Business Corruption in Nigeria

Corruption in Nigeria is pervasive throughout all levels of society, frompetty corruption to cases of high-level government officials embroiled in scandals concerning the oil and gas industries.

The government has aimed at containing corruption through the enactment of laws and the enforcement of integrity systems, although concrete results are yet to be felt and are seriously undermined by recent reports of significant losses in oil revenue to corruption. Nigeria has established the Nigeria Extractive Industries Transparency Initiative (NEITI) and has compliant status with the Extractive Industries Transparency Initiative (EITI), which is aimed both at improving transparency in payments between extractive industry companies and government entities and at providing legal instruments to fight for increased transparency in the oil, gas and mining sectors in Nigeria. The government has setup several investment portals providing oversight and information on investment requirements and business registration procedures. Progress has been made regarding public procurement procedures: guidelines have clarified procedures, public tenders are now publicly advertised, and observers note that foreign companies are increasingly treated as national companies. Nevertheless, corruption persists. 

However, companies should note that it is still considered to be difficult to do business in Nigeria and that, for example, facilitation payments to officials are still very much the norm when acquiring services. Additionally, firms should know that property rights, contracts and commercial disputes can be difficult to enforce and settle in Nigerian courts due to corruption, inefficiency and under-staffing. The tax administration lacks transparency, resulting in high levels of tax evasion and in tax officials demanding bribes in return for lower tax rates. The police is perceived to be one of the most corrupt institutions in Nigeria, and the X-Squad (the disciplinary body responsible for investigating corruption inside the police) is reportedly no less corrupt itself.  

May 2014