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Some finance experts have said that until the Nigerian
government is serious about the war against corruption, the country may never
see significant development in the years to come.

Akinbade Ibisiola, head, research team, at Resource Cap Company,
a portfolio management firm, said corruption is the only “cancer” that is
eating the development status Nigeria should have attained.

“I see no reason why Nigeria at 50 years old cannot achieve some
serious level of developments like other nations, since we have both human and
natural resources,” Mr Ibisiola said.

“The only problem here is that a country like ours, where
different governments keep awarding the same project at different cost, can
never see significant improvement in infrastructure, the basic tool for any
economic development,” he said.

Afrinvest West Africa Limited, an investment management company,
in a report last month, also noted that the past government seemed to have lost
its grip on Nigeria’s anti-corruption war, as the successes achieved by the
Economic and Financial Crimes Commission (EFCC) have been eroded.

“Prior to Ribadu’s removal, the fear of arrest and conviction by
the EFCC was an ever growing consciousness in the minds of Nigerians,
especially within the political class. Under his leadership, the
anti-corruption war led to the prosecution of several high profile individuals
including former state governors, cabinet ministers, and senators, a scenario
that was hitherto unprecedented,” the report said, adding that despite
criticism that the EFCC was selective in its approach to fighting corruption,
there was noticeable change in the conduct of public officials.

“Nigeria made such significant strides in the war against
corruption that it climbed out of the bottom of global rankings in the
corruption perception index,” the report said.

Hopeless case?

According to the report, the current state of affairs in Nigeria
is “extremely disheartening” and leaves one with a feeling of hopelessness.

“Where an agency of government loses direction, following a
change of guard, shows inherent weaknesses in the nation’s governance and
institutional structures. A situation in which a contract for the construction
of a second runway at the Abuja international airport was awarded at the sum of
N64 billion ($400m) indicates a brazen proclivity towards misappropriation of
funds.Though this contract was only recently revoked, it is indicative of the scale
of abuse present within all three tiers of government across the nation,” it
said.

The report said the 48.4 percent in the 2010 budget over 2009,
which, according to government figures, was only 39 percent implemented, also
follows a similar trend of gross inflationary provisions for both recurring and
capital expenditure, without sufficient justifiable explanation.

Experts said for the government to deliver its goals of vision
2020 projects, making Nigeria one of the developed countries, President Goodluck
Jonathan has to find the political will to fight corruption headlong, as the
obvious slide down the corruption perception index will continue to impede
Nigeria’s quest for sustained economic growth.

On banking reform

In the same development, Kingsley Moghalu, Central Bank’s deputy
governor on financial system stability, recently said Nigeria has a lot to
learn from the developed nations, especially on the reformation of the banking
industry.

Citing an example, Mr. Moghalu said Nigeria needs to learn from
the new financial law, the Dodd-Frank Wall Street Reform Consumer Act, which
has just been signed into law by President Barrack Obama in the United States
(US).

“That Act is very important because of the dominant position of
the US in global finance. The banking reform exercise in Nigeria has some
similar characteristics with the Dodd-Frank Act,” he said, adding that “when
you see the characteristics, you’ll discover that there are strong parallels in
what is happening in Nigeria today and what the Central Bank is trying to do.
That makes it very clear that the reforms the CBN is setting out are not just
isolated idiosyncratic reaction to financial crisis, but are part of global
best practice adapted to the Nigerian condition,” he said.

Mr. Moghalu said one of the characteristics of the Act is that
it increases the authority of regulators to resolve systemic threats.
“Regulators can now break up threat financial firms whose capital collapsed and
has negative system life implication,” he added.

He also said that the Dodd-Frank Act contains the Volcker Rule,
which is important to the Nigerian economy.

“The Volcker Rule prohibits large banks from making speculative
propriety trades with their own funds. It limits banks, investment of banking,
edge funds and private equity funds to a maximum of three percent of every bank
capital, and it requires banks to spinoff non-core banking businesses and
financial derivatives.

“I think this is exactly what is happening in Nigeria. We have come to see
that it is time to split core banking out of non-banking business. We have our
own Volcker Rule, and it will be coming out very shortly,” he said.