to him. 

Governor Alamieseigha was said to have been collapsed in court just as he was 

alleged to have been engaging in directing in direct transfer from government account to individual accounts. According to Nigeria’s Sunday Tribune, the genesis of 

the governor’s arrest, was traced to when a woman was arrested in London with 

$30 million which she claimed belonged to the Bayelsa State governor. The governor 

earns less than $1,000 a month. Sunday Tribune also gathered that Alamieyeseigha, 

on hearing of the arrest of his top aides, put a call through to a top Presidency chief 

whom he accused of witch-hunting him. 

He was believed to be on his way to Nigeria en route London after undergoing 

medical checkup in Germany before he was apprehended for alleged money laundering. Reports said that the Metropolitan police seized his passport, ostensibly to 

restrict him to Britain because of his court trial. He was granted bail, while the case 

against him was adjourned till November 15. He was originally arrested on 15 September as he passed through Heathrow Airport in London. Detectives found almost 

£1m in cash in his west London home. The governor claims he is innocent and enjoys diplomatic immunity. 

Nigeria’s Economic and Financial Crimes Commission (EFCC), has overwhelming 

evidence on most of the alleged corrupt government officials—especially state governors—even as the Commission’s chairman, Mallam Nuhu Ribadu, said the recent 

case involving the governor of Bayelsa State, Diepriye Alamieyeseigha, was just a 

tip of the iceberg. In fact, an allegation of corruption has been leveled against President Olusegun Obasanjo himself by the governor of Abia State, Orji Uzor Kalu. 

Many Nigerians scoff at Obasanjo’s anti-corruption campaign as an elaborate form 

of public relations to win concessions from lenders and burnish the president’s reputation as a world leader. Critics note that only now, six years after Obasanjo first 

won office promising to crack down on corruption, are any major figures being 

brought to justice, and few have gone to jail. One such figure, General Ibrahim 

55

Babangida, an ex-military dictator, thumbs his nose at his people by even refusing 

to testify before the anti-corruption commission. When caught, punishment amounts 

to a mere sacking. 

When the nation’s education minister, Fabian Osuji, was caught giving $400,000 

to Nigerian lawmakers for favorable votes, he formally protested that such behavior 

was ‘‘common knowledge and practice at all levels of government.’’ Besides, Osuji 

added, he had struck a good deal; the lawmakers had asked for twice as much. He 

was fired from the government. Besides Osuji, a succession of senior government figures—including the top police official, the housing minister and the Senate president—also have been pushed from their jobs in recent months and threatened with 

jail for offenses that once would have earned them little more than a wink. But political opponents contend that the president’s election victories in 1999 and 2003 

were so brazenly rigged that he lacks the moral authority to attack corruption. 

Efforts to stem corruption began making headlines in August 2003 when Nasir 

Ahmad el-Rufa’i, who had just been named to a ministerial post overseeing the capital region, announced that two senators had asked him for bribes to facilitate his 

confirmation (The Washington Post, May 1, 2005; p.A18). El-Rufa’i estimated that 

at least three out of every four lawmakers are corrupt, as are more than half of the 

nation’s governors and many of its civil servants. ‘‘If a few more ministers go to jail, 

if a few more members of the National Assembly go to jail, believe me, people will 

line up and do the right thing’’ el-Rufa’i said (The Washington Post, May 1, 2005; 

p.A18). 

Section D: The Deleterious Effects of Corruption 

Albeit unscientific, the above represents an effort to catalogue the brazen and outlandish plunder of Nigeria’s resources that could have been devoted to development. 

The worst part of all this is that the thieving elites do not invest the booty in their 

own country, to build factories and railroads—as did America’s ‘‘robber barons’’ in 

the nineteenth century. Rather, Nigeria’s kleptocrats spent the booty lavishly on 

mistresses, luxurious automobiles, fabulous mansions—on consumption, not productive ventures. The rest of the loot was spirited out of the country into foreign bank 

accounts to develop the already advanced countries—a double whammy. 

Bribery, embezzlement and theft—sometimes on a grand scale—divert enormous 

resources from public coffers into private hands. Unchecked, it eventually blossoms 

into a ‘‘culture of corruption.’’ Nigeria is a typical case where corruption has mushroomed and spilled over on to the international scene with various ‘‘advance fee’’ 

frauds and scams. This pattern of looting has become so deeply ingrained that it 

is difficult to eradicate. 

Inefficiency 

Corruption has several deleterious effects on economic development. First, it 

breeds inefficiency and waste. Contractors and suppliers fail to deliver because they 

have bribed some official. Who you are and how big a kickback you offer matters 

more than how well or efficiently you perform a job. As a result, contracts are inflated and some kick backs paid to some conniving official. Work done is shoddy: 

Roads are poorly constructed and wash away at the first drop of rain. Telephones 

refuse to work, postal service is non-existent and the entire communication system 

is in shambles, costing the country billions in lost output. 

Infrastructure has crumbled in Nigeria because contractors failed to perform. The 

educational system has sharply deteriorated. Roads are pot-holed. Hospitals lack 

basic supplies because they have been stolen or diverted, and patients are often 

asked to bring their own bandages and blankets. State institutions decay and breakdown. Nobody cares because tenure of office and promotions are based not on competence and merit but on personal loyalty to the president, ethnicity, and sycophancy. Institutions such as the civil service, the judiciary, parliament, and the police disintegrate and fail to function since they have all been perverted. 

The rot is not confined to one area but seeps into all areas of government. Parliament becomes a joke—a rubber-stamp. The police, the military and the civil service—all are hopeless. Even though the state soaks up scarce resources (through 

heavy taxation), it fails to fulfill its role in facilitating economic growth or deliver 

essential services. ‘‘Nigeria has many fine lawyers, but the judiciary is tainted by 

trials settled with bribes. It has fine academics, but universities are tarnished by 

the trade in diplomas. It has respected chiefs, but the nobility has been mocked by 

the sale of chieftaincy titles. In many ways, the institution which has suffered the 

most under this military regime is the military itself. ‘Military men are not soldiers 

anymore’ is a common Nigerian observation (The Economist, 21 August 1993; Survey, 6). Nigerian cities have fire departments, but often there is no equipment. 

When a three-story apartment building and a bakery were destroyed by fire in 

56

Umuahia ‘‘one volunteer, Mr. Timothy Nwachukwu, said that the fire service did 

not help because they had no working vehicles’’ (African News Weekly, 24 February 

1994, 12). 

Institutional break-down and the failure to provide the most basic essential services creates an environment inimical to development. The cost of doing business in 

such an environment increases enormously. Simple, routine applications takes 

weeks to be approved. Security of persons and property can seldom be guaranteed. 

Increasing production becomes chancy, given intermittent disruptions in the supply 

of electricity and water. 

Soaring Government Deficits 

Second, corruption aggravates the budget deficit problem. Expenditure figures are 

padded. Ghost workers proliferate on government payrolls. ‘‘An audit task force appointed by the Nigerian Government said on 1 November 1996 that it had discovered 28,000 ‘ghost workers’ on the state payroll . . . ‘‘The ‘ghost workers’ are either 

fake, retired or dead persons whose names remain on the payroll for fraudulent officials to claim their wages’’ (African News Weekly, 11–17 November 1996, 17). Revenue collectors are notoriously corrupt, pocketing part of tax proceeds, waiving taxes 

if they receive large enough bribes. 

Deters Foreign Investment 

Third, corruption drives away foreign investors: ‘‘Government contracts in Nigeria, say international businessmen, are among the most expensive in the world 

‘mainly because of excessive margins built into such contracts for personal interests.’ 

Those personal interests can be seen attending expensive schools in Britain, or 

parked outside plush government villas: a Maserati or Lamborghini is quite normal 

for an army chief’’ (The Economist, 21 August 1993; Survey, 5). 

Africa has remained a wilderness to foreign investors for a variety of reasons: 

weak currencies (except notably in extractive industries, where output is priced in 

dollars), exchange controls, a feeble local private sector, poor infrastructure, small 

domestic markets, stifling bureaucracy, political instability, uncertain legal system, 

and corruption. Despite fanciful ads, elaborate investment codes, and guarantees of 

profit repatriation, Africa ‘‘attracts less than 5 percent of the direct investment 

going to the developing countries, an estimated $2.5 billion or so in 1994’’ (The 

Economist, 12 August 1995 11). In 1995 when a record $231 billion in foreign investment flowed into the Third World, Africa’s share fell to a miserly 2.4 percent. 

Crumbling infrastructure, chronic instability and corruption have deterred foreign 

investors. Even French investors are shying away from Africa. According to The African Observer (April 4–17, 1995), ‘‘Africa’s share of French overseas investment 

dwindled from $500 million in 1983 to $170 million in 1992, Jean-Pierre Ranchon 

[vice president of the Council of French Investors in Africa] said. Asia’s grew from 

$4 million to $600 million over the same period (22). But why should foreign investors be excoriated when Africa’s kleptocrats do not invest their own wealth in their 

own countries? Asked Herman Cohen, former U.S. Assistant Secretary of State for 

African Affairs in 1991: ‘‘Over the last 10 years, Africans themselves have exported 

$20 billion a year into bank accounts in Europe [and the U.S.] buying real estate. 

So if Africans don’t have confidence in their own continent, why should the rest of 

the world?’’ (Africa Insider, July 1994; p.4). 

Economic Contraction and Collapse 

Fourth, corruption leads to economic contraction and collapse. Corruption and 

capital flight, which flourish under non-democratic systems, seriously stunt economic development. At an April 2000 press conference in London, U.N. SecretaryGeneral Kofi Annan lamented that: ‘‘Billions of dollars of public funds continue to 

be stashed away by some African leaders—even while roads are crumbling, health 

systems have failed, schoolchildren have neither books nor desks nor teachers, and 

phones do not work’’ (The African-American Observer, April 25–May 1, 2000; p.10). 

While corruption and capital flight exist under all political systems, their incidence 

tends to be more pervasive when rulers are not held democratically accountable. 

Africa’s experience shows that a corrupt government is incapable of efficient economic management and eliciting the sacrifices necessary for the development effort. 

A corrupt African government cannot attract foreign investment or spur domestic 

investment. Like the colonial state, the predatory African state is also extractive. 

Under colonialism, Africa’s resources and wealth were plundered for the development of metropolitan European countries. Today the tiny, parasitic ruling elites use 

their governing authority to exploit and extract resources from the productive members of the society. These resources are then spent lavishly by the elites on themselves or siphoned out of Africa. As Robinson (1971) asked plaintively: ‘‘ What incenVerDate Mar 21 2002 12:05 Jul 17, 2006 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6621 F:\WORK\AGI\051806\27648.000 HINTREL1 PsN: SHIRL
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tive does the peasant have to produce more when through taxation the surplus is 

siphoned off to be spent in conspicuous consumption?’’ (43). 

Popular Rebellion and Social Upheaval 

By far, however, the most serious has been the severe damage rampant corruption 

has wrought on the international reputation of Nigeria and the self-image of its people. The name ‘‘Nigeria’’ itself is now synonymous with scam or fraud. 

Over the years, Nigeria’s governments have steadily lost credibility with the people. People became alienated and no longer trusted their government. They saw the 

state, not as a ‘‘partner in development’’ but as enemies to be evaded, cheated and 

defeated. In the Niger Delta, are in open rebellion against the government. 

Nigeria’s oil wealth is produced in the Niger delta, which has been the scene of 

increasingly violent rebellion. Nigeria’s state oil company, working with partners 

that include Shell, Chevron, Mobil, Amoco and Texaco, produces 2.4 million barrels 

of oil—worth $30 million to $40 million—each day. But for years, most of that river 

of cash has flowed to military governments that have broken promises to spend 

fixed percentages of it to bring electricity, clean water, village clinics, and schools 

to the oil belt. The regime of General Sani Abacha, for example, promised to return 

13 percent of Nigeria’s oil proceeds to develop the oil communities but the funds 

were siphoned off by corrupt officials. ‘‘If we would honestly put even 3 percent of 

the oil revenues into these communities, it would make a big difference’’, said Frank 

Efeduma, a Shell oil spokesman in Warri, Nigeria (The Washington Post, Nov 9, 

1998; p. A18). In the 1990s, the Ogonis, Nembe, Ijaws and other ethnic groups escalated protest to violence, often seizing oil facilities and oil company workers. 

The entire delta area with 6 million people, consisting of 20 tribes, has been devastated. As The Washington Post (Nov 9, 1998) put it: ‘‘The curse of natural wealth 

has fallen heavily around the Niger River delta, Africa’s most lucrative oil field. 

Nearly 40 years of oil production, directed mostly by military governments, has left 

the delta peoples poorer, sicker, less nourished and less educated than the rest of 

the country. Oil spills have damaged fishing grounds and farmland’’ (p. A18). For 

instance, in Nembe, home to several thousand people on the edge of Nigeria’s largest oil field, there is no electricity, clean water, or roads or other basic amenities. 

Gas is burned there, causing environmental pollution. Nor does the area have a 

major oil refinery. In a policy that defies economic sense, oil is piped from the delta 

area hundreds of miles to the north, where it is refined to provide employment and 

industrial activity to the Hausa-Fulani, who have monopolized political power since 

Nigeria’s independence in 1960. 

Hardest hit in the Niger delta are the Ogoni, who number 500,000 and sit on top 

of billions of dollars of oil reserves. But ‘‘we get no benefit from it, absolutely none’’, 

complained Chief Edward Kobani, a senior elder of the Ogoni. Their homeland is 

an environmental mess. Gas—a by-product of the oil industry for which there is no 

use—is burned 24 hours a day, producing acid rain and toxic pollution. Air and 

water quality has suffered, and crops damaged. The health toll is enormous: There 

are high levels of skin rashes, allergies, abscesses and infections. Ken Saro-Wiwa 

started the Movement for the Survival of the Ogoni People (MOSOP), demanded $10 

billion for environmental damage and royalties from the federal government and 

Royal Dutch/Shell, and threatened to secede the area from Nigeria. The group wrote 

an Ogoni national anthem, designed a national flag, and printed a national currency. Frightened of another Biafra, the military government attacked Ogoni villages. In May 1995 Saro-Wiwa was arrested; he and eight others were hanged on 

November 10, 1995 despite a chorus of international pleas for clemency. But the 

Ogoni have not given up their fight; nor have others in the Delta region. 

The delta youths demand not just equity from the state but also in the redistribution of income from their oil. A first attempt at secession was led by Isaac Adaka 

Boro, who called for a Niger Delta Republic in 1965. The rebellion was short-lived 

and faded into history, but the anger in the delta was reignited with Saro-Wiwa’s 

MOSOP. The Abacha military regime, as well as western oil companies, felt threatened. Despite Saro-Wiwa’s hanging and the militarization of the entire Ogoniland, 

the groups were not deterred. 

On October 4, 1998, militant Ijaws seized oil facilities throughout their land. At 

the Batan station, they ordered the pumping station’s crew to shut it down and 

leave. ‘‘We are like mad dogs’’, said Augustine Egbane, an Ijaw leader (The Washington Post, Nov 11, 1998; p. A28). The oil field at Batan was producing 26,000 barrels—worth $380,000—a day but little money went back to the village. In the 35 

years that Shell operated the Batan field, oil spills have spoiled the village’s traditional livelihood of fishing. Further, villagers must paddle for three hours to find 

clean water. The village has no clinic and no real school, only an unequipped classroom that villagers built themselves. In 1993, a government development agency 

58

strung electrical lines in the village but never connected them to the outside (The 

Washington Post, 11 November 1998; p. A28). 

On December 11, 1998, 5,000 Ijaws signed a declaration in Kaiama—Adaka Boro’s 

birthplace—and asserted ownership of all resources in their swamps and creeks, and 

served notice to oil companies operating in the area. In addition, they formed the 

Niger Delta Volunteer Force, modelled after Boro’s army, and vowed to go to war. 

Since the Kaiama declaration, the Abdusallam Abubakr military regime, which 

succeeded Abacha’s, promised to raise the revenue to resource-producing states from 

3 percent to 13 percent and give N15.3 million ($184,000) in development funding. 

The promises, however, were not fulfilled. According to The Washington Post (November 9, 1998),

‘‘The deep poverty of the delta—alongside the luxurious homes and lives of 

the military rulers, their political allies and the U.S. and European oil firms 

who are their partners—has left people desperate, frustrated and bitter. Bitter 

enough that, in recent years, youths have formed militias, stolen guns, seized 

oil facilities and made war on their ethnic rivals’’ (p. A18).

Groups in the 9 oil-producing states of Nigeria’s 36-state federation have for years 

demanded that they should receive more money than the rest of the country from 

the oil sales, since Nigeria earns around 90 percent of its 10 billion-dollar foreign 

currency earnings from oil and gas sales. The impoverished oil-producing areas 

charge that they only see a tiny percentage of that money ever spent in their regions. 

On October 7, 1998, angry youths opposed to Nigeria’s government took control 

of 9 Shell oil pumping stations, blocking the daily flow of about 250,000 barrels of 

petroleum. The facilities were seized in several areas by groups of demonstrators 

charging that ‘‘government election preparations are unfair’’, according to Shell Nigeria Managing Director Ron Van Den Berg. Two of the company’s helicopters and 

an oil rig were seized by the angry mobs. According to The Washington Post:

Registration for the 1999 presidential vote began with youth groups in the oilrich Niger River delta region using the occasion to protest what they say is 

their exclusion from the political process. Communities in Nigeria’s southern 

states say their interests are not represented in federal politics, which is dominated by northerners. Although rich in oil, the Niger River delta states are 

among the poorest and most neglected in Nigeria (Oct 9, 1998; p. A38).

Since the election of President Obasanjo, the militancy has grown more violent 

and sophisticated. Since December 2005, militants have launched a series of ferocious attacks on Nigeria’s oil industry, sending crude oil prices sky-rocketing on the 

world market. Nigeria is the world’s eighth largest exporter of oil, producing 2.4 million barrels a day. Nigeria is also the fifth-largest oil exporter to the United States, 

after Mexico, Venezuela, Canada and Saudi Arabia. Nearly half of Nigeria’s oil exports go to the United States. 

Since December 2005, incidents in the Western part of the delta have regularly 

shut down about 10 percent of the country’s oil production. Four foreign workers 

were abducted in January by the Movement for the Emancipation of the Niger Delta 

(MEND) and were held for three weeks before being released. The attacks have escalated with such ferocity that there is much concern about Nigeria holding together 

as a country. On Feb 18, 2006, MEND launched a string of attacks on the country’s 

oil industry, abducting nine foreign workers, bombing a major tanker loading platform and sabotaging two pipelines. These forced Royal Dutch Shell to suspend exports from the 380,000-barrel-a-day Forcados tanker terminal, and shut down the 

115,000-barrel-a-day EA oilfield as a precaution. The Forcados loading platform, 

which is located about 20 kilometers offshore, was set on fire while a pipeline was 

blown up. [The nine foreign contractors who were kidnapped—three Americans, two 

Egyptians, two Thais, one Briton and one Filipino national working for Willbros 

Group of Houston—were working on a pipe-laying barge. They were released on 

March 27 without harm.] As a result of these attacks, Nigeria’s oil production was 

cut by 455,000 barrels a day out of a total of about 2.4 million barrels, or by about 

20 percent. The effect was to push up crude oil prices sharply: Brent crude oil for 

April delivery jumped $1.57 a barrel, to $61.46, on London’s ICE Futures exchange.’’ 

‘‘We would expect the potential for further chaos in Nigeria to provide a floor for 

prices above $60, and we expect that Nigeria will continue to be a major issue in 

terms of supply security,’’ Kevin Norrish, an analyst at Barclays Capital in London, 

wrote in a note to investors’’ (The New York Times, Feb 25, 2006). 

MEND said the attacks were a response to military air raids in Delta State and 

would be followed by another wave of violence ‘‘on a grander scale.’’ The militants 

are determined to cut Nigeria’s oil production by 30 percent and have warned all 

59

foreign workers to leave the delta immediately. The militants want more local control over the Niger Delta’s vast oil wealth and the release of two ethnic Ijaw leaders, 

including a militia leader who is on trial for treason. 

The ferocity and frequency of the recent attacks have alarmed observers. First, 

they threaten to destabilize the global oil supplies, spiking up prices. More unsettling, the attacks breed their own perverse incentive for more attacks. The militants 

derive their funds from ‘‘bunkering’’—the practice of siphoning off oil from pipelines 

for sale on the black market. Attacks, which partially shut down oil supplies to the 

world market, raise oil prices, yielding greater revenue from ‘‘bunkered oil’’ to finance purchase of arms for more attacks. Second, the attack are exacerbating political tensions and the climate, which had already deteriorated due a misguided bid 

by supporters of President Obasanjo for a constitutional amendment to permit a 

third term. Fortunately, the Senate on May 15 shot down that bid. 

Although the attacks have been directed primarily at Royal Dutch Shell, the oldest and largest oil producer in Nigeria, their real target is the government, said Sebastian Spio-Garbrah, an analyst at the Eurasia group, a private research firm (The 

New York Times, Feb 25, 2006). ‘‘They are trying to hurt the government, not really 

the oil companies,’’ Mr. Spio-Garbrah said. Efforts to defeat militant groups militarily have floundered, enabling them to carry out several audacious attacks on oil 

facilities. ‘‘The government says the group pays for its weapons by stealing oil, but 

several government officials, including two admirals of the Nigerian Navy, have 

been charged with stealing oil as well’’ (The New York Times, Feb 25, 2006). 

The Obasanjo regime, though far better than the string of military gangster regimes it succeeded, has been scandalously incompetent and hopelessly ineffective in 

tackling the myriad of social ills confronting Nigerians. Provision of basic social 

services—clean water, reliable electricity, etc.—remains sporadic and anemic. And 

since President Obasanjo took office in 1999, ethnic and religious fighting, land disputes and conflicts between communities have driven more than 3 million Nigerians 

from their homes, according to the National Commission for Refugees, which also 

said the problem of internal displacement in Nigeria, Africa’s most populous nation, 

was worsening and appeared to be a permanent feature of society. 

The commission said the problem of displaced people stemmed from three decades 

of military rule that caused deep but repressed anger within society. The return to 

civilian rule in 1999 allowed frustrations to surface and erupt into conflict. At least 

14,000 Nigerians have died in ethnic, religious or communal fighting since 1999, according to conservative estimates of human rights groups. In the most recent outbreak, religious riots in February, 2006 in Maiduguri, in the north, killed up to 50 

people, mostly Christians, and left many more homeless. Those killings sparked reprisal murders of Muslims in Onitsha, in the south, where thousands fled their 

homes, seeking refuge in army barracks or leaving the area altogether. Many disputes that lead to displacement begin over land or political control of local areas 

and later take on an ethnic or religious dimension, the commission said (The New 

York Times, March 14, 2006). 

Section E: Fighting Corruption Effectively 

What breeds corruption, bribery, and other types of malfeasance in modern Africa 

generally are the system of pervasive state controls and regulations; concentration 

of economic and political power in the hands of the state or a few individuals, the 

institution of undemocratic systems of governance that lack accountability, the muzzling of the press to expose corruption, the perversion of the judicial system, 

banishing the rule of law; and an elite culture that tolerates high levels of corruption. Obviously it would be futile to rail against corruption and still keep in place 

the very system which breeds it. 

The Byzantine maze of state controls and regulations provide the ruling elites 

with rich opportunities for self-aggrandizement. Revenue collection, passport control, and even government stationery can all be diverted, manipulated or used for 

illicit gain. Civil servants demand bribes, exploit their positions in government, and 

manipulate the state’s regulatory powers to supplement their meager salaries. Almost every government regulation and nuance of policy can be ‘‘exploited’’ for private gain. 

Corruption has become the canker of the African body politic: malignant and pervasive. It has been nurtured by the system of state controls and an elite grab mentality. It has remained an intractable problem because the prevailing intellectual 

environment characterized by brutal repression, censorship and state control of the 

media, does not permit an exposure of the problem. This is aggravated by the absence of rule of law. The crooks are seldom caught and the law can hardly be enforced when the chief culprit is often the head of state himself. 

60

In the post-colonial period, corrupt Nigerian governments have combated corruption half-heartedly and cynically with various ad hoc measures, such as probes and 

anti-corruption commissions. Most Nigerians collapsed into hysterical laughter when 

they heard their head of state, General Sani Abacha, (‘‘The Butcher of Abuja’’) had 

launched ‘‘a war on corruption,’’ because they knew ‘‘several of his cronies, active 

or retired, are millionaires and no military men involved in the banking scandal 

[that cost the country $180 million] have been touched. ‘When the soldiers have 

eaten enough, he retires them,’ said a civil-rights lawyer.’’ (The Economist, June 8, 

1996, 48). Recall that from 1988 to 1994, Nigeria’s military rulers squandered $12.4 

billion in oil revenue, estimated by the September 1994 Pius Okigbo Commission 

to be a third of the nation’s foreign debt. A Petroleum Trust Fund set up by former 

head of state, General Ibrahim Babangida ‘‘lost’’ $600 million. No one was prosecuted. In fact, for an entire decade—1990 to 2000—not one single high government 

official was indicted and punished for corruption. Since corrupt governments hardly 

reform themselves, the pressure must come from outside the state—from civil society. 

To fight corruption effectively requires taking the following steps:

1. Exposing the problem, which is the business of the media, and

2. Appointing an aggressive Attorney-General,

3. Punishing the corrupt for all to see that crime does not pay. No exceptions 

to the rule of law.

The first step has been stymied by the fact that the media in much is controlled 

by the state. Only 8 African countries have a free media. The state uses the media 

to control the flow of information and to conceal corruption and wrong-doing. When 

intrepid journalists expose them, they are brutally assaulted by security forces—or 

worse. 

On Feb 22, 1998, armed soldiers invaded the Ondo State television station, ransacked the editorial offices and took away the evening bulletins which included accounts of the assault two days earlier on the station’s media managers, Dunni 

Fagbayiyo and Tunde Yusuff. Five days later, unidentified gunmen killed Tunde 

Oladepo, a senior editor of The Guardian, after breaking into his Ogun State home. 

‘‘He was shot to death in front of his wife and children. The murderers stayed in 

the house for 30 minutes after shooting him to make sure the journalist was dead’’ 

(Index on Censorship, May/June 1998, 116). 

Attacks on the media continued, even under the ‘‘democratic’’ regime of President 

Olusegun Obasanjo. On April 4, 2000, nine armed members of the dreaded State 

Security Service (SSS) invaded This Day newspaper offices in Abuja, claiming they 

were looking for ‘‘subversive and incriminating documents’’ (Africa New Service, 

April 14, 2000). Earlier on Jan 19, 2000, 50 police raided the international press 

center in Lagos with guns drawn, demanding computer files and arresting journalists on suspected charges of terrorism (Africa New Service, April 14, 2000). A compendium of these attacks can be found in the Appendix A. Obviously, control of the 

media must be wrestled out of the hands of the state if the fight against corruption 

is to succeed. 

Second, an aggressive Attorney-General or anti-corruption czar should be appointed and given the powers of prosecution. Such an Attorney-General or czar must 

be protected by the President himself or, failing that, by western donors. Third, 

combating corruption will require reforming the judicial system. Only an independent judiciary can establish the rule of law and prosecute corrupt government 

officials. As we have seen, state governors loot with impunity because the corrupt 

are seldom punished. 

Further measures can be taken as well in the fight against corruption.

• The pervasive array of state controls which breed corruption and malpractices 

must be removed. It entails the removal of controls on prices, exchange rates, 

imports, exports, rents, and others. These controls did not exist in Africa’s 

own indigenous economic system in the first place. Such measures would liberalize the economy, by taking economic power out of the hands of the state 

and giving it back to the people where it rightly belongs. Incidentally, this 

is partly what Structural Adjustment Programs are intended to do.

• An independent central bank is also vital, as can be discerned from the following quote:

‘‘Swiss judicial authorities have opened an inquiry into alleged money laundering 

and participation in a criminal organization involving Nigeria’s late leader Sani 

Abacha and his entourage. Abacha, his eldest son Muhammed Sani Abacha, his 

widow Mariam and brother Abdulkadir, are among those accused by Nigeria’s electVerDate Mar 21 2002 12:05 Jul 17, 2006 Jkt 000000 PO 00000 Frm 00064 Fmt 6633 Sfmt 6621 F:\WORK\AGI\051806\27648.000 HINTREL1 PsN: SHIRL
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ed government of having ‘‘systematically plundered’’ the country’s central bank, a 

Swiss statement said earlier in October, 1999. A Geneva lawyer representing the 

Nigerian Government alleges Abacha and his entourage diverted $2.2 billion from 

the Central Bank alone’’ (The Washington Post, Oct 27, 1999; p.A25). 

I would recommend rotating governors of central banks in a region, say West Africa; which would help enhance the ‘‘independence’’ of the central bank. Further, to 

help combat corruption effectively, it might be best to appoint a non-national (a 

Westerner or African) to head the anti-corruption units. For example, a Ghanaian 

may be appointed in Nigeria and a Nigerian in Kenya. The reason is that quite 

often non-national Africans do perform well when pulled out of their socio-cultural 

environment since they are not burdened by a myriad of social obligations. A Ghanaian is not Yoruba or Igbo and therefore cannot be expected to grant special tribal 

favors to a corrupt Yoruba politician.

• Lessons must be drawn from anti-corruption efforts in other African countries. African governments set up anti-corruption commissions with no teeth 

to prosecute the corrupt. And when they snoop too close, they are shut down. 

Such was the case of Richard Leakey, appointed by Kenya’s ex-president Daniel arap Moi in July 1999 to head the civil service in an effort to eradicate 

corruption. But when he pried too close, he was sacked six months later. The 

next anti-corruption czar, John Githongo, appointed in 2001 by the new president, Mwai Kibaki, did not fare better. When he fingered thieving ministers, 

threats were made on his life and he fled to Britain in 2005.

The rare case of success in the fight against corruption comes from South Africa. 

There President Thabo Mbeki swung into action and established ‘‘The Scorpions,’’ 

South Africa’s elite anti-corruption unit, which had pursued ‘‘bigger fish’’—senior 

members of the ruling party, the African National Congress (ANC). The Scorpions 

went after Jacob Zuma, the deputy president and the most likely successor to President Mbeki, who was ‘‘accused of (and denies) asking for 500,000 rand (or $68,000) 

from a foreign arms company, Thales, to protect it from a probe into alleged kickbacks’’ (The Economist, Aug 2, 2003; p.45). Other senior government officials also 

felt the sting of The Scorpions: Tony Yengeni, chief whip of the African National 

Congress was jailed in 2003 as was Winnie Madikizela-Mandela, former wife of Nelson Mandela. The conviction of Yengeni centered on his purchase of a luxury sport 

utility vehicle that was sold to him at a steep discount by a defense contractor. The 

contractor, European Aeronautic Defense and Space Co., eventually won a contract 

to build radar systems as part of a $6 billion package of weapons purchases made 

by the government in 2001 (The Washington Post, Oct 4, 2001;p.A26). 

Mrs. Madikizela-Mandela, the president of the ANC’s Women’s League and member of Parliament, was convicted of defrauding a bank of more than $103,000. She 

was still a member of parliament when she was jailed. She was involved in a 

scheme in which a codefendant obtained personal loans for fictitious Women’s 

League employees by using her name and letterhead to support the fraudulent loan 

applications. Mrs. Madikizela-Mandela publicly denied the bank fraud charges. In 

an interview with the City Press newspaper, ‘‘she acknowledged financial problems, 

but said the investigation was inspired by her rivals within the A.N.C. She had been 

one of Mr. Mbeki’s most vocal critics, assailing him for questioning whether H.I.V. 

causes AIDS and condemning the government for promoting conservative economic 

polices that she says neglect the poor. ‘‘One can safely conclude that the campaign 

is being waged within my organization,’’ Mrs. Madikizela-Mandela said (The New 

York Times, Oct 18, 2001; p.A5). 

The Scorpions report an impressive conviction rate of 85 percent and enjoy huge 

popular support. And the secret of their success? According to The Economist (Aug 

2, 2003),

Cases of graft are known about largely because the police, newspapers and 

political parties are free to unearth them. The national prosecuting authority 

now has over 3,500 staff and fast-rising budget worth 950 million rand (or $129 

million) in 2003. In July 2003, Mr. Mbeki authorized a probe into 285 cases of 

fraud in the department of justice and the courts and police are broadly free 

of political meddling. The president says of his deputy’s troubles that the ‘law 

must run its course’ ’’ (p.45).

Again, it is worth recounting the ingredient of this successful campaign: freedom 

to unearth cases of corruption (exposure), prosecuting the corrupt for all to see and 

providing funds and staff to the prosecuting authority. These ingredients are woefully lacking in Nigeria. If Nigerian leaders want to be popular with their people, 

they should establish ‘‘The Scorpions’’ or ‘‘Black Mambas’’ in the country. 

62

Section F: What the U.S. Can Do to Help 

It would be wrong to leave you with the impression that corruption alone is the 

major scourge afflicting Nigeria. In the grips of a constitutional crisis, torn by sectarianism, North-South divide over claims to the presidency, religious and ethnic rivalries and communal violence, the country teeters on the brink of disintegration. 

These broader issues are best handled are best handled in a ‘‘sovereign national conference.’’ This political vehicle was successfully used by Benin in 1991 and South 

Africa in 1994 (the Convention for a Democratic South Africa—CODESA) to chart 

a new democratic political dispensation for their respective countries. President 

Obasanjo indeed convene such a confab—the National Political Reform Conference. 

But, as it turned out, it was a scam. The Nigeria Labor Congress (NLC) declared 

it a ‘‘failed conference’’ because it had a pre-determined agenda and therefore, was 

not ‘‘sovereign’’ (The Vanguard, July 14, 2005). 

To help Nigeria in its efforts to tackle its problems, the U.S. government could 

do any of the following:

1. Help tighten international regulations against money-laundering, especially 

in developing countries in Asia, which now seem to be the destination point 

of looted funds.

2. Help persuade the Nigerian government to place a certain percentage of oil 

revenues into an offshore escrow account, to be managed by an independent 

body for the benefit of the people in the Niger Delta.

3. Gently goad, not the President but the Nigerian Senate to convene a sovereign national conference. The Senate has shown some streak of independence in voting against the Constitutional amendment that would have allowed President Obasanjo to seek a third term.

I believe with patience and political will, Nigeria can be saved. 

Thank you. 

APPENDIX A: ATTACKS ON THE PRESS

2004 World Press Freedom Review 

Personal attacks and detention of journalists were rampant throughout the country in 2004: The following is a compendium of brutal attacks:

• On 12 January SSS officers interrogated Tony Eluemunor, Abuja bureau chief 

for the Daily Independent newspaper after an 8 January story regarding links 

between the presidency and an alleged plot to oust Anambra State Governor 

Chris Ngige. Eluemunor was initially refused access to his legal counsel and 

was pressured for several hours to reveal his source for the article. He refused 

to do so.

• On 21 January nine journalists were suspended for providing coverage of an 

aborted strike over increases in petroleum products prices. The Nigeria Labor 

Congress had planned the strike. The journalists, all of whom worked for the 

state-owned Ondo State Radiovision Corporation (OSRC) in southwestern Nigeria were given suspension letters that accused them of ‘‘dereliction of duty.’’ 

The letters were signed by OSRC board chairman Clement Adebambo on the 

orders of the State Governor Olusegun Agagu who was reportedly outraged 

by the reports. The decision of the management to suspend the journalists for 

covering a news worthy and relevant story exemplified an unsettling willingness to be influenced by political forces.

• A correspondent for the African Independent Television (AIT) station, Joseph 

Nafoh, was assaulted on 27 March by a group of men allegedly acting on orders from Boniface Kobani, a councillorship candidate for the People’s Democratic Party (PDP) in southern Nigeria. While trying to capture incidents of 

multiple voting and electoral fraud on film, Nafoh was attacked and his camera was taken before police officers at the polling centre. The police did not 

attempt to arrest the attackers. Nafoh’s camera was returned to the AIT office on 29 March by State Commissioner for Information Magnus Abbey, but 

his tape had been removed.

• On 25 June, a group of policemen in Osun State, southwestern Nigeria, beat 

Gbenga Faturoti of the Daily Independent newspaper almost to the point of 

unconsciousness. O. C. Agboromoti, an assistant superintendent of police at 

the Osun State parliament ordered officers to attack the journalist. Faturoti 

was beaten because he had not turned off his mobile phone while reporting 

at the House of Assembly. After being slapped in the face, manhandled and 

dragged from the building he was arrested and detained for several hours.

63

• Kola Oyelere, a correspondent for the privately owned Nigerian Tribune in 

Kano State, northwestern Nigeria was arrested by police on 4 July and 

charged with publishing false information after the publication of a story entitled ‘‘Panic in Kano? As Fresh Crisis Looms.’’ Before he was arrested, he was 

declared, ‘‘wanted’’ by the police and charged under six sections of the penal 

code. Oyelere said that while in police custody he was repeatedly beaten and 

tortured and was refused access to his medication for typhoid fever. On 8 

July, he was released by Kano police and the charges against him dropped.

• On 9 July, two journalists, Lawson Heyford of The Source and Okafor Ofiebor 

of The News were arrested and detained for their alleged association with 

Pastor Joe Alatoru, who had accused two senior police officers of taking bribes 

from him. Police officers from the Rivers State Security Agency’s Special Operations Squad (SOS) arrested the three individuals and told them they 

would face trial for trying to frame two police officers. The journalists were 

detained for over 18 hours before the charges against them were dropped. 

While little explanation was offered as to why the journalists had been detained in the first place, the Media Foundation for West Africa condemned 

the arrest as an example of the abuse of power that police authorities use 

whenever a news report threatens them in any way.

• The assistant commissioner of police, H. C. Ugwu allegedly ordered the assault of The Sun newspaper correspondent Uja Emmanuel on 21 July while 

Emmanuel was investigating the abduction of journalist Johnson Babajide. 

The incident took place in Makrudi, the capital of Benue state in north central Nigeria. Babajide, a correspondent for the Nigerian Tribune was said to 

have been taken by police early in the day and was alleged to have been severely beaten by a group of men hired by the People’s Democratic Party 

(PDP). Ugwu confronted Emmanuel while he was at police headquarters inquiring about Babjide. The officer accused him of publishing criticism of the 

way police were handling a conflict in nearby Kwande. Ugwu reportedly ordered his officers to seize Emmanuel’s camera and tape recorder and to beat 

him in front of other reporters. 

Babajide was released that day and reporters waiting outside police headquarters said that he was soaked in his own blood and weeping as he recounted his story of having been dragged out of his house earlier that morning by the governor’s chief press secretary Tahav Agerzua and his group of 

20 thugs. He was allegedly tortured and told by the governor’s special advisor 

on security that police were acting on orders from the Benue state governor.

• In one of several raids perpetrated by the State Security Service (SSS) officers, the editorial offices of The Insider Weekly news magazine in Lagos were 

attacked on 4 September. Officers smashed the doors in and vandalized the 

office, seizing several documents. While inside, they arrested production manager Raphael Olatoye. They later visited the printers’ office and seized all 

copies of the magazines’ most recent edition. Before leaving the editorial offices they chained and locked the doors. Later that day the SSS published a 

statement saying that they had ‘‘stormed’’ the magazine because it had been 

‘‘consistently attacking, disparaging and humiliating the person and the office 

of the President and the Commander-in-Chief.’’

The next day the officers returned to confiscate files, computers and other 

equipment. Editor-in-chief Osa Director, fled his home on 6 September after 

reports that the SSS were looking for him. Despite the harassment, no official 

charges were laid against the paper. 

Later that week the Global Star weekly newspaper in Lagos became the 

subject of an SSS attack. On 8 September SSS forces raided the newspapers 

office, and in the absence of editorial consultant Isaac Umunna, arrested his 

wife Hope Umunna and other staff members. Officers seized computers and 

other documents and continued to raid the paper’s printing press and to arrest the press’s principal officers. 

The arrested staff members were detained until later that day. On 9 September, Isaac Umunna reported to the SSS office and was arrested and detained. For several days he was denied visits from his wife or lawyer and was 

refused permission to see a doctor when he developed diarrhoea. On 15 September, he was taken on a 10 hour journey to SSS national headquarters in 

Abuja and was questioned overnight. He was released the next day and escorted to his home in Lagos.

• Weekly Star correspondent Owei Sikpi was assaulted by SSS operatives in the 

River State capital of Port Harcourt on 25 October. The attack followed a 30 

September story in which Sikpi wrote about Steven Diver, chairman of the 

64

Southern Ijaw Local Government Area in Bayelsa State, accusing him of illegally and recklessly spending state money. A group of men, who identified 

themselves as SSS officers forced Sikpi into a house where they beat him severely, stripped him and then photographed him. They threatened to publish 

the photos if he wrote about Diver again. Prior to the attack Sikpi received 

a threatening letter from Diver’s legal counsel.

• As the wave of politically motivated violence continued in 2004, two public 

radio stations in the southeastern state of Anambra were vandalized and 

torched on 10 November. The conflict began when supporters of State Governor Chris Ngige interrupted a meeting of supporters of local politician Chris 

Uba. Fighting ensued between the two groups and later that night over 100 

pro-Uba supporters stormed public radio stations in two separate communities and attacked staff members. They tied up and beat the staff before setting fire to the studios. Similar incidents of violence plagued the country as 

citizens were directed to aggressively support opposing political leaders. 

On the same day, at the Federal High Court building in Ikeja, Lagos, Diran 

Oshe, photographer for the daily Vanguard was attacked and beaten by military intelligence agents acting as bodyguards for Major Hamza Al-Mustapha. 

Oshe was trying to take a picture of the Major who was on trial for involvement in the murder of The Guardian editor Alex Ibru, when agents beat him 

with the butts of their rifles and smashed his camera.

Although intimidation of the press through violent means was rampant throughout the country, forces also harassed journalists through diplomatic means. Silvia 

Sansoni, a journalist with The Economist was expelled from Nigeria on 19 February 

after being accused of ‘‘abusing her accreditation.’’ Later in the year, Stephan Faris, 

a reporter with U.S. based Time magazine was prevented from entering the country 

when he arrived at Murtala Muhammad airport in Lagos on 27 November. He was 

later expelled without explanation. In a continued display of contempt for the foreign press, several foreign radio broadcasts were banned throughout the year. 

One of the more disturbing aspects of the blatant harassment targeted at journalists is that perpetrators act with impunity and are rarely punished for their violent 

actions. As most attacks are carried out by police or security forces to avenge perceived criticism or to uphold directives given to them by state authorities, there are 

no measures in place to prevent the further escalation of violence. For his part, 

President Obasanjo seems unwilling to promote a regime that creates a safer and 

more tolerant environment for journalists. 

Source: http://www.freemedia.at/wpfr/Africa/nigeria.htm

Mr. SMITH OF NEW JERSEY. Let me just ask, on law enforcement, 

you heard just a few moments ago Mr. Ribadu’s concern that some 

of the recommendations or some of the requests for cooperation 

that he had made were not honored and we will follow up on that. 

But I would be interested in what your take on United States 

law enforcement cooperation with the Nigerians is. What puts reform at risk? 

One of the questions I asked earlier was about upcoming elections, whether or not that might lead to a U-turn or a diminution 

of the reform movement. What is your response to that? 

But also—and you mentioned this just a moment ago, Dr. 

Ayittey—that the Asian banks, you know, China and we have had 

a couple of hearings on our Subcommittee on the growing influence 

of China, that country’s ability to strike deals, ask no questions, 

with the intent of getting oil, gas, minerals, lumber, and to do it 

at the lowest price, and perhaps even with a fair degree of corruption, and we know that China is very active in Nigeria. Does that 

put reform at risk? 

In the PRC itself today if you publish information, economic information that the government construes to be a state secret, you 

go to prison. You go to a laogai, a concentration camp. They don’t 

just do it for religious freedom advocates and democracy advocates. 

They do it for economic and capitalist-oriented Chinese as well. 

65

Does that then carry through to their dealings with Nigeria, which 

could put a real dent on any reform movement? 

The Publish What You Pay coalition, as you know, has said that 

solid minerals ought to be included in the transparency effort. 

What has been the progress on that score? 

And I guess that is it for now. 

Mr. GOLDWYN. Let me take questions two, three and four. I don’t 

have anything to contribute on the law enforcement cooperation. 

That is not an area I have a lot of exposure to. 

Sustainability of this effort, the only way this transparency effort 

will be sustained is if the law is passed and if the government 

agencies are reformed. You will still need political will to actually 

enforce them. But this has to be institutional reform. The law 

being passed will be a critical first step; and we will see I think 

this year, by the end of the year, whether or not NEITI will be a 

permanent part of the Nigerian Government. 

But the real key is going to be reforming the Department of Petroleum Resources because corruption is pretty sophisticated. This 

is not about people sticking their hand in the till. This is how does 

a decision get made to bid out a particular bit of acreage. Is there 

enforcement or is there not for tax collections. You know, what Nigerians call value for money. A project gets, you know, bid out and 

paid for. Does it actually get built? And that is all training institutions’ function. 

And we will see. We will see in the next year and a half. It will 

be a long process to actually bring these institutions up to speed, 

but we are going to see pretty quickly whether there is money and 

political will behind it. If so, then I believe the effort will be sustainable, because people will have better information, people will 

have the ability to fight back against the government. The rules 

will be changed, which will deter the opportunities for corruption; 

and I think that will provide sustainability, not foolproof, but I 

think that will help. 

Let me take solid minerals next. It was the good fortune of Nigeria that the senior special assistant for EITI was named the minister of solid minerals by the President. This is Oby Ezekweseli, 

and she is bringing NEITI principles to that. They have redone the 

mining cadastre. They are passing a new mining law. 

I have been able to give them a little bit of advice on that with 

a former—the help of a former director of the Minerals Management Service here. They are looking to implement probably one of 

the most transparent systems in mining that Africa has seen, and 

the minister is committed to reducing the discretion of the minister 

to make these decisions because she sees that as the greatest 

weakness. 

So I think there is enormous promise when this bill is passed 

and, more importantly, when the implementing regulations are 

passed as well. It is another area where the U.S. Government has 

expertise where we could probably lend a hand. 

On China, finally, China has legitimate energy security needs 

and they are competing and they are competing in the way we used 

to do business 20 years ago. It is a challenge not to global energy 

security, because if they produce the oil it doesn’t really matter 

who does it, but it is a challenge to U.S. policy. Because they don’t 

66

have the same concerns about democracy or about transparency, 

they are not part of this EITI effort, they don’t contribute to it, and 

the mini-bid round that is taking place in Nigeria this weekend has 

empowered China with the right of first refusal on a couple of 

blocks in exchange for China’s grant of building certain infrastructure. 

In my view, that is not completely consistent with transparency, 

because Nigerians will never know whether they are getting the 

marketplace price for the block of oil, and they will never know 

whether they are getting the market price for the railroad or for 

the road either because neither of them are probably tendered. And 

that is why I think it is a bad practice. 

That is how China is competing in Africa. In Angola, there are 

similar problems with loans. I think China’s strategic interests long 

run are the same as ours in promoting stability. But China doesn’t 

see it that way yet. I think that is something we need to work on 

not as an adversary but dealing with them as they are competing 

with us. But it is definitely a challenge to United States policy in 

Nigeria and other parts of Africa, and I think it is something government to government we ought to take on with the Nigeria Government. 

Mr. AYITTEY. I agree with David for much of what he said, and 

I want to add a couple of things. 

I personally see the increasing incursions of China in Africa as 

a danger, a danger in three senses. 

Number one, it takes the pressure off African governments to reform. We can see this in Sudan, for example. We can’t—the Darfur 

region, for example, we can’t call what is going on genocide. Even 

the United Nations Security Council can’t take any action against 

them. They can’t call it because China will block it. 

Why is China doing so? It is because China has invested a considerable amount of money in Sudan’s oil. 

Now we have seen something like a redux of the Cold War era, 

where smart or shrewd African dictators are going to play one superpower against another to extract maximum aid. 

Of course, both the United States and China are looking for oil 

in Africa. So if one despot doesn’t get it from the United States it 

is going to try the others. 

Now this is not going to help us in the—I mean, the Chinese 

have no scruples about the type of regimes that they deal with; and 

they are willing to supply whatever weapons or whatever—even if 

those weapons are used to suppress and kill the African people. 

So this is why—I mean, this is very dangerous. I personally 

would like to see the African Union take a firm stand in terms of 

like defining what human rights are that needs to be protected or 

even defining one standard for democracy in Africa. 

Of course, the Chinese are not alone. Of course, there are the 

French wars in Africa; and sometimes, you know—I must say 

this—sometimes the United States also casts a blind eye to flagrant human rights violations. Take a look at Equatorial Guinea, 

for example, where you have massive corruption because you have 

one President Obiang, for example, who owns the country. He himself has more than $700 million in overseas bank accounts, some 

of them, including Riggs Bank, here in Washington, D.C. 

67

So we are looking at—we have lots of problems in Africa. The 

Chinese are not going to help. At least what we can do is the message we can send is one consistent set of standards. 

Mr. SMITH OF NEW JERSEY. Finally, is the United States using 

the anti-corruption provisions of the AGOA effectively in Nigeria? 

Mr. AYITTEY. No, I don’t particularly think so. In terms of using, 

I think, the mechanism for applying the anti-corruption measures, 

what the U.S. can do is probably through the Millennium Challenge Account where they are—where there have been very, very 

strict benchmarks, at least 15 of them, which an African country 

will have to qualify before it gets any of those Millennium Challenge grants. So far, Nigeria doesn’t qualify. 

Mr. GOLDWYN. I think it is important when a country is moving 

in the right direction to show some patience and some nuance in 

how we apply standards. I wouldn’t deprive—given the progress 

that Nigeria is making, if we are not applying the AGOA standards 

on anti-corruption to the letter, I wouldn’t punish Nigeria, given 

the enormous progress that is being made, as long as the direction 

is moving forward. I think these can be blunt instruments, and I 

wouldn’t use them bluntly, particularly with Nigeria when we see 

the kind of courage that we see from Mr. Ribadu and because we 

want to see this movement go forward. 

In the end, all of these efforts are in some extent about politics. 

If the leaders don’t get a political benefit from doing this, then it 

is going to be very hard for them to sustain the effort. There is no 

question that all anti-corruption efforts undermine the existing political class in almost any country and they create instability, And 

so there has to be a dividend. Debt relief for Nigeria was a huge 

dividend. It was indispensable to sustain the anti-corruption effort. 

Because what did they have to show other than depriving a lot of 

people of their iron rice bowls? So I would just say we should be 

patient and gentle in how we treat the AGOA standards. 

Mr. SMITH OF NEW JERSEY. Thank you. 

Mr. Payne. 

Mr. PAYNE. Thank you very much. 

I certainly agree with what you are saying and the tremendous 

amount of corruption that we have seen in Africa, and I just wonder when this whole era of external forces on Africa will finally 

end. 

As you know, we went through colonialization and World War II 

started and then, after that, decolonialization began and countries 

started to ask for their independence and fight for their independence. 

Kenya led the way with Jomo Kenyatta and the Mau Maus that 

said we will have to take it by those means. Other countries, 

Ghana had a more peaceful way. But whatever was done, it was 

done, and colonialism was starting to leave. But, once again, it 

gave Africa a problem in trying to have stable governments after 

World War II and then going into the Cold War. 

And during the Cold War, as you know, this whole question of 

we don’t care what you do, Patrice Lumumba killed, you put in 

Mobutu. Moroccans helped him three times stay in power, and that 

is why we allowed Morocco now to take western Sahara, because 

they have been our long-time allies. And western Sahara gets indeVerDate Mar 21 2002 12:05 Jul 17, 2006 Jkt 000000 PO 00000 Frm 00071 Fmt 6633 Sfmt 6601 F:\WORK\AGI\051806\27648.000 HINTREL1 PsN: SHIRL
68

pendence from Spain and Morocco said, well, it is ours; and the 

United States looks the other way because Morocco has been our 

hand up there for many years and won’t let a referendum go, never 

opposed South Africa——

Talk about China today. We never opposed apartheid. It wasn’t 

until the CAAA, it wasn’t until people in cities and states had divestment in states, never did, on a Federal level, until the Comprehensive Anti-Apartheid Act of ’86 passed, which was vetoed by 

President Reagan but was overridden because men like Senator 

Lugar had enough courage to say to his good friend, I am going to 

vote for this anyway. It was almost in the ’90s before we would 

even say that, apartheid governments, because they were our 

friends and we looked the other way. 

We supported militarily Portugal in Cape Verde, Mozambique, 

Guinea-Bissau and—up until ’75 when NATO weapons—they defeated African armies, and we saw pictures of NATO weapons. And 

NATO was not supposed to use any weapons in their colonial powers, but they were captured. I was there. I saw them. 

If you have got an army, you don’t put a NATO United States 

supply gun here and a Portuguese gun there. You are using whatever means you have to win your war, and that is a fact. And I 

have got pictures from when I was down there in the ’70s. 

So Africa has been just the one that has been kicked around forever, and now along comes the Chinese. They are going to put in 

the same kind of, you know, anything goes policies; and once again 

it is going to be a battle now because they have very little or no 

regard for human rights. However, the U.S. had a policy that we—

whatever you do to your people, it is all right, too, because we want 

to kill and defeat communism. 

So Africa, like I said, is the richest continent in the world, and 

it makes everyone else rich, and they remain poor. It doesn’t make 

sense. And people do gold and they become wealthy because the 

gold sits in a safe somewhere or diamonds or gold or oil, and the 

people there live on a dollar a day, 70 percent. The other 20 percent are more fortunate. They live on $2 a day. Unbelievable. 

But I just think that we need to get support, as you have indicated, Mr. Goldwyn, to get the West to support these new initiatives being made in these countries so that they can actually have 

the financial support but also the technical support to move in and 

to try to install these anti-corruption procedures. 

And, Dr. Ayittey, I have heard your talks for many, many years 

and agree that something has to change. And maybe, as we have 

indicated, a change is coming. Maybe the winds of change is what 

is happening, and Nigeria is an example of what we can do if we 

give the support that we should give to the countries. And we have 

to bring those countries like France to bear, and say you can’t do 

this anymore. 

Malaysia, when they go in and they take timber and they drag 

it through and they destroy all of the ecology, all they want to do 

is get the timber out, whether it is stripping whole mudslides in 

countries in Indonesia and other third-world countries where—this 

whole kind of raping of the natural resources and the rush to get 

resources in this economically driven world. 

69

So I would hope, too, that we could, UN or EU, take up this 

whole commission and, if we are not willing to fund it, perhaps 

other organizations in the world could fund this whole transparency organization so that we could really move toward eliminating this object of corruption that exists. 

So I would just appreciate both of your testimonies; and if any 

of you have anything else you would like to say, you certainly can 

do it on my—the rest of my time. 

Mr. AYITTEY. If I may add to what you said—and I thank you 

for your great concern for Africa. It is a continent which breaks my 

heart. It is bleeding. And for many of us who are Africans, for example, we find the situation intolerable, totally intolerable and 

maddening because there is no reason why we should be in such 

a state, given the natural resources wealth of the continent. 

But there is one thing which I would like to add. It is just not 

the foreigners who come in and rape and plunder the resources in 

Africa. Our own Government, our own leaders are doing so. Look 

at the Congo, for example, where you have the second scramble. 

Governments in Uganda, Rwanda, Burundi, they are plundering 

the wealth of the Congo. 

Now this is where it is always important for us to make a clear 

distinction between the African leaders or governments and the African people. The leadership has been the problem, and that is why 

Ribadu talked about governance. We have a very, very poor governance. 

We sort of believe that, look, these problems in Africa have to be 

solved by the Africans themselves. The United States can’t micromanage solutions for Africa from Washington. We have to make 

the effort, the initiative, to solve the problems. What the U.S. can 

do is provide support for the initiatives that we ourselves are taking. We need better governance. 

If you look across Africa today, there are 54 African countries. 

Only 16 them are democratic. Look at how they change constitutions to run for the third term. In Uganda, in Chad, for example; 

in Egypt, for example; Eritrea, Ethiopia, recently held elections, 

okay. But we have a continental organization called the AU. It is 

totally hopeless. It can’t even define democracy. Now that organization can be compared to the Organization of American States in 

Latin America. It has done far better. 

So we urge you in terms of, you know, to identify those Africans, 

the African initiatives, those Africans who want to bring African 

solutions to African problems and support them. 

Thank you. 

Mr. GOLDWYN. One brief comment. I wasn’t sure when you were 

talking about external forces whether you were talking about external pressure to promote anti-corruption. Oby Ezekweseli would 

have my head if I didn’t say that this effort in Nigeria is home 

grown. There are countries where definitely the World Bank, the 

IMF, the U.S. pressured other countries to do this and say, here 

is something you ought to join. 

But this effort was home grown in Nigeria. It was the President’s 

idea and Oby’s idea, to design something which has not been done 

anyplace else, pushed it through. They have fought some pretty aggressive hand-to-hand battles with their own government and with 

70

the companies in order to push this through; and that is what give 

me hope, is that this is not an externally driven change. This is an 

internally driven change. And that gives me hope that it will be 

sustained. 

Mr. PAYNE. That is great. Thank you very much and, hopefully, 

that can be the model for Africa. Believe me, if they can do it in 

Nigeria, it will be a snap in the other countries. Thank you. 

Mr. SMITH OF NEW JERSEY. Dr. Ayittey and Mr. Goldwyn, thank 

you so much for your testimony and your very valuable insights 

and recommendations. Thank you. 

The hearing is adjourned. 

[Whereupon, at 4:38 p.m., the Subcommittee was adjourned.]

Æ