THE CONTRIBUTIONS OF EFCC IN PROMOTING FINANCIAL

ACCOUNTABILITY AND TRANSPARENCY IN NIGERIA

NZEJEKWU IFEYINWA ANENE PG/MBA/09/53825

DEPARTMENT OF ACCOUNTANCY FACULTY OF BUSINESS ADMINISTRATION

UNIVERSITY OF NIGERIA ENUGU CAMPUS

JUNE, 2011

THE CONTRIBUTIONS OF EFCC IN PROMOTING FINANCIAL ACCOUNTABILITY AND TRANSPARENCY IN NIGERIA

NZEJEKWU IFEYINWA ANENE PG/MBA/09/53825

DEPARTMENT OF ACCOUNTANCY FACULTY OF BUSINESS ADMINISTRATION

UNIVERSITY OF NIGERIA ENUGU CAMPUS

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF MASTERS DEGREE IN BUSINESS

ADMINISTRATION (MBA)

SUPERVISOR: DR. (MRS.) R.G. OKAFOR

JUNE, 2011

TITLE PAGE

THE CONTRIBUTIONS OF EFCC IN PROMOTING FINANCIAL

ACCOUNTABILITY AND TRANSPARENCY IN NIGERIA

CERTIFICATION

This is certify that I Nzejekwu Ifeyinwa Anene a post

graduate student in the Department of Accountancy with

Registration Number PG/MBA/09/53825 has satisfactorily

completed the project research in partial fulfillment of the

requirement for the award of Masters Degree in Business

Administration (MBA) in the Faculty of Business

Administration, University of Nigeria, Enugu Campus.

…………………………… ……………………. NZEJEKWU IFEYINWA ANENE DATE

APPROVAL PAGE

This project has been approved for the Department of

Accountancy, Faculty of Business Administration, University of

Nigeria, Enugu Campus.

………………….. ………. …………………… DR. (MRS.) R.G. OKAFOR DATE (PROJECT SUPERVISOR)

………………………….. ……………………. MR. R.O. UGWOKE DATE (HEAD OF DEPARTMENT)

DEDICATION

I dedicate this work to Almighty God, my lovely husband

Mr. Basil Nzejekwu and my lovely children.

ACKNOWLEDGMENTS

My profound gratitude goes to ALMIGHTY GOD for His

direction and providence to have come this far.

I am also grateful to DR. (Mrs.) R.G. Okafor whose ideas

and interaction guided my intellectual development.

I acknowledge the contribution of my husband, my MBA

Lecturers and my fellow MBA students and my co-workers for

their immense support and encouragement.

ABSTRACT Several years of military misrule and mismanagement had weakened the economic management processes and institutions in Nigeria. There was no transparency and accountability in government (Public Sector) and private sectors and Nigeria became notorious for endemic corruption. The result was the inability of government to deliver services to the Nigeria public. Most private companies both in the oil and non-oil sector have constantly evade taxes and have collide with officials to evade custom duties and payment of taxes. In addition, widespread perpetration of economic and financial crimes like advance fee fraud (419), money laundering, cyber crime, banking fraud and endemic corruption have had severe negative consequences on Nigeria, including decreased direct foreign investment in the country. Consequently, the Economic and Financial Crimes Commission (EFCC) was established as one of the mechanisms for the prevention, investigation and prosecution of corrupt practices and economic and financial crimes in the public and the private sector. Finally, this research work is aimed at looking into the various contributions of the Economic and Financial Crimes Commission (EFCC) in promoting financial accountability and transparency. To achieve this aim five research questions were developed. The study adopted the survey research approach using the three study areas. The EFCC Lagos, EFCC Enugu and PHCN formed the population of the study. A sample size of 55 was choosing using Taro Yamane’s model while simple random techniques was used to select the sample. Data retrieved from 55 completed questionnaires were subsequently presented in tables while simple percentage were used to analyse and answer the research questions formulated to guide the research work. After the analysis of data, the hypotheses tested reviewed that the contributions of EFCC has effectively promoted financial accountability and transparency in Nigeria. Therefore, the researcher recommends the following: developing an intensified information technology, staff training, capacity building and health care fraud control.

TABLE OF CONTENTS

Title page i

Certification ii

Dedication iii

Acknowledgement iv

Abstract v

Table of contents vi

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study 1

1.2 Statement of the Problem 4

1.3 Objectives of the Study 6

1.4 Research Questions 7

1.5 Research Hypothesis 7

1.6 Significance of the Study 8

1.7 Scope of the Study 9

1.8 Limitations 9

1.9 Definition of Terms References 10

REFERENCES 12

CHAPTER TWO: REVIEW OF RELATED LITERATURE 13

2.1 Origin of Economic and Financial Crimes Commission 14

2.2 Powers of EFCC in Controlling Crimes 19

2.3 Matters on EFCC Investigate 22

2.4 Capital Market Fraud 23

2.5 EFCC and other Arms 34

2.6 Constraints faced by EFCC in curbing fraud in Nigeria 35

2.7 Achievements of EFCC References 41

CHAPTER THREE: RESEARCH METHODOLOGY 50

3.1 Research Design 52

3.2 Area of Research 53

3.3 Population and Sample Size 53

3.4 Research Instrument of Data Collection 56

3.5 Validation of Instrument 57

3.6 Method of Data Collection 57

3.7 Method of Data Analysis 58

CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA

4.1 Data Presentation 60

4.2 Testing of Hypotheses 69

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.1 Summary of Findings 75

5.2 Conclusion 76

5.3 Recommendations 77

Bibliography 80

Appendix A 82

Appendix B 83

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Fraudulent activities, economic mismanagement,

corruption, lack of accountability and transparency have been

the bane of the economy. Fraud and criminality remained

elusive and therefore brought inefficiency in the system,

especially in the public sector.

This menace lead to the establishment of EFCC in 2002 by

an Act of the National Assembly which was later amended in

2004. It was borne out of the determination of the Federal

Government to root out corruption and sanitize the Nigerian

economic environment by enforcing all economic and financial

crimes laws.

The Act mandates the EFCC to combat financial and

economic crimes and the Commission is empowered to prevent,

investigate, prosecute and penalize economic and financial

crimes. Also, the EFCC is charged with and has been

investigating cases of abuse of office, diversion of public funds

through fraudulent award of contracts, tax fraud, illegal

bunkering, terrorism financing, capital market fraud, cyber

crime, banking fraud, etc.

With a mission to curb the menace of corruption that

constitutes the clog in the wheel of progress; protect national

and foreign investments in the country; imbue the spirit of hard

work in the citizenry and discourage the crave for ill-gotten

wealth; identify such ill-gotten wealth and confiscate them;

build an upright work force in both public and private sector of

the economy; and contribute to the global war against financial

crimes and terrorism financing; the advent of the EFCC has

impacted positively on Nigeria’s global acceptance being a

turning point in the country’s anti-corruption crusade.

Since its establishment, the EFCC has taken the bull by

the horns working tenaciously to fulfill its mandate. Under the

current leadership, it vigorously pursues its mandate of

investigating cases earlier highlighted; the Commission has

made concerted efforts in identifying, tracing and freezing,

confiscating, or seizing proceeds derived from such illicit

activities. EFCC, from inception, has also played 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.

So far, the Commission has been able to and still

recording successes in several areas of its mandate. Among

others, it has recorded several convictions on corruption, money

laundering, oil pipeline vandalism and related offences. Assets

and money worth over $11 billion have been recovered from

corrupt officials and their cohorts. The Commission is tenacious

with over 65 high profile cases at advanced stages of

prosecution in several courts in Nigeria and over 1500 other

cases in court and secured over 600 convictions.

Before then there were other provisions of Financial

Crimes Laws such as:

Money laundering amendment Acts 2003, No 7; 1995, No

The Advance fee fraud and other related offences Act 1995

as amended.

The failed Banks (Recovery of Debts) and financial

malpractices on Banks Acts 1994 as amended.

The Banks and other financial institution Act 1991 as

amended.

Miscellaneous offences Act 1983.

Any other law or regulations relating to economic and

financial crimes including the Criminal code and penal

code.

The commission is also designated to Nigerian financial

intelligent unit (NFIU). It is thus, substantial that our problem

is not the absence of legislation (Law) or the deficiencies in them

but the total neglect to enforce them have been the plight of

disaster,

1.2 STATEMENT OF THE PROBLEM

A nation where financial and economic crimes are endemic

cannot attain economic stability, growth and development.

According to Irving Kristol’s (2OO7), the problem is always far

more important than devising a solution, for he who can define

the problem has always exercised a large degree of intellectual

sovereignty over the range of possible solutions that must be

imagined

Nigeria being a country where corruption is pandemic has

been rated both domestically and internationally as a corrupt

nation. Public officials take huge bribes and the cost of public

goods and services are inflated, government often pays for non-

existent goods and services. Even when such corrupt practices

are exposed, it has always been played to the gallery and

sacrificed at the alter of backside bargaining. The corrupt

practices that have characterized and painted the nation black

include fraud, embezzlement, falsification of financial

information, obtaining by false pretence, lack of transparency

and accountability among others.

These evils have in no small measure negated economic

stability, growth and development in our country. Experience

has shown that both the public and private sectors have

continued to suffer inefficiency and ineptness and that growth

indices and graph are having a downward slope. This has

brought the pertinent question — are there adequate control

measures and checks to stem this ugly tide (corruption)?

Poor and insincere policy conception, formulation and

implementation on economic and financial crimes in Nigeria

have been responsible for the low achievement recorded in

curbing and stamping out economic and financial crimes in the

country. Hence, the emergence of the “Economic and financial

crimes commission to enhance financial accountability and

transparency in Nigeria.”

1.3 AIMS/OBJECTIVES OF THE STUDY

The major aim of this study is to assess the contributions

of EFCC in promoting financial accountability and transparency

in Nigeria. The objectives include:

1. To examine the responsibilities and functions of EFCC.

2. To carry out a comprehensive analysis on the

contributions of EFCC in detecting and controlling fraud

in Nigeria.

3. To examine how effective EFCC contributions benefited

Nigeria public and private sectors since her inception.

4. To examine the contributions of EFCC in enhancing

financial accountability and transparency.

5. To effectively examine the achievements and successes of

the commission.

1.4 RESEARCH QUESTIONS

1. What are the responsibilities and functions of EFCC?

2. What are the contributions of EFCC in detecting and

controlling fraud in Nigeria?

3. How effective EFCC contributions benefited Nigeria public

and private sector?

4. What are the contribution of EFCC in enhancing financial

accountability and transparency?

5. What are the achievements and successes of the

commission?

1.5 RESEARCH HYPOTHESES

Also in line with objectives and research questions are the

hypotheses of this study.

1. EFCC has no responsibilities and functions assigned for

her.

2. EFCC contributions cannot benefit the Nigeria public and

private sector.

3. There is no achievement and successes on the side of the

Commission.

4. The contributions of EFCC cannot enhance financial

accountability and transparency.

5. EFCC as a machinery cannot effectively detect and control

financial and economic irregularities in Nigeria.

1.6 SIGNIFICANT OF THE STUDY.

The research work will be useful and moreover be a source

of information to the followings

• Government with this research work will be witty and

aware of the extent the activities of EFCC has contributed in

administration and controlling of fraud in Nigeria. It will also be

of great significant in examining the area of weakness and how

best to improve them for effective regulation of fraud.

• To the academic, the research work will help them

formulate more theories and strategies that will enhance the

effectiveness of EFCC in ensuring financial accountability and

transparency. It will also contribute to the enrichment of

literature on EFCC and serve as a body of reserved knowledge

to be referred to by researchers.

• Public sector, by this we mean all government

parastatals, institutions, ministries, corporations etc.

FIUs work will expose them to the activities of EFCC.

• Private sector: By this we mean individuals and corporate

bodies who have contributed their resources to provide

goods and services to the public at a profit. They carry

out their various activities which are expected to be done

within the ambits of laws and legislations governing their

operations. They include sole proprietorship, partnership,

corporate organizations among others.

1.7 SCOPE AND LIMITATION OF THE STUDY.

The scope of this study tries to take a holistic view of the

activities of EFCC in Nigeria and how these can help improve

financial accountability and transparency. It embraces their

operations both in the public and private sectors with the aim of

improving financial efficiency.

1.8 LIMITATIONS.

This research work would suffer many set backs due to a

lot of reasons. One of such is the inaccessibility of information

from the office of EFCC. Presently, they are security conscious

and unwilling to disclose information and plans available some

write ups and journals which would have been helpful for this

research work. Ideally, the work should have involved more

states but due to some inherent constraint such as time and

money but effort would be made to at least touch a great

number of states to have a balance view of this research.

1.9 DEFINITION OF TERMS.

• EFCC: This is an acronym for Economic and Financial

crimes commission. It is a commission created by an act

of the National Assembly in 2002 and was amended in

2004. It is charged with the responsibility of investigating

and enforcement of all laws against economic and

financial crimes.

• FRAUD: The crime of deceiving somebody in order to

collect money or goods illegally. It also means a person

who pretends to have qualities and abilities, skills etc

that he or she does not really have to deceive others.

• It is an acronym for Nigeria Financial intelligent unit. It is

an autonomous central national agency, domiciled within

EFCC with responsibility of receiving and analyzing

financial information.

• INVESTIGATION: This means a special kind of

examination of accounts or records carried on by an

investigator with the predefined purpose according to the

necessity of the situation (Chike Nwoha 2003:33).

REFERENCES

‘Economic and Financial crimes commission EFCC (2004),

Information Handbook 1, Jexcel commercial and securities printers, EFCC, PP 1-5.

“EFCC made me cry,” (2007): Journal of EFCC (Zero tolerance),

4th April, vol.1 No. 4. “On the Run”, Journal of EFCC (Zero tolerance) Dec.2, 2007, vol.

2. Dariye, Nyarne Join Kalu, Turaki in Prison, Vanguard, vol. 23 No. 60374, front page & p. 15. EFCC establishment Act, 2004.

EFCC money Laundering and prohibition Act, 2004

Ise, O.L, I’m ready to return Loot, (2007): Vanguard, vol. 23: No 6, July 23Frontpage p. 15.

Nigeria Financial intelligent unit information Handbook (2007):

“Public Service corruption, The New offensive,” Journal of EFCC (Zero tolerance) Jan.3, vol.1 No. 3.

CHAPTER TWO

REVIEW OF RELATED LITERATURE

Fraud and Criminality of all kinds have caused the

government and the residents of this nation a colossal amount

of money to protect and prevent. Over the years the government

has spent recurrently over fifty billion Naira annually in

providing facilities, resources and intellectuals that will assist in

curbing this peril. The endemic and persuasive aspect of this

crime is that in the opinion of Myrem and Garcoa (1989:130), it

presents special legal problems, complicated accounting and

auditing problems.

Financial and Economic Crimes, usually called white-

collar crime according to EFCC information book 1, is

widespread in the Nigeria system, they are characterized by

deceit, concealment or violation of trust, and are not dependent

upon the application or threat of physical force or violation.

Individual commit such acts and organizations in order to

obtain personal and business advantage. Criminal activities

such as corporate fraud, health care fraud, mortgage fraud,

identity theft, insurance fraud and money laundering are

critical and sophistical to handle and control. As a result of

their Economic and Financial Crimes Commission (EFCC)

whose mission is to oversee the investigation of financial fraud

and economic irregularities against individuals, corporate

bodies and national communities?

2.1 ORIGIN OF ECONOMIC AND FINANCIAL CRIMES COMMISSION (EFCC). The Economic and Financial Crimes Commission (EFCC)

was established in 2002 by an Act of the National Assembly,

which was amended in 2004. The conception of the commission

was borne out of the determination of the federal government to

sanitize the Nigeria economic environment by enforcing all

economic and financial crimes law (EFCC information Book 1).

Prior to the set up of the EFCC, Economic and Financial

Crime constituted a great challenge to the Nigeria economy and

its image profile. Before now the country has become a domicile

for economic and financial crimes perpetrators. Corruptions,

lack of accountability, economic mismanagement and

fraudulent activities have been the irritation of the economy.

The establishment of EFCC Act was therefore a major

department from the past enabling laws for fighting economic

and financial crimes, in terms of power, functions and duties.

The commission has a high level support from the presidency,

the legislature and other key securities and law enforcement

agencies in Nigeria. To carryout their functions effectively,

EFCC is embodies with several units.

They include:

• Office of the executive chairman.

• Office of the commission secretary.

• Director organization support.

• Zonal offices.

• Operational units.

• Financial and Account Unit.

• Human resource Unit.

• External co-operational Units.

• Media and publicity.

• Information, communication and Telecommunication unit.

• Nigeria Financial Intelligent unit (NFIU).

• Inspectorate directorate/servicemen unit.

• Training and research institutes.

2.1.1 ECONOMIC AND FINANCIAL CRIMES.

Economic crimes relate to default in the distribution of

income and wealth in the economy. Financial crimes also relate

to default but in the area of providing and managing funds for

economic activities. Several ways or methods through which

economic and financial crimes can be committed in the

economy are: abuse of office, manipulation of records,

misappropriation or diversion of funds, over invoicing, bribery of

government officials, false declarations, unconventional and

fraudulent trade practices, Kick-backs (i.e. percentage payment

made to somebody who has enabled one to make money),

fraudulent award of contracts, money laundering, tax fraud,

establishing “dummy companies”, establishing real companies

using another person’s name or secret name, transferring stolen

monies abroad either through bank transfers or by physically

carrying foreign exchange abroad through the airports etc.

2.1.2 CAUSES OF ECONOMIC AND FINANCIAL CRIMES.

(1) Political Instability: when there is constant change in

government, there is tendency that officials in public sector will

indulge in financial crimes to their own betterments since the

change will result in new accounts being giving and hence, any

crime committed can be effectively hidden or concealed:

(2) Corrupt Officials in the Economy: When the officials

working in the Public and private sectors are corrupt, dishonest

practices become the order of the day. For instance, offering

and accepting of bribes can make an official to disclose or hide

vital information or records.

(3) Greed: When one’s quest for wealth is insatiable, there is a

strong desire for more wealth than is right or reasonable and

this can make the person to resort to financial or economic

crime.

(4) Selfish Motive: A selfish person thinks chiefly of and is

interested in his or her own personal needs and welfare without

care for others. This makes the person to commit financial

crimes to the detriment of others.

(5) Inadequate Salary Structure: When officials are paid below

standard, they are tempted to commit financial crimes so as to

increase their source of livelihood. Delay in payment can also

lead one to commit financial crimes.

(6) Corruption: The influence of corruption has taken over the

control of the nation. It rules our lives as it were and has

become the major consideration on the governance of our affairs

as a people. This makes it easy for people to indulge in

economic and financial crimes as it is now the order of the day.

2.1.3 EFFECTS/CONSEQUENCENCES OF ECONOMIC AND FINANCIAL CRIMES.

In general, economic and financial crimes have a negative

consequence on the economy. These are highlights on some of

the major consequences:

• It decreases foreign direct investment in the country as

foreigner’s faith in the country is at its minimum.

• It daints the national image and hence reduces the respect

people has for the nation.

• It reduces public spending on essential basic social amenities

like education and health.

• It is politically destabilizing.

• It paves way for inadequate and decaying infrastructure.

• It leads to lack of effective co-ordination across levels of

government.

• It impacts negative on economic growth.

• It hinders development.

• It promotes corruption in the society.

• It encourages officials to be non-challant in the performance

of duties.

• It causes increase misery, hunger and insecurity in the

country.

2.2 POWER OF EFCC IN CONTROLLING CRIME.

According to the EFCC Handbook information 1, the

commission has the power to:

• Cause investigation to be conducted as to whether anybody

has committed an offence under the Act.

• It can also investigate whether anyone is in the process of

committing offences under the Act.

• Investigate the properties of any person if it appears to the

commission that the person’s lifestyle and extent to the

properties are not justified by his source of income.

• The commission is also charged w0ith the responsibility of

enforcing the previous of the following laws:

(1) The Advance fee fraud and other related offences Acts 1995

as amended.

(2) The failed banks (Recovery of Debts) and financial

malpractices in Banks Act 1994 as amended.

(3) Miscellaneous offences Act (cap. 401: LFN).

(4) Any other law or regulations relating to economic and

financial crimes including the criminal code and penal code.

2.2.1 MANDATES OF THE COMMISSION.

EFCC is bestowed with the responsibility of investigating and

the enforcement of all laws against economic and financial

crimes in all its ramifications. The following are the major

functions and mandates set out in the enabling Act according to

EFCC information Handbook 2;

• Enforcement and due administration of the provision of the

Act.

• Investigation of all financial crimes such as Advance fee fraud

(known as 419) counterfeiting, money laundering illegal charge

transfers, capital market fraud, fraudulent encashment of

negotiable instruments or fraudulent diversion of funds,

issuance of dud cheques, forgery of0 financial instruments,

computer credit card fraud, contract scam, corporate fraud

such as Accounting scheme, self-dealing, obstruction of justice

to conceal illegal activities from criminal and regulatory

authorities etc.

• Dealing with matters connected with extradition, deportation

and manual legal or other assistance between Nigeria and any

other country involving economic and financial crimes.

• Adoption of measures to identity, trace, freeze, confiscate, or

seize proceeds derived from terrorist activities, economic and

financial crimes related offences, or the properties, the value of

which correspond to such proceeds.

• Determination of the extent of financial loss and such other

losses by government, private individuals or organization.

• Adoption of measures to eradicate and prevent the

commission of economic and financial crimes with a view to

identifying individuals, corporate bodies or groups involved.

• Collaboration with government bodies within and outside

Nigeria in carrying out the functions wholly or in part with

those of the commission.

2.3 MATTERS EFCC INVESTIGATE.

The matters EFCC investigate are mainly in the areas of

financial frauds and also to facilitate the forfeiture of assets

from those engaging in federal or state crimes. They include:

• Banking Fraud: The mission of this section is to identify,

target, disrupt and dismantle, criminal organization and

individuals engaged in fraud schemes, which targets our

nation’s financial institutions. It mainly investigates cases

involving banks and other financial institutions i.e frauds in

Banks. Example, issuance of Dud cheques, fraudulent

encashment of negotiable instruments, foreign exchange

malpractices and other financial institutions.

• Government Fraud: In this section, EFCC deals with cases

that have flare with good governance, transparency and

accountability. It is also however, investigates cases ranging

from abuse of public office, official corruption, bribery of

government officials diversion of public funds through

fraudulent award of contracts, corruption in land allocation, tax

fraud, capital market fraud, money laundering, oil bunking etc.

• Advance Fee Fraud: This aspect of fraud is prevalent in the

system and it is commonly called “419”. The commission

investigates cases of advance fee fraud, that is obtaining false

practice through difference fraudulent schemes, example, credit

card scam, inheritance scam, contract scam, job scam, lottery

scam, wash scam (money washing scam), marriage scam,

immigration scam counteracting, religious scam. More so, the

commission also investigates cases of cyber crime which is

mutably undertaken in cyber café either by the operators or

their customers within the nation.

2.4 CAPITAL MARKET FRAUD.

The Nigerian Capital Market - A financial market is made

up of series of arrangement, institutions, facilities and

processes that facilitate the exchange of funds between the

suppliers of such funds (Lenders and investors) and users of

the funds (government, corporate bodies and individuals).

The capital market is one of the segments of the financial

market. The other segments of the financial market include the

money market and insurance market.

The duration of the lending/borrowing arrangement and

the nature of the instrument/product used, determines the

classification of a financial transaction as either a money

market or capital market activity. The money market is a

market where funds for short-term purpose (usually between a

day and one year) are sourced, while the capital market is a

market where funds for medium long-term purposes (usually

above one year and upwards) are sourced.

The capital market is divided into two segments:

i. The primary market and

ii. The secondary market.

The primary market is a market for raising fresh/new funds

from the investing public, while the secondary market is a

market for trading in financial instruments/products previously

issued in the primary market.

Roles of the Nigerian Capital Market.

The Nigerian capital market plays an important role in the

development of the Nigerian economy. Some of the roles that

the capital market performs are as follows:

It provides opportunities for companies to borrow funds

needed for long- term investment purposes.

It provides avenue for the marketing of shares and other

securities in order to raise fresh funds for expansion of

operations, leading to increase in output/productivity.

It provides facilities that enable foreign business to offer

their shares to the Nigerian capital market. In order words,

the Nigerian public has the opportunity to invest and

participate in the ownership of foreign business.

It also encourages inflow of foreign capital when foreign

companies or investors invest in domestic securities.

It provides opportunities for government to finance

projects aimed at providing essential amenities for socio-

economic development.

Government can also use the capital market to carry out

its privatization exercise by offering its shareholdings in

state owned enterprises to members of the public through

the stock exchange.

Through its allocative mechanism, the capital market

ensures on efficient and affective distribution of scarce

resources for optimal benefit to the economy.

It provides employment opportunities for the ever-growing

labour force.

It encourages transparency and good

accounting/management practices, by ensuring that

companies disclose relevant and adequate information to

enable potential investors and shareholders make well

informed decision.

It creates an avenue for the populace to participate. In the

corporate sector of the economy and share in its wealth

through ownership of securities.

It reduces the over-relevance on short-term financing for

long-term projects.

It provides the need seed money for venture capital

development which could serve as a vehicle for industrial

development.

The capital market provides facilities and regulates unit

trusts which can be used by small savers to access fund in

the market for investment.

The capital market through its activities also provides

opportunities for community saving like Isusu, Adashe,

and Ajo etc.

Prospect of the Nigeria Capital Market.

The Nigerian stock market has the capacity to continue to

provide avenues for government and corporate entities to

effect optimal financial and capital base broadening. Such

sound financial services will no doubt serve as hedge

against the vagaries of business and economic cycles,

which have in recent time shaken the basic fabrics of our

national economy.

The capital market, as the citadel of the private sector, is a

network of institution that can render such services

capable of revamping a nation’s economy. But for it to

render such services with optimal efficiency, the

assistance of government is needed in the area of fiscal

policies and provision of efficient infrastructure,

telecommunications and investment incentives. No capital

market institutions works in isolation, for the entire

system to function properly. Fiscal policies and incentives

that can stimulate both investors and users of long-term

funds.

It is no exaggeration to say that in modern industrial

society like ours, which recognizes the rights to private

ownership of capital, the capital market provides the right

sign posts that serve as economic indicators and a means

through which the needed economic development and

recovery can be achieved.

Capital market instruments and institutions help to

support national growth and development. Capital

markets should therefore be accorded pride of place in

national economic development programmes.

Challenges of the Nigeria Capital Market.

• Increasing the level of market awareness: The level of

capital market awareness in the country is as low as many

Nigerians are still very much uninformed about this arm of the

financial market. The SEC has been making a lot of effort in

this regard through its series of investor education programmes

such as state enlightenment programmes, specialized deck in

ensuring that the awareness level is greatly improved. It will

require the use of government machinery and Non-Government

organizations (NGOs) to carry out the awareness campaign to

the level required. State chambers of commerce, in collaboration

with their respective ministry of commerce and industry will

need to collaborate for programmes that will be specifically

tailored to encourage and their respective communities to be

active participants in the capital market.

• Formulation of appropriate economic policies and

sustenance of political stability: The reform of the Nigerian

economy will be predicated on a number of factors, among

which are the formulations of capital market-friendly policies

that include tax and other incentives to investors and other

participants on the market. These will help promote a strong

private sectored economy as envisaged by NEEDS to contribute

to low unemployment level, low inflation rate and stable

exchange rate.

• Bolstering the return of flight capital: Capital flight is an

indication of a “vote of no confidence” in an economy. Capital is

often said “knows no boundary”, and will flow only to an

economy which offers certain attractions including safety of

investment, good return on investment etc. foreign investors

and Nigerian in the Diaspora must be encouraged to invest in

the Nigerian capital market. Information on the Nigerian capital

market must be available on regular basis to the above groups

to stimulate their interest and propel them to invest.

• Improving the Liquidity Level of the Market: Among the

biggest challenges of the Nigerian capital market is the creation

of a highly liquid market in which investors can buy and sell

with relative ease, and large transaction are consummated

without significant changes in prices. This becomes necessary

given the backdrop that will informed investors generally

consider the level of a market’s liquidity before investigating in

such a market. They will only consider a market, which

provides ease of entry and exit. To a large extent, the changes

that have taken place in the stock market in recent years have

improved the standing of the capital market.

• Deepening of the market and the introduction of new products

such as derivatives and better legal framework are priorities of

the market. This is also being implemented by efforts to provide

more and better facilities.

The financial crimes section of federal bureau of investigation

(FBI) in USA called it “Corporate Fraud”. The corporate fraud

case pursued by this unit involves accounting schemes, self-

dealing by corporate executives and obstruction of justice to

conceal illegal activities from criminal and regulatory

authorities. The majority from criminal and regulatory

authorities. The majority of cases pursued by the commission

include accounting schemes designed to deceive investors and

analyst about the true financial condition of a corporation (i.e.

Company), through the manipulation of financial data, the

share price of a company remains artificially inflated based on

fictitious performance indicators provided to the investing

public. To achieve this, the corporate fraud perpetrators involve

the following activities:

• Falsification of Financial Information: False account

entries, bogus trades designed to inflate profit or hide losses

and false transaction designed to evade regulatory over sight.

• Self-dealing by Corporate Insiders: Includes insiders

trading, kickbacks, and misuse of corporate properties for

personal gain individual tax violations related to self-dealing.

• Obstruction of Justice Designed to Conceal Illegal

Activities: Particularly when the obstruction impedes the

inquiries of the Securities and Exchange Commission (SEC)

other regulatory agencies, and/or law enforcement agencies.

The commission has placed greater emphasis on investigating

allegations of these frauds by collaboration and partnering with

some agencies to capitalize on their expertise in specific areas

such as securities, fax, pensions, energy and commodities.

These agencies contribute significant personnel, resource and

technical expertise to corporate and securities fraud

investigations.

• Terrorism: Over the years, issues on terrorism and terrorist

activities have dominated the front page pf most newspapers

and have been the headline of TV stations around the globe.

Due to the intense danger and wreckage terrorist activities pose

to the world and with the 11th September, 2001 terrorist attack

on world trade center (WTC) New York USA experience. The

commission strategically located an Anti-Terrorism unit (ATU)

in the office of the executive chairman as a special unit saddled

with the sole responsibility of investigating and combating

terrorism and terrorist tendencies within the technique feasibly

employed by the ATU to carry out her responsibility is both

proactive and reactive. It plans to mobilize and activate its

intelligence gathering capability to detect and monitor funds

being channeled to suspected terrorist or terrorist organizations

to enable the commission deal with situation appropriately

before the advent of terrorist strikes. The ATU also plans

strategically to develop the necessary national preparedness to

deal with terrorist activities during and after the advent and

thus undertaking an effective postmortem of their plans and

strategies which enables them to trace and deal with any

observable patter and sequence that present possibility of re-

occurrence.

2.5 EFCC AND OTHER ARMS.

Upon the mandate of EFCC to sanitize the Nigeria economic

environment by way of enforcing all financial and economic

laws, there are some other arms within and outside the

commission that are set up with a tangential responsibility.

They are:

• Nigeria Financial Intelligence Unit (NFIU): As part of its

effort to combat money laundering and the financing of terrorist

activities in Nigeria, NFIU domiciled in EFCC was set up by

federal government. This is a pre-condition for the removal of

Nigeria from the financial Action Task force (FATF) list of non-

cooperation countries and Territories (NCCTS). NFIU is an

autonomous central national agency saddled with the

responsibility to receive and analyze financial information.

• Transaction Report (STRs): From financial institutions and

designated non-financial institutions with a view to

disseminating intelligence information arising thereof to law

enforcement agencies (LEAs) and other stakeholders. The unit is

composed of 10 man technical committee from CBN, NDIC, the

private sector, a policy officer, together with an employee of

EFCC.

• The Independent Corrupt Practices Commission (ICPC): Prior

to the year 2003, the country has been living with the stigma of

being the most corrupt nation in the world as adjudged by the

World Transparency board, due to the level of corruption in

Nigeria especially in the public sector. As a result of this

menace, federal government established ICPC in 2000 to

checkmate, investigate and combat the ugly trend of bribery

and corruption within the civil and public service, but it is

limited in time to offences committed from 2000. ICPC is not

empowered legally to prosecute investigated matters.

2.6 CONSTRAINTS FACED BY EFCC IN CURBING FRAUD IN NIGERIA.

Over time, the commission has been faced with some

complex, complicated and perennial problems in detecting and

curbing financial fraud in private and public sector. These

constraints did not culminate due to her ineffectiveness or

malfunctioning in discharge of her oversight functions, but due

to some technicalities in administration of criminal prosecution

and emphasis on prosecution of economic crime. The following

are the special areas the commission encounter handles in

curbing fraud in Nigeria.

• Accounting constraints.

• Legal constraints.

• ACCOUNTING CONSTRAINTS.

Accounting is the process of recording and interpretation of

financial transactions while auditing entails the analysis of

these records, the preparation of summary statement based on

the analysis and certification that the summary statement

presents an accurate picture of the financial activities.

Adeniyi A.A (2004: 1) views auditing as “the independent

examination of an expression of opinion on, the financial

statements of an enterprise by an appointed auditor in

pursuance of the appointment and in compliance with any

relevant statutory obligation”.

Accountants and auditors are accustomed to preparing

materials for use in wide varieties of administrative and civil

legal proceedings, but not all of these materials which

concerned alleged violation of law. Before now, these

professionals are not often involved in investigation or viewing

towards criminal prosecutions, but their involvement is

heighten with the recent emphasis on prosecution of economic

fraud.

Investigation of economic crimes and frauds are not the

primary object of an auditor or an accountant because they are

not usually familiar with the procedure for obtaining and safe

guarding evidence in a manner that will ensure its admissibility

at later criminal trials. Even auditors in the public sector are

not tutelaged to noting when a witness in a custodial situation

becomes a suspected criminal violator and at that moment

administering warming. They also may not be witty of how

much more evidence must be obtained in criminal cases to meet

the burden of proof that is necessary to prove some elements of

a civil case by a significance of the evidence or even by vivid and

convincing evidence.

Criminal investigators, on the other hand are not usually

equipped and skilled as the accountants or auditors in

discovering and documenting the paper trials driven to and

from every financial transaction. They (ie Criminal investigators)

also lack pre-requisite knowledge or documenting violation of

civil and administrative regulative that may carry a sanction

more effective in charging a cause of activity than would any

criminal penalty provided. Though an office of Inspector General

has been set up in almost every major federal department since

1970 and pr-existing separated accounting/auditing units and

criminal investigation units frequently put together in that office

to monitor and curb fraud in public sector, but all these have

suffered irreconcilable conflict without the possibility of

separating them, often times we have heard

Auditors/Accountants say that their required new

concentration on criminal fraud as opposed to their primary

objects has set their profession back. Criminal investigators on

the other hand find themselves in undaunted with documents

that will bury them for years if brought for prosecution.

• LEGAL CONSTRAINTS.

Investigators, be it accountants, auditors or specialized

expert working on financial and economic crimes must deal

with a very complex and complicated area of the law, both

criminal and civil. On the criminal prosecuting understanding

and differentiating among such concept as larceny by tricks,

fraud, embezzlement, items of value by false pretence have

beleaguered generations of law advocates. Some status have

attempted to modify and simplify this area of the law by

amalgamating these offences into a single offence of “theft”, but

the interpretation of these status has been an issue to the

courts. In addition, there has been other status, which

prescribed, different kinds of frauds in a varied and complicated

way.

Evidence, it is observed that most of the significant law is

civil, if violated can amount to civil penalties and as well

criminal sanctions such areas as insurance law, corporate law,

real estate, false advertising and securities to which most

criminal investigation are never unveiled. Though they are

frequently alternatives to criminal prosecution, civil remedies

that are administrative or regulatory. One of which is the

injunction against future unreasonable conduct.

Furthermore, there is no status in the criminal code that

defined “Economic Crime”, and as a result, wherever a criminal

prosecution is sought, it becomes difficult to frame the charges

adequately, and the onus lies in the discretion of the presiding

judge. It is in line with this that EFCC was set up to deliberate

on this issue and frames the charge suitably to various

offences.

According to Mohammed (2004:4), the economic and

financial crime commission is established by the EFCC Act of

2003 as a body corporate to enforce and administer the

provision of the Act. It is a designated financial intelligent unit

in Nigeria with the power to co-ordinate the various institutions

involved in the fight against money laundering and enforcement

of all laws dealing with financial and economic crimes in

Nigeria.

Also, it is stated in the EFCC Act (2003), those commision’s

broad statutory duties and responsibilities covers dealings with

economic and financial crimes and combating as well as

terrorist and terrorist tendencies. But all these development

and improvement in identifying, detecting, investigating and

prosecuting economic crimes still envisaged some legal

constraints in effective discharge of her mandate.

2.7 ACHIEVEMENTS OF EFCC

The existence of EFCC through the EFCC establishment

Act of 2004 has overwhelmingly help the process of involving a

Nigeria philosophy that shed off the miasma around our image

and aspiration as a people and a nation. As part of her

mandate, EFCC has recorded a little success especially in

restoring accountability, integrity, transparency and

consciousness in public resources stewardship. According to

Mallam Nuhu Ribadu, the former executive chairman, EFCC

during paper presentation to the senate on 27 September,

2066, he said “for us at the Economic and Financial Crime

Commission (EFCC), we never lose sense of perspective that

over mandate derived from this chamber, and that we are

agents of the vision you constructed which is to promote a

policy platform of accountability and transparency. He went on

and said, “Today, I stand confidently before you to announce

that among our little success to date, the commission can boast

of the following achievements in the implementation of its

preventive and prosecution mandate.

Petitions received 4324; cases under investigation 2103;

cases under prosecution 306; arrest more than 2000; properties

recovered-several houses, land, luxury cars, airplanes and oil

tankers, value of assets and cash received and 5 billion dollars;

number of convictions 88. Among these successes and

achievements, the public sector has tremendously benefited

from it. Recently we have witness the arraignment of and

prosecution of some ex-governors and other government

officials over misappropriation and embezzlement of public fund

and allegedly diversion of public funds.

According to EFCC public relation officer, the arraigned ex-

governors are:

1. Saminu Turaki - Jigawa State

2. Orji Uzor Kalu - Abia State

3. Dr. Chimaroke Nnamani - Enugu State

4. Nyame Jolly - Taraba State

5. Diepreye Alarneiyeseigha - Bayelsa State

Their count charges are:

• Dr. Chimaroke Nnamani (Enugu State) faces 105 count

charges over alleged N5.4 billion graft.

• Nyame Jolly (Taraba State) faces 41 count charges over

alleged Ni .6 billion stolen from the treasure of his states

according to EFCC, he stole the money between January 2005

and May 2007 through: inflation of contract, kickbacks, funding

of non-existing projects and outright diversion of public funds.

• Turaki Saminu (Jigawa State) faces 32 count charges of

welfare of his people.

• Orji Uzor Kalu (Abia State) faces 107 count charges of money

laundering offences.

• Diepreye Alarnieyeseigha (Bayelsa State) has been under the

custody of EFCC after his impeachment as governor in 2005

over alleged money laundering in London. It was reported that a

London metropolitan police has consequently arraigned him

before to a London court, but upon securing bail, he absconded

to Nigeria where EFCC arrested and formally brought him to a

court in Nigeria. On 2005, he was convicted and imprisoned for

two years term in jail.

On July, 22nd 2007, Jolly Nyame of Taraba State accepted

before a federal high court sitting in Abuja to return all loot

(Vanguard 1 & 15). The trails of these ex-governors are still on,

on different high courts in the federation. And EFCC still

maintained her ground that anyone found to have abused the

trust of Nigerians would be brought to book, no matter who

he/she is and how long it takes.

Furthermore, EFCC is also filling charges against persons

indicted by a comprehensive investigation carried out by the

commission over mismanagement of petroleum and technology

development fund, PTDF, among which is the ex-vice president

of the federal republic of Nigeria Atiku Abubakar, is involved.

For substantial evidence and fails, the commission visited the

office of the Bank PHB on November, 2006 in order to secure

originals of documents relating to the Petroleum and

Technology Development Fund (PTDF) abuses.

Within three years of her existence, EFCC has played a

significant and indelible role in detecting and controlling frauds

not only in Nigeria public sectors but also in Nigeria as a whole.

We anticipate that they should be consolidated and make more

efficient to make Nigeria a crime free nation and a voice in

global security tendencies.

EFCC has continue its slaught against sacked Former

Managing Directors of Banks in Nigeria as may 5” 2011 filled a

28 count charge against Former boss of Intercontinental Bank

Plc, Erastus Akingbola, his wife Anthonia and a long time family

friend Mr. Bayo Dada over alleged N47 billion scam bordering

on alleged money laundering, fraudulent transactions, breach of

public trust and other sundry offences.

The anti-graft agency in taking the decision stated that it

derived legal backing from section 390(7) criminal code cap of

Lagos Laws of 2003 to file the case against the trio in a Lagos

High court in the Ikeja Division.

The first count read “That you Akingbola sometime in

March 2009 stole the sum of 8,540,138.48 (eight million five

hundred and forty thousand, one hundred and thirty eight

pound forty eight pence) property of Intercontinental Bank Plc,

fraudulently converting it to your personal use”.

The second count also read: “That you Akingbola

sometime in June 2009 stole N2000 million property of

Intercontinental Bank Plc converting it to the property of tropics

property a company, which you are a director.

That you Akingbola as CEO of Intercontinental Bank Plc

sometime in March 2009 stole the sum of N2 billion, Ni 08

million, one hundred and thirty five thousand, four hundred

and eighty four sixty kobo, property of Intercontinental Bank

Plc fraudulent converting it to your personal use”.

The anti-graft body had on 3 May 2011 detained the embattled

Former MD and other nine bank chiefs but was granted

administrative bail by the commission but fresh charges were

made against them bordering on money laundering.

The prominent ones among them were Akingbola, Sebastine

Adigwe Former CEO of Afribank and Okey Nwosa of FinBank

Plc and the others that were not named.

The trio of Akingbola, Adigwe and Nwose, eight other ex-

executive directors were interrogated over fresh information of

stealing of depositors funds while they held sway at the named

Banks.

Aside the wife of Akingbola wife of former Managing

Director of BankPHB Mrs. Elizabeth Atuche was arrested by the

EFCC for allegedly using her company to launder over Ni 00

billion of depositors fund.

Indication emerged on 5th May, 2011 that all contracts may

come under the watchful radar of the Economic and Financial

Crimes Commission (EFCC) as it lamented that contracts

executed in the country does not reflect on the lives of

Nigerians, calling for the experts to monitor implementation and

advice government on policies and projects.

Chairman of the Commission Farida Waziri who was said

to have spoken in Lagos while addressing members of the

Nigeria-British chamber of Commerce at a breakfast meeting

said the move will help stem the trend in which contracts do not

reflect on the lives of the people.

The EFCC boss also called for a drastic reduction in

Jumbo salaries enjoyed by public office holders adding that the

issue of human rights should be down played if the commission

is to make a success of its fight against corruption in Nigeria.

According to a statement from Head, media and publicity

unit of EFCC, Femi Babafemi, Waziri told the meeting that “the

present scenario of award of huge contracts without a

corresponding positive impact on the economy does not suggest

effective and efficient implementation”. She said the think-tank

when constituted should have the power to recommend the

sacking of any erring official even as she lamented that the

abuse of public trust by senior public officials was a major

drawback in the development efforts of the nation.

“The prevention of primitive acquisition of public wealth

for private use is therefore a major challenge which the EFCC is

addressing. In the case investigated by the commission a late

senior independent National Electoral Commission (INEC)

official stole Ni .2billion while another official in an on going

case stole over N6.4billion, most of them proceed of contract of

works that had been fully paid for yet not executed”.

Mrs. Waziri equally called for the downward review of the

allowances and other perks of public office holders to make

public office unattractive nothing that “The jumbo salaries and

allowances presently earned by certain politicians cannot be

justified and must be discontinued.

The Commission (EFCC) achieved by enthroning a regime

of respect for Rule of Law and creating an investment friendly

environment for the financial and industrial sectors of the

economy noting however that the EFCC has been effective in an

otherwise hostile environment replate with failure of

institutions.

They also improved public consciousness about corruption

issues generated through the vehicle of the Anti-corruption

Revolution campaign ANCOR; a public/civil society partnership

initiative designed to help the people take ownership of the anti-

graft campaign.

REFERENCES

Ajaro, C. (2004): In the Eyes of EFCC, Newswatch computer; Communication Centre.

Dariye, Nyame Join Kalu, Turaki, in Prison, Vanguard, vol. 23 No 60374, front page & P. 15. Economic and Financial Crimes Commission EFCC (2004):

Information Handbook 1, Jexcel Commercial and securities Printers; EFCC, Pp 1-5.

EFCC Establishment Act, 2004. EFCC Money laundering and prohibition Act, (2004). Egbebor, A. (2005): Corruption Has Destabilized Our Society,

Ventral Press and Printing Ibrahim. Federal bureau of investigation FBI, (2006): Financial and

Economic Crimes, FBI, www.google.com. Howared, S. et al (2005): Techniques and strategies for Detection

of Fraud: John Wely & Sons, Inc. Hoboker, New Jersey. I’m ready to return loot, (2007): Vanguard, Vol. 23: No 6, July,

23 front page & p. 15. Idika, C.O and et al (2001): Anti-Corruption Advocacy Handbook

(fix Nigeria initiative), Talab Global view Ltd. Koletar, J.W. (2003): Fraud Exposed: John Wiley & Sons, mc;

Hoboker, New Jersey. Nigeria Financial Intelligent unit information Handbook: (2007):

“Public Service Corruption, The New Offensive”, journal of EFCC (Zero tolerance) Jan. 3, vol. 1 No. 3.

Onyesanya, (2004): A Performance Review of EFCC and NCNF, www.nigeriavillaeaguar.com

Oxford Dictionary, Advanced learning Dictionary, 6th Edition. Ribadu, N.M (2006), Interim Investigation Report on Cases of

Financial Misappropriation and money laundering against some States and local government, presentation of Senate; Pp 1-2.

Richard, A. & et al (1989): Investigation for Determination of

facts, New York; MC Graw Hills. The Nigeria Capital Market; Developments, Investment Options,

Players, Prospects, Challenges, produced by Research and Market Dev. Dept (SEC).

CHAPTER THREE

RESEARCH METHODOLOGY

This chapter will be looking at the various procedures,

techniques and methods adopted in the study. They include:

3.1 RESEARCH DESIGN

The mechanism adopted fro the planning and

implementation of this scientific study consists of questionnaire

and interview, the technique of data collection is the use of both

primary and secondary sources of data, statistical instrument

in data analysis and interpretation. The exploration of survey

through personal interview (i.e. face to face) enhance the

gathering of significant information on areas which otherwise

could not have been gathered through the use of questionnaire

only.

The design also involves investigation method in obtaining

data especially those that uncover the detecting and control of

financial and economic fraud prior and after the crime has been

committed.

3.2 AREA OF RESEARCH

This research inquiry tends to evaluate the contribution of

EFCC in promoting financial accountability and transparency in

Nigeria, is based on some selected ministries like NEPA i.e

PHCN, Federal Government secretariat in Enugu, office of the

Accountant general, Enugu state and some strategic unit of

EFCC in Lagos and Enugu zonal offices.

3.3 POPULATION AND SAMPLE SIZE

The population of this study is limited to one hundred and

twenty persons (120) selected from EFCC headquarters Lagos

and Enugu Zonal office. Lagos has fifty-five (55) persons; Enugu

has forty (40) persons and National Electric Power Authority,

Currently known as PHCN has twenty-five (25). The selection is

to enable the researcher obtain a good number of sample that

will produce adequate and valid information for the study.

Having taken the population of the study to be (120), the

researcher will employ a formulae propounded by Yare Yamane

to determine her sample size and the number of the question to

be administered to the selected sample.

n = N 1+Ne2.

Where n = the desired sample size

N = the Population i.e. 120 persons

1 = mathematical constant

e = margin of acceptable or allowable error

i.e. 1 --90%

1 90% i.e. 1 — 0.9 0.1

Substitute:

120 n = 1+120(0.1)

= 54.54

= 55 approximately

Since the sample size (n) is fifty-five (55) persons it means

that a total number of 55 questionnaires will be administered to

the selected sample.

TABLE 3.1 POPULATION SCHEDULE

S/NO NAME OF ORGANIZATION NO. OF POPULATION

1. EFCC Lagos Office 55

2 EFCC Enugu Office 40

3. NEPA (PHCN) 25

TOTAL 120

Source: Field Survey, 2011.

TABLE 3.2

THE NUMBER OF QUESTIONNAIRE IN THE SAMPLE SIZE AND THEIR RESPONDENTS

S/NO GROUP NO. OF POPULATION SAMPLE SIZE NO. OF SAMPLE (%)

1. EFCC Lagos Office

55 20 46

2 EFCC Enugu Office

40 15 33

3. NEPA (PHCN)

25 20 21

TOTAL 120 55 100

Source: Field Survey, 2011.

TABLE 3.3

The number of questionnaires distributed to selected staff

of the different groups;

S/NO GROUP DISTRIBUTED NO. OF SAMPLE (%)

1 EFCC Lagos Office 20 46

2. EFCC Enugu Office 15 33

3. NEPA (PHCN) 20 21

TOTAL 55 100

Source: Field Survey, 2011.

3.4 RESEARCH INSTRUMENTATION FOR DATA COLLECTION

The overriding techniques of investigation often adopted

were the oral interview and a well constructed questionnaire.

The researcher’s investigation (instrument) and analysis,

however, was principally based on questionnaires administered

by her respondents.

The questionnaires were structured in a way that will

enable the researcher collect as much primary data as possible

from the respondents. The questionnaires were mostly

administered more than any other research instruments.

Respondents are free to express their own opinion and views to

these questionnaires.

The question is an open-ended questions which is well

structured and comprises of “Yes” or “No” form. It involved

selecting whereas the open-ended question provides

respondents discretion to answer in their own opinion and

ideas.

A total number of fifty-five (55) questionnaires were

administered as regard to the number of sample size and for the

purpose of the research study.

3.5 METHOD OF DATA COLLECTION

The instrument was administered personally by the

researcher with the aid of some research assistant in these

pertinent sections (offices) of people in the selected group of this

study.

Apart from the instrument for primary data collection the

researcher also employed some already made materials in form

of secondary data like:

- Published and unpublished articles

- Published textbooks

- Magazines and newspapers

- Information from internet

- Journals; etc

3.6 METHOD OF DATA ANALYSIS

The data collection were analyzed by the use of chi—square

test, a non- parametric test. The adoption of chi-square test

techniques is appropriate because it enables the researcher to

test the hypothesis if three distributions which come from the

same population of our study and also because our data was

based on classification rather that measurement. Formular for

calculating chi-square test is

X2 (f0 fe))2 or (oi ei)2 Fe ei

Where X2 = chi-square tests

Fo = Frequency observed

Fe = Frequency expected

= Summation

From the above, if the X2 is less than (<) the critical value,

we conclude that the observed frequency do not differ

significant from the expected frequency. However, if the

calculated is greater than (>) the critical value, we will reject the

null hypothesis (Ho) and accept the alternative. In this

situation, we would conclude that the expected frequencies

differ significantly from the calculated frequency.

USING DECISION RULE

Accept Hi if X2 calculated < critical value or

Reject Ho if otherwise.

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.1 DATA PRESENTATION

The aim of this chapter is to present, analyze and interpret

all data collected in this research work. The responses obtained

from the questionnaire by the respondents in this work have

been analyzed, using tables, frequency and sample percentage.

Each research question is presented and processed

immediately by a table showing the responses of all the

questions that aimed at answering the research questions were

asked and some were analyzed in this chapter.

RESEARCH QUESTION 1

How has EFCC carrying out her mandate and function?

TABLE 4.1 RESPONSE

OPTON GROUP RESPONSES TOTAL PERCENTAGE

EFCC Lagos

EFCC Enugu

NEPA PHCN

Effective 15 11 5 31 56

Ineffectively 5 4 15 24 44

TOTAL 20 15 20 55 100

Source: Field Survey, 2011.

From the table 4.1, 56% agreed that EFCC has been

carrying out her functions effectively, 44% were on a contrary

view, reasons being that there have been cases of officers to be

prosecuted. Based on this, one can deduce that the commission

has been effective in the execution of her mandates.

RESEARCH QUESTION 2

Have the activities of EFCC reduce financial and economic

crimes in Nigeria.

TABLE 4.2 RESPONSE

OPTON GROUP RESPONSES TOTAL PERCENTAGE

EFCC Lagos

EFCC Enugu

NEPA PHCN

Agreed 17 13 4 34 62

Disagreed 3 2 16 21 38

TOTAL 20 15 20 55 100

Source: Field Survey, 2011.

From 4.2, out of 55 respondents, 62% are of the opinion

that the activities of EFCC has tremendously reduce financial

and economic crimes in Nigeria especially in public sector, their

reason being that EFCC has recently received thousands of

petitions, prosecuted over 306 and has recovered several

properties and cash, and also through her preventive and

prosecution mandates reduces fraud tendencies, 38% of these

population disagreed with the reason that most of the petitions

received have not been tried or let alone investigated. Drawing

from the above, one can assert that the commissions’ activities

have reduced financial and economic crime to some extent.

RESEARCH QUESTION 3

Has EFCC activities benefited both .the public and private

sector in Nigeria?

TABLE 4.3 RESPONSE

OPTON GROUP RESPONSES TOTAL PERCENTAGE

EFCC Lagos

EFCC Enugu

NEPA PHCN

Yes 16 9 8 33 60

No 3 4 10 17 31

No Idea 1 2 2 5 9

TOTAL 20 15 20 55 100

Source: Field Survey, 2011.

The above table depicts that 60% of the population agreed

that EFCC Activities has benefited both the public and private

sector in Nigeria. Some based their view on the recent

arrangement of ex-governors and the acceptance of Jolly Nyame

formal governor of Taraba State, to return loot to his state.

Whereas 31% do not agree with that assertion reason being that

EFCC is being use by the present to fight his political enemies

and they have selective in the pursuer of their mandate 9%

have no ideal. Based on the foregoing, one can draw conclusion

that Nigeria public sector has benefited from activities of the

commission.

RESEARCH QUESTION 4

Has EFCC recorded any success or achievement since its

establishment?

TABLE 4.4 RESPONSE

OPTON GROUP RESPONSES TOTAL PERCENTAGE

EFCC Lagos

EFCC Enugu

NEPA PHCN

YES 20 14 5 39 71

NO - 1 13 14 25

No Idea - - 2 2 4

TOTAL 20 15 20 55 100

Source: Field Survey, 2011.

The table indicates that 71% of the respondents

vehemently agreed that EFCC has recorded some achievements

within the three years of her existence.

Majority of them cited example with the indictment of the

former police Inspector General Tafa Balogun, Diepreye

Alamieyeseigha and other big politicians in the country. While

25% of the respondents hold the opinion that EFCC has not

made any achievement 4% have no Idea whether they have or

not.

Based on this analysis, one can deduce that within a short

period EFCC has made success and achievement especially in

the recent prosecution of ex-government and other top officials

of government.

RESEARCH QUESTIONS 5

Can an EFCC official be held responsible if a case of fraud is

reported without investigation?

TABLE 4.5 RESPONSE

OPTON GROUP RESPONSES TOTAL PERCENTAGE

EFCC Lagos

EFCC Enugu

NEPA PHCN

YES 11 4 5 20 36

NO 9 9 8 26 47

No Idea - 2 7 9 16

TOTAL 20 15 20 55 100

Source: Field Survey, 2011.

The above table shows that 36% respondents said that an

EFCC official could be held responsible if a case of fraud is

reported without investigation, 47% on the other hand disagree

while 16% have no ideal. Drawing inference from the above, we

can conclude that if a case of fraud is reported without

investigation by EFCC official that he may or not be held

responsible to a certain extent.

RESEARCH QUESTION 6

Does government interfere in the operations of EFCC?

TABLE 4.6 RESPONSE

OPTON GROUP RESPONSES TOTAL PERCENTAGE

EFCC Lagos

EFCC Enugu

NEPA PHCN

YES 11 10 14 35 64

NO 9 5 6 20 36

TOTAL 20 15 20 55 100

Source: Field Survey, 2011.

In table 4.6, it is observed that 64% respondents agreed that

government interferes in the operations of EFCC.

Their reason is that the past regime of Obasanjo (1999-

2007) used her to fight his political enemies especially with the

recent selection of ex-governors for arrangements, 36% of the

sample size do not agree that federal government interferes in

the activities of EFCC.

RESEARCH QUESTION 7

How have the Banks in Nigeria assisted EFCC in catching and

investigating fraudsters?

TABLE 4.7 RESPONSE

OPTON GROUP RESPONSES TOTAL PERCENTAGE

EFCC Lagos

EFCC Enugu

NEPA PHCN

Well 2 6 5 13 24

Very well 6 6 5 17 31

Not at all 12 3 10 25 45

TOTAL 20 15 20 55 100

Source: Field Survey, 2011.

From the above table 24% of the respondents are the

opinion that Bank have assisted EFCC “well”, 31% opted for “

Very well” and 45% said “Not at all”. Against this backdrop, one

concludes that the percentage of respondents that said “Not at

all” are up to 50% or more to convince the researcher that

banks are not living up to expectation in this area.

RESEARCH QUESTION 8

Are there many challenges or constraints faced by EFCC in the

discharge of her mandates?

TABLE 4.8 RESPONSE

OPTON GROUP RESPONSES TOTAL PERCENTAGE

EFCC Lagos

EFCC Enugu

NEPA PHCN

YES 20 13 14 47 85

NO - 2 6 8 15

TOTAL 20 15 20 55 100

Source: Field Survey, 2011.

From the above analysis, 85% of the respondents agreed

that there are constraints faced by EFCC in the discharge of her

duties.

According to some, such constraints are:

- Security constraints

- Immunity power enjoyed by some political leaders

- Inadequacies of law enforcement agencies

- Political constraints

- Bribery and Corruption

- Inadequate facilities and technology for crimes detection etc.

15% of the respondents held a contrary view.

4.2 TESTING OF HYPOTHESIS

The research will adopt chi-square distribution method in

testing the hypothesis. This will be used to compare actual

(observed distribution) with a hypothesized (expected

distribution)

Formulae x2 = (0 —E)2

Where X2 = Chi-square test

0 = Observed frequency

E = Expected frequency

= Summation sign

Note that the NULL hypothesis should be tested.

The activities of EFCC cannot enhance financial accountability

and transparency in Nigeria.

Table 4.9 RESPONSE

OPTON GROUP RESPONSES TOTAL PERCENTAGE

EFCC Lagos

EFCC Enugu

NEPA PHCN

Can Enhance 5 7 13 35 64

Cannot 15 8 7 20 36

TOTAL 20 15 20 55 100

Source: Field Survey, 2011.

From the above Null hypothesis, it is observed that 64% of

the total respondents agreed that EFCC activities Can enhance

financial accountability and transparency, 36% opined in the

contrary. Let us apply the X2 to test the hypothesis.

The assumption:

The researcher assumed the level of significance to be 5% (i.e.

0.05).

DECISION RULE

- Accept Ho if the calculated value of X2 is less than the critical

value.

- Otherwise reject Ho.

TABLE 4.10

FREQUENCY TABLE RESPONSE 0 E (0-E) (0-E)2 (0-E)2

E

Can Enhance 37.5 27.5 7.5 56.25 2.0

Cannot Enhance 17.5 27.5 -7.5 56.25 2.0

TOTAL 55 55 0 112.5 4.0

To obtain expected value (e)

E = Sum of frequency No. of Element

E = 55 = 27.5 2

Chi-square test (X2) = 4.0

To determine degree of freedom

Df = (R-1) (C-1)

Where R = Rows

C = Columns

Df = 1

Then the critical value X2 (see chi-square distribution table)

X2 critical value = 3.841

Compare the two values

X2 Critical value = 3.841

X2 Calculated = 4.0

X2 Calculated > X2 critical value

:. 4.0 > 3.841

DECISION RULE:

The researcher will reject the Ho i.e. the activities of EFCC

cannot enhance financial accountability and transparency in

Nigeria”.

The alternative Hi that the activities of EFCC can enhance

financial accountability and transparency in Nigeria, is hereby

accepted. Note that the NULL hypothesis should be tested.

Ho: EFCC as s machinery cannot effectively detect and control

financial and economic irregularities in Nigeria.

TABLE 4.11 RESPONSES

OPTON GROUP RESPONSES TOTAL PERCENTAGE

EFCC Lagos

EFCC Enugu

NEPA PHCN

Can Enhance 5 7 13 35 64

Cannot Enhance 15 8 7 20 36

TOTAL 20 15 20 55 100

Source: Field Survey, 2011.

From the above Null hypothesis, it is observed that 64% of

the total respondents agreed that EFCC activities can effectively

detect and control financial and economic irregularities in

Nigeria, 36% opined in the contrary. Let us apply the X2 to test

the hypothesis

The assumption:

The researcher assumed the level of significance to be 5% (i.e.

0.05)

DECISION RULE

- Accept Ho if the calculated value of X2 is less than the critical

value.

- Otherwise reject Ho.

TABLE 4.12

FREQUENCY TABLE RESPONSE 0 E (0-E) (0-E)2 (0-E)2

E

Can Enhance 37.5 27.5 7.5 56.25 2.0

Cannot Enhance 17.5 27.5 -7.5 56.25 2.0

TOTAL 55 55 0 112.5 4.0

To obtain expected value (e)

E = Sum of frequency No. of Element

E = 55 = 27.5 2

Chi-square test (X2) = 4.0

To determine degree of freedom

Df= (R-1) (C-1)

Where R = Rows C = Columns

Df = 1

Then the critical value of X2 (see chi-square distribution table)

Rows

X2 critical value = 3.841

Compare the two values

X2 Critical value = 3.841

X2 Calculated = 4.0

X2 Calculated > X2 critical value

:. 4.0 >3.841

DECISION RULE:

The researcher will reject the Ho i.e. the activities of EFCC as

machinery cannot effectively detect and control financial and

economic irregularities in Nigeria. The alternative Hi that the

EFCC as machinery can effectively detect and control financial

and economic irregularities in Nigeria, is hereby accepted.

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS

5.1 SUMMARY OF FINDINGS

Basically, the previous chapter is the basis of this study as

it involved testing statistically all relevant findings and data

gathered in arriving at a precise conclusion based on the

responses obtained from the respondents.

From the findings, two hypotheses were tested, the first

hypothesis, Ho (Null) is based on “The activities of EFCC cannot

Enhance Financial Accountability and Transparency in Nigeria”.

Whereas the alternative supports the contrary from the

responses, it is ascertained, when subjected to percentage test

tool in table 4.9 that 36% of the respondents held Null

hypothesis while 64% held the alternative and likewise in

hypothesis two. The summary of the findings and conclusion

revealed that the Null hypothesis was rejected and the

alternative accepted.

Table 4.3 shows that 60% of respondents said “yes” that

EFCC activities has benefited Nigeria public and private sector

as against 40% who believe the contrary.

Also table 4.4 indicates that overwhelming majority of

respondents (71%) agreed that EFCC has recorded successes

and achievement since its establishment within a shorter period

as against the 25% minority who are indifferent.

The researcher’s findings and analysis were based on the data

collected from questionnaires, personal interview and written

materials, EFCC’s handbooks and journals.

5.2 CONCLUSION

Based on the outcome of the test applied to all relevant

data collected and analyzed on each of the hypothesis,

conclusions were drawn. The result of the test confirmed that

EFCC activities have effectively enhanced financial

accountability and transparency and can also detect and

control financial irregularities in Nigeria.

Therefore, against this backdrop, it is pertinent to

conclude this research work that EFCC has contributed

immensely in the enhancement of accountability and

transparency not only in Nigeria but the world at large.

To buttress this point, according to the World Transparency

International, Nigeria has improved from the last rating of the

most corrupt nation in the world by shifting from 2’ to 31( most

corrupt nation; and this is attributable to the tireless fight

against corruption by Economic and Financial Crimes

Commission (EFCC).

5.3 RECOMMENDATIONS

Based on the constraints faced by the commission and the

result of the analysis, the researcher saw the need to attach the

following recommendations, which will assist to improve the

operations of EFCC in enhancing financial accountability and

transparency in Nigeria.

- Developing Intensified Information Technology: To

facilitate and make the operations of the Commission more

easier, there should be improvement in procurement of

information especially by obtaining more computer equipments

and gadgets, servers, mainframe computer workstation.

- Establishing an integrated data network architecture that

will connect all the department as well as zonal offices and also

training center within the context of its information strategies.

- Training of staff: Training and re-training of the commission

staff, agents and partners is very significant because it will help

enhance and develop competency of her staff and raise

management exports that will assist in achieving her pre-

determined goals.

- Health Care Fraud: This is one of the sensitive sectors of

the economy that needs adequate attention by the commission.

Health Care fraud involves altered or fabricated medical bills

and other documents, excessive or unnecessary treatments

billing schemes like: charging for service more expensive than

the one provided, charging for service that were not provided,

duplication charges, false exaggerated medical disability,

collecting multiple policies for the same illness or injury etc. the

large number of patient treatments and complex billing

practices attracts criminals skilled in victimizing people by

Committing fraud. The Nigeria health system can only be free of

these hazards when the commission set up a national initiative

to pursue, investigate and prosecute individuals/corporate

entities perpetrating this fraud. The commission should also

partner with minister of health, NAFDAC, NDLEA and other

partners to rejuvenate the health care system.

- Capacity Building: Capacity building requires

maintenance of vigorous database, which assist in generating

primary data on economic and financial matters. The ability to

capture, process, stores and retrieves data at different locations

including operators in their money and capital market.

Also further investigation should be undertaken especially in

the Banking sector in the area of corporate frauds such as

accounting scheme, self dealing by corporate executives and

obstruction of justice to conceal illegal activities from criminal

and regulatory authorities.

IBLIOGRAPHY

Ajaro, C. (2004): In the Eyes of EFCC, New Swatch Computers;

Communication Centre. Dariye, Nyame Join ,Kalu, Turaki, in Prison, Vanguard, vol. 23

No 60374, front page & P. 15. Economic and Financial Crimes Commission EFCC (2004):

Information Handbook 1, Jexcel Commercial and Securities Printers; EFCC, Pp 1-5.

“EFCC made me cry”, (2007): Journal of EFCC (zero tolerance),

4th April, vol. 1. No4. “On the Run”, Journal of EFCC (zero tolerance, Dec. 2, (2007): vol. 2.

EFCC (2004): Establishment Act.

EFCC (2004): Money Laundering and Prohibition Act.

Egbebor, A. (2005): Corruption Has Destabilized Our Society, Ventral Press and Printing Ibrahim.

Federal Bureau of Investigation FBI, (2006): Financial and

Economic Crimes, FBI, www.google.com. Howared, S. et al (2005): Techniques and strategies for Detection

of Fraud: John Wely & Sons, Inc. Hoboker, New Jersey. Idika, C.O and et al (2001): Anti-Corruption Advocacy Handbook

(fix Nigeria initiative), Talab Global view Ltd. Ise, O.I, I’m ready to return loot, (2007), Vanguard, vol.23: No 6,

July, 23 front Page & P. 15. Koletar, J.W. (2003): Fraud Exposed: John Wiley & Sons, mc;

Hoboker, New Jersey.

Nigeria Financial Intelligent unit information Handbook: (2007): “Public Service Corruption, The New Offensive,” journal of EFCC (Zero tolerance) Jan. 3, vol. 1 No. 3.

Onyesanya, (2004): A Performance Review of EFCC and NCNF,

www.nigeriavillaeaguar.com

Oxford Dictionary, Advanced learning Dictionary, 6 Edition. Ribadu, N.M (2006), Interim Investigation Report on Cases of

Financial Misappropriation and money laundering against some States and local government, presentation of Senate; Pp 1-2.

Richard, A. & et al (1989): Investigation for Determination of

Facts, New York; MC Graw Hills. The Nigeria Capital Market; Developments, Investment Options,

Players, Prospects, Challenges, produced by Research and Market Dev. Dept (SEC).

APPENDIX A

Department of Accountancy, University of Nigeria, Enugu Campus. 5th October, 2011. Dear Respondent,

LETTER OF INTRODUCTION

The researcher is an MBA student of the aforementioned

institution and department. As part of my requirement for MBA

honors in accountancy, the attached research instrument is

structured to solicit your candid view and opinion on a study

specially designed to look into “The Activities of EFCC and How

these can Enhance Financial Accountability and Transparency

in Nigeria”.

The researcher will be grateful if you can dispassionately

complete the form to the best of your ability. Any information

given is strictly for academic purpose only.

Thank you in anticipation of your full co-operation.

Yours faithfully,

Nzejekwu Ifeyinwa Anene (The Researcher)

APPENDIX B

SAMPLE OF QUESTIONAIRE

SECTION A

Please go through the questions and tick (q) to the appropriate

answer as “Yes” or “No” in the following:

1. Sex:

(a) Male [ ]

(b) Female [ ]

2. Marital Status:

(a) Single [ ]

3. Organization under employment

(a) EFCC LAGOS [ ]

(b) EFCC ENTJGU [ ]

(c) NEPA (PHCN) ENUGU [ ]

4. How long have you worked with the organization?

(a) 1 Month - 6 months [ ]

(b) 1 Month - 1 year [ ]

(c)1 year and above [ ]

5. What is your educational qualification?

(a) 0- Level [ ]

(b) OND [ ]

(c) HND [ ]

(d) B.Sc [ ]

(e) MBA/ M.Sc [ ]

(f) Ph.D [ ]

SECTION B

How far has EFCC gone in enhancing financial accountability

and transparency?

(a) Very well [ ]

(b) Not very well [ ]

2. How has EFCC been carrying out her mandate/functions?

(a) Very effectively [ ]

(b) Effectively [ ]

(c) Ineffectively [ ]

3. Has EFCC helped in sanitizing both the public and private

sector of the economic in Nigeria?

(a) Very well [ ]

(b) Not very well [ ]

4. Has the activities of EFCC reduce financial and economic

crimes in Nigeria economy?

(a) Strongly agreed [ ]

(b) Agreed [ ]

(c) Strongly disagreed [ ]

(d) Disagreed [ ]

5. Can EFCC sanitize the Nigeria Economy through

Accountability?

(a) Yes [ ]

(b) No [ ]

(c) No Idea [ ]

6. Has EFCC activities benefited Nigerians?

(a) Yes [ ]

(b) No [ ]

(c) No Idea [ ]

7. How has banks in Nigeria assisted EFCC in sanitizing the

banking sector?

(a) Very well [ ]

(b) Just well [ ]

(c) Not well [ ]

8. Can transparency, Accountability and stewardship of

resources be restored in Nigeria through EFCC?

(a) Yes [ ]

(b) No [ ]

(c) No Idea [ ]

9. Are EFCC adequately financed?

(a) Yes [ ]

(b) No [ ]

(c) No Idea [ ]

10. Does government interfere iii the operations of EFCC?

(a) Yes [ ]

(b) No [ ]

(c) No Idea [ ]

11. Does EFCC investigation terrorism activities?

(a) Yes [ ]

(b) No [ ]

(c) No Idea [ ]

12. Has EFCC recorded any success or achievement since its

establishment?

(a) Yes [ ]

(b) No [ ]

(c) No Idea [ ]

13. Are there any challenges/constraints faced by EFCC in

executing her mandates?

(a) Yes [ ]

(b) No [ ]

(c)No Idea [ ]