UN Identifies Corruption, Insecurity as Obstacles to Doing Business in Nigeria

Dike Onwuamaeze

Beyond harsh regulatory frameworks, infrastructure deficit, and bureaucratic bottlenecks, Country Representative for United Nations Office on Drugs and Crime (UNODC), Dr. Oliver Stolpe, has identified corruption and insecurity as major obstacles to doing business in Nigeria. Stolpe stated this yesterday in Lagos during the “LCCI Stakeholders’ Engagement Session on Ease of Doing Business (EoDB).”

The UNODC country representative pointed out that corruption and insecurity caused additional $500 million cost to liner services that passed through the Gulf of Guinea, especially within the Nigerian and Sao Tome and Principe corridors.

He disclosed that a survey by UNODC and National Bureau of Statistics (NBS) in 2019 revealed that N675 billion was recorded in 2019 as petty bribes paid by Nigerians, adding that half of this sum was collected on Nigerian roads, which was an additional cost to operators in the transport and logistics sector of the economy.

According to Stolpe, “Insecurity and corruption are factors that affect the ease of ease of doing business in Nigeria and foreign direct investment.    
“Now, the issue of crime and corruption from business perspective is first and foremost simply an additional cost that you have to calculate and that makes it high because unpredictable events are very hard to calculate.

“When we look specifically at the shipping industry it is estimated that the shipping industry at the Gulf of Guinea, which is Principe and Nigeria corridor, incurs an additional $500 million due to insecurity in the Gulf of Guinea due to increased freight rate and additional security and staff related costs that shipping companies incur in order to secure their vessels.”

Although insecurity incidence in the Gulf of Guinea had significantly reduced, Stolpe said “as at last year I was still hearing that the insurance companies have not reduced the rates for people who are doing shipping in the Gulf of Guinea because of the persisting fear of attacks since many of these things have to do with fear.

“Moving on to the issue of bribery, the National Bureau of Statistics and our office conducted the second national corruption survey in 2019.
“Here we were measuring household survey and were looking predominantly at what is referred to as ‘petty’ corruption that involved N675 billion in 2019. About half of those bribes were collected on the roads. That was a huge addition to operators in transport industry.”

He recalled that he has been working with the Nigerian government since April 2000 but stated that his greatest frustration was that Nigeria’s vibrant anti-corruption systems, both in laws and institutions, “do not seem to be translating in less corruption. That is really the conundrum that we are basically facing. I think that we ought to get much more innovative and determined in our approaches”.

Stople, however, stated that there had been a couple of encouraging initiatives from colleagues in the coalition for business integrity, who were addressing specific challenges in the entry of ships into the ports in respect of their cargo.

“That has greatly reduced the time taken, the uncertainty about what is required in terms of documentations and it has tremendously reduced the cost for the shipping industry,” he said.

Comptroller General of Customs, CG. Bashir Adewale Adeniyi, said Nigeria Customs Service (NCS) embarked on early lead in implementing reforms of its process to improve EoDB.

Adeniyi, who was represented by Custom Area Controller, TinCan Island Port, Lagos, Comptroller Dera Nnadi, said, “The service expectation is that its reforms will result in 15 per cent reduction of average trading costs as envisaged for developing countries like ours and will further result in 60-80 per cent increase in the number of small medium entrepreneurs involved in doing business.”

Similarly, Special Adviser to the President on Presidential Enabling Business Environment Council (PEBEC) and Investment, Dr. Jumoke Oduwole, said PEBEC’s secretariat was driving five major work streams in 2024 to accelerate the country’s EoDB.

Oduwole said regulatory were legislative, judicial and sub-national reforms and business champions’ programme.

She added that the secretariat was already making progress across all the five major work streams.

In his opening remarks, President of Lagos Chamber of Commerce and Industry (LCCI), Mr. Gabriel Idahosa, said the journey towards enhancing the ease of doing business in Nigeria would demand multi-faceted approach.

Idahosa said, “One that addresses regulatory frameworks, infrastructure deficits, bureaucratic bottlenecks, and most importantly, offers support towards boosting entrepreneurship that drives our economy forward.

“We should also become more careful about uncertainties regarding the workings of our monetary and fiscal agencies in their policy interventions.

“Investors need to have clear outlook and direction about our policies and how these affect their investment decision making.”