North East Nigeria is on the brink of a major humanitarian crisis. The region has historically been marked by poverty and underdevelopment, and more recently has been ravaged by Boko Haram. In an attempt to address both the current crisis and the longstanding poverty of North East Nigeria, on October 26, 2016, President Muhammadu Buhari inaugurated the Presidential Committee on the North East Initiative (PCNI) to “serve as the primary national strategy, coordination and advisory body for all humanitarian interventions, transformational and developmental efforts in the North East region of Nigeria.” PCNI is chiefly responsible for overseeing and ensuring the execution of the Buhari Plan, a four-volume, roughly 800 page, five-year blueprint for the comprehensive humanitarian relief and socioeconomic stabilization of the North East. Projects include unconditional cash transfers and the deployment of mobile health units and will be linked with the current UNOCHA Humanitarian Response Plan. The total budgetary requirement is 2.13 trillion Naira (approximately US$6.7 billion), of which the Nigerian Federal Government commits an estimated 634 billion Naira and the remaining 1.49 trillion Naira is anticipated to come from “many DFI’s, International Aid Agencies, NGO’s and the Private Sector Stakeholders.” (PCNI also replaced previous initiatives launched under former President Goodluck Jonathan: the Safe Schools Initiative (SSI), which focused on making schools safer for children, and the Presidential Initiative for the North East (PINE), whose aim was to kick start the economies in North East Nigeria and reposition the region for long-term prosperity.)
On the surface, the Buhari Plan sounds like a step in the right direction. But given the controversies over fraud and corruption surrounding PINE, PCNI’s predecessor, there are reasons to worry. Even putting those past issues aside, there is inevitably a high risk of corruption in a large government plans like the PCNI—especially in an environment as notoriously corrupt as Nigeria—and the current mechanisms for mitigating the risk of fraud and corruption are insufficient.
In order to reduce the corruption risks associated with a project like PCNI, the Nigerian government—and the international donors and other stakeholders providing financial support for the project—should focus on reducing the opportunities for corruption in three principal ways: (1) embedding a fraud prevention strategy; (2) employing external, independent auditors; and (3) maintaining transparency of activities and funding flows. To its credit, the Buhari Plan has already integrated aspects of these approaches. Nevertheless, there is still room for improvement:
- Embedding a fraud prevention strategy
The Buhari Plan calls for a special purpose Federal Government Development Corporation for the North East to help PCNI meet its objectives and “operationalise the coordination of all interventions within the Buhari Plan by all the region’s State and non-State actors.” The Corporation includes not only the PCNI Governing Board to provide oversight but also an outsourced Financial Management, Procurement and Resource Mobilisation Hub (FMPH) to be responsible for financial management, financial reporting, internal audits, procurement, and resource mobilization. The Governing Board is to “ensure the institution’s fiscal integrity, preserve and protect its assets for posterity, oversee corporate Plans, budgets and accounts,” while the FMPH is responsible for “ensur[ing] [an] internal control system is in place to achieve accountability at all levels.” Stakeholders should nonetheless insist that there is an embedded fraud prevention strategy to facilitate the development of controls to prevent, deter, detect, and respond to incidences of fraud and corruption both within projects and within PCNI. This strategy should focus on ongoing fraud risk assessments as to identify and address potential vulnerabilities. Specific policies related to whistleblowing, conflict of interest, code of conduct, and anti-bribery and corruption should also be both implemented and communicated to all relevant actors and incorporated into employee training. Other strategies to consider to combat fraud and corruption can be found here.
It should be noted that the Buhari Plan does include a specific reference to mitigating the risk of fraud or corruption within the Local NGOs Capacity Building Project:
“NGOs may sometimes use grants provided for other purposes other than what it was intended for. PCNI and other Stakeholders involved will maintain good, quality financial management control systems and will commit to monthly financial monitoring and annual external audits. PCNI will also develop strong, clear and transparent selection criteria, standard operating procedures for the cash transfer activities, segregation of duties and control mechanisms to prevent fraud within the cash transfer component.”
However, risk-mitigation and fraud prevention strategies for other projects are not clear in the publically-available plan. Therefore, stakeholders should ensure an appropriate level of scrutiny so that fraud control mechanisms will be identified, and responsibilities appropriately allocated, prior to the Plan’s rollout in the North East.
- Employing external, independent auditors
Under the plan, the FMPH is the agency with the responsibility to “facilitate any and all financial reviews of the funds and accounts under the authority of Federal Ministry of Finance, including, periodic audits and financial reviews by the Auditor General of the Federation of Nigeria, or independent public accounting agencies as appointed by the Auditor General.” While periodic audits and financial reviews are certainly effective mechanisms to reduce the opportunity and/or continuance of corruption, instead of possibly assigning this responsibility to the Auditor General, all periodic audits and financial reviews should be implemented by external, independent (nongovernmental) auditors. This should reduce the risk of bias and add credibility to the reported information, which in turn will improve the Buhari Plan’s “attractiveness” to donors and enhance its accountability to the plan’s intended beneficiaries. Further, external auditors will be able to identify and evaluate weaknesses in the financial reporting system and to provide recommendations based on recognized best practices. This should contribute to the continuous improvement of the plan and lower the risk of financial misreporting and fraud.
- Maintaining transparency of activities and funding flows
As part of its strategy to ensure transparency and accountability, PCNI states that it will align financial management and procurement with international best practices, along with specifically operating a dashboard to track interventions and serve as a monitoring and evaluation tool. The Buhari Plan references this dashboard within its monitoring and evaluation framework through “development and maintenance of an M&E IT software system,” allocating the task to PCNI.
While a publically-available dashboard should help improve transparency of activities and funds to the majority of its stakeholders, as many of the plan’s beneficiaries may not have regular access to the internet, additional mechanisms to increase the accessibility of information to the affected population may need to be explored. At first glance this might not seem important for reducing corruption; however, since the affected people are the ones who are supposed to be directly benefiting from the Plan’s programs and activities, they are well-positioned to verify project implementation and identify irregularities as they occur. The Buhari Plan alludes to this idea in its Strategic Communications Framework: “PCNI will not lose sight that the impacted people of the North East are the reason for its work. Dialogue with citizens on decisions and implementation is paramount to have supported sustainable solutions; PCNI will practice transparency in its goals, decisions and program implementation.” Nevertheless, transparency as a corruption prevention mechanism, not just decision-making tool, should be given greater emphasis. Open and regular dialogue with relevant stakeholders, including affected communities, will be imperative to ensuring that a sufficient level of transparency is maintained.
Overall, the Buhari Plan appears to have the right intentions and the programs outlined will surely help address the needs of millions in the North East. However, it is essential that the risks of corruption are adequately assessed and properly mitigated to avoid the Buhari Plan becoming another government intervention infected with the disease of corruption.
Fascinating post Ashley. I really enjoyed your discussion about the fraud prevention strategies discussed in your first bullet. I’m curious what you think the likelihood is that the Nigerian government would allow independent auditors to perform thorough audits of the plan. I agree that financial supports of the plan would be wise to request independent audits, but given the problems with PINE, I wonder if independent auditors would be provided access to enough information to effectively perform their duties.
Reblogged this on Matthews' Blog and commented:
Sadly those in the same government that have been implicated in the alleged fraud are yet to be investigated by the government.
Thank you for this little preview of your thesis work! I wonder about the cash transfer component of the regional development plan. I gather from the excerpt you shared at the bottom of your first bullet point, that the government thinks that cash transfer programs are particularly prone to corruption. Is this actually the case? If so, given that the government is only providing a portion of the funding of the overall plan, would it make sense to have outside organizations run the cash transfer program? I know that Give Directly has years of experience in certain regions, but I’m not so sure about Nigeria. I also have no idea about the complicated socio-political ramifications of having an international org handing out cash in rural villages versus the national government.
Thanks Ashley! I was interested in the “dashboard” program you mentioned and how it would differ from the audits you describe both in the plan and potentially in addition to the plan. Is there a clear picture of where and when the dashboard would be rolled out and what information it would contain? Is it meant to be an outward-facing tool while audits would be only for internal evaluation? Would increasing accessibility to the dashboard itself be valuable? If so, are there different forms, like a mobile platform, be used?
Great comment. As of now, the dashboard does not appear to be up and running. It will be interesting to see to what level information is provided and also if it stays up-to-date. I agree, increasing accessibility, and even awareness of its existence, will be worth considering.
This is a great post! I wonder what “open and regular dialogue” with affected communities looks like from an anti-corruption standpoint. It seems like nothing in this plan empowers normal citizens to have their corruption allegations taken seriously, if they are verifying implementation and are really able to spot corruption. I also wonder if stakeholders won’t be afraid to report corruption, thinking that then ALL funding will disappear and they will be left in the lurch. On top of that, given the infrastructure challenges of northeast Nigeria, the logistics of that dialogue would surely be very difficult. Do you have any sense what a solution looks like?
Thanks! I agree, open and regular dialogue is by no means easy, especially given logistical and security concerns. It may be a matter of implementing partners who are working on the ground and have direct access to the community take on a level of responsibility to ensuring complaint mechanisms are in place and the community has a voice. Even then, ensuring allegations of corrupt practices make it up the chain to relevant authorities cannot be guaranteed. In regards to fears of cutting out funding if corruption cases come to light, this is unfortunately a reoccurring issue in development/humanitarian funding. It will be important that a culture of open communication is upheld and that organizations/partners are not “punished” for disclosing information.