CISLAC dialogue: Institutionalising beneficiary ownership register will tame corruption, facilitate economic growth

Corruption is the albatross of the nation’s economy. It has retarded economic growth and escalated poverty in the land. In an effort to curtail corrupt practices through the instrumentality of the Beneficiary Ownership (BO) Transparency Register, the Civil Society Legislative Advocacy Centre (CISLAC), recently organised a one-day dialogue aimed at shaping advocacy for policy and legal reforms around beneficial ownership register. Sulaimon Olanrewaju reports.

Nigeria is Africa’s largest economy and the 26th in the world with the potentiality of becoming a major global economic powerhouse. But as stated in the Economic Recovery and Growth Plan (2017-2020), the potentiality has not become a reality principally because of corruption and poor management of public finances which result in poor social and development indices.

Corruption is a major hindrance to Nigeria’s economic prosperity. It is the herbicide that kills Nigeria’s seed of economic growth. It is the key cause of poverty and deprivation. But this fact is quite known to the nation’s leaders who have always acknowledged it and deployed various strategies to tame the demon.

In his inaugural address in 1999, Chief Olusegun Obasanjo said, “The impact of official corruption is so rampant and has earned Nigeria a very bad image at home and abroad. Besides, it has distorted and retrogressed development.”

He went ahead to establish both the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) but those efforts did not reduce corrupt practices in the country.

Similarly, Alhaji Umaru Yar’Adua, Obasanjo’s successor, said at his inauguration in 2007 that, “We are determined to intensify the war against corruption, more so because corruption is itself central to the spread of poverty. Its corrosive effect is all too visible in all aspects of our national life. This is an area where we have made significant progress in recent years, and we will maintain the momentum.”

Although he also put measures in place to fight the menace, not much success was recorded.

The trend was not different for Dr Goodluck Jonathan at his inauguration in 2011. The former President said, “The bane of corruption shall be met by the overwhelming force of our collective determination, to rid our nation of this scourge. The fight against corruption is a war in which we must all enlist, so that the limited resources of this nation will be used for the growth of our commonwealth.”

But again, not much was accomplished by Dr Jonathan with respect to curtailing corruption.

President Muhammadu Buhari’s most popular mantra even before he won the election in 2015 was “If Nigeria does not kill corruption, corruption will kill Nigeria.” This was one of the three pedestals on which he based his campaign.

So, at his inauguration ceremony in 2015, he promised to make fighting corruption a cardinal part of his administration.  His commitment to a full-scale anticorruption agenda was accentuated in May 2016, when he attended the International Anti-Corruption Summit organised by the government of the United Kingdom.

It was at this global stage that he reaffirmed his commitment to strengthening anti-corruption reforms through implementing programs aimed at exposing corruption, punishing the corrupt and driving out the culture of corruption.

Following these commitments, the Federal Government sought to deepen institutional and policy reforms and this led to Nigeria joining the Open Government Partnership (OGP) in July 2016.

The OGP is an international multi-stakeholder initiative focused on improving transparency, accountability, citizen participation, and responsiveness to citizens through technology and innovation. It brings together government and civil society champions of reforms which recognise that government is likely to be more effective and credible when governance is open to public input and oversight.

At the national level, OGP introduces a domestic policy mechanism through which the government and civil society can have an ongoing dialogue. At the international level, it provides a global platform to connect, empower and support domestic reformers committed to transforming any society through openness.

Despite these multilevel programs, the significant challenges in optimizing domestic resources, revenue mobilization for sustained development financing, have been occasioned by the obscurity of the true state of the country’s full public finance and resource management processes, which include undisclosed ownership of corporate entities, tax evasion, and avoidance.

In response to this, several initiatives and efforts have been introduced, including the institutionalisation of a beneficial ownership report by the Nigeria Extractive Industries Transparency Initiative (NEITI) through the launch of the Opening Extractives Programme (OEP), a global five-year scheme to unveil the real owners of assets in Nigeria’s oil, gas and mining sectors.

Also is the enactment of the Companies and Allied Matters Act (CAMA) 2020 in August 2020, which provides for the establishment of a beneficial ownership register for all corporate entities in Nigeria by the Corporate Affairs Commission (CAC); and the signing of the Petroleum Industry Bill into law in August 2021 which provides a legal framework for the effective and efficient implementation and integration of open data reforms like the beneficial ownership transparency initiative.

To institutionalise the beneficiary ownership register, the CISLAC-led AES cluster with support from USAID, last Thursday, April 29th, 2022, organised one-day policy dialogue in Lagos.

In his address, CISLAC Executive Director, Auwal Musa Rafsanjani, said while the efforts of NEITI are commendable for making efforts in establishing an extractive sector register, legitimate corporate businesses have an integral role to play in ensuring the effectiveness of the register.

According to him, “While legitimate corporate businesses have an integral role in national development, the involvement of Politically Exposed Persons (PEP), who conceal corruptly acquired wealth through the complex networks of companies deliberately created to hide their identities, has further increased the risks they pose to non-fortified economies. The Siemens, Halliburton, and Malabu oil scandals, to cite a few high-profile cases, had a net impact on revenue leakages that were unbearable for the country’s finances and the citizens’ economic well-being.

“We were already facing some sanctions from the European Union for the nonexistence of anti-money laundering legislation; while we see and hear of prosecutions of individuals and entities involved in the Panama papers leaks and the Wiki-leaks among others, there seems to be no legal framework that enables the convictions of all that was involved from Nigeria.

“Aside from the fear of the international community, it is worthy of note here that concealing of the beneficial owners costs lives of our fellow countrymen as terrorists use international financial systems to sustain their operations.”

The ED added that without transparent ownership of Nigerian and international companies operating within the Nigerian jurisdiction, Nigeria would not be able to stop the bleeding of cash through illicit financial outflows which are perpetually on a geometric progressive increase year on year and cost the country about $17 billion annually.

He expressed the belief that a collaborative partnership by relevant stakeholders in the beneficial ownership campaign would help give a voice to “this simple but strategic endeavour that will help curb corruption in our financial, procurement and other strategic sectors and contribute effectively to domestic revenue mobilisation for financing development of critical sectors of the economy.”

Other stakeholders at the event stressed the need for a strengthened and robust collaboration among all concerned stakeholders to ensure the complete institutionalisation of an open, effective, and free-for-all ‘Beneficiary Ownership (BO) Transparency Register’.

According to an EFCC official at the event, the lack of transparency on the part of business owners hampers investigation of corrupt practices, as most of them present invisible addresses that can’t be traced while some even put unborn children as directors or use their family names interchangeably. He, therefore, stressed stronger collaboration with the commission to help tackle the menace.

From the angle of the Federal Inland Revenue Services (FIRS), it was also revealed that some companies try to evade tax by not declaring their profit or even hiding their income tax under a pseudonym.

“Some don’t separate company tax from personal income which makes it difficult for the regulatory authorities to regulate and monitor. And for the extractive sector where both foreigners and Nigerians are involved, it is still a problem dealing with leakages, as some elements still connive with them.”

The participants at the dialogue then called for collaboration of all agencies for the battle against corrupt practices to be effective and productive.