CORRUPTION AND ECONOMIC CRIMES IN THE PUBLIC SECTOR

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

        Economic crimes has been described as the manifestation of a criminal act done either solely or in an organized manner with or without associates or groups, with an intent to earn wealth through illegal means, carrying out of illicit activities which violate the laws of the land and other regulating statutory provisions governing the economic activities of the government and its administration. It can erode the confidence in the system of a country; threaten the integrity of government, its programmes and institutions, thereby undermining national security, law and order. On the whole, the overwhelming presence of economic crimes can make such a country unattractive to investors (Okolie 2006).

        Irrespective of the sophistication of the methods adopted by criminals, the common characteristics of the crime include cheating, lying and stealing. Corruption is a menace in the public sector, although is a global malaise, the extent of its reach in the public sector was tragically stupendous. All indicators showed that the spread of this cancer had become frightening.

        The menace of corruption leads to slow movement of files in offices, police extortion at tollgates and slow traffics on the highways, port congestion, queues at passport offices and gas stations, ghost workers syndrome, election irregularities, among others. Even the mad people on the street recognize the havoc caused by corruption – the funds allocated for their welfare disappear into the thin air.

        Corruption is endemic in all governments, and that it is not peculiar to any continent, region and ethnic group. Corruption is found in democratic and dictatorial politics; feudal, capitalist and socialist economies.  Corruption practices did not begin today; the history is as old as the world. Ancient civilizations have traces of widespread illegality and corruption. (Lipset and Lenz 2000).

        The price of corruption has been extremely high. The economic, political, social and moral bases of the country have been severely eroded and degraded. It has brought us near the brink and almost rendered us helpless and hopeless. It became imperative that something drastic had to be done to arrest the rot. This impelled the commitment of the president to tackle corruption head – on. (ICPC ACT 2000).

1.2   STATEMENT OF RESEARCH PROBLEM

        Due to government insincerity in fighting corruption and economic crimes in the public sector, civil servants in the ministry of finance take advantage of looting the treasury. The civil servants perpetrate these act because they are connected to the top government functionary and thereby they were spared from been punished.

        Interference in the duties of the anti – graft agencies such as independent and corrupt practices commission and economic financial crimes commission in combating the scourge. The anti – graft agencies are been used to witch – hunt any civil servants that do not dance to their tune by the government in power. The independence of the anti – graft agencies to punish corrupt civil servants in the ministry has been distorted.

        Inefficiency and underutilization of public funds surface as a result of corruption and economic crimes. Due to corruption and economic crimes in the public sector, the ministry have not be able to perform efficiently and proper utilization of the resources that have been assigned to their ministry.

        Collusion by officials in the public sector with foreigners to perpetrate corruption and found safe refuge and acceptance abroad. The officials in the public sector have engaged in this act now. This has caused the resources provided to the public sector to be mis – spent and misplaced.

1.3   OBJECTIVES OF THE STUDY

        Corruption and economic crimes have hitherto hindered the efficiency and growth of the public sector in rendering their services. It is in this stead, the study is aimed at:

1. To evaluate measures by government in curbing corruption and economic crimes in the public sector.
2. To determine the role-played by anti – graft agencies.
3. To evaluate the effectiveness and utilization of public funds by ministry.
4. To evaluate the checks and balances in ministry on public funds.

1.4   STATEMENT OF HYPOTHESIS

        The following hypotheses are formulated for testing in the course of this research.

1. Null Hypothesis (H0) – The measures by government and anti – graft agencies in curbing corruption and economic crimes does not eliminate crimes in the public sector.

Alternative Hypotheses (H1) - The measures by government and anti – graft agencies in curbing corruption and economic crimes eliminate crimes in the public sector.

(2) H0 – The checks and balances in ministry does not result to the effectiveness and utilization of public funds.

H1 – The checks and balances in ministry result to effectiveness and utilization of public funds.

1.5   SCOPE OF THE STUDY

        The research work focus on corruption and economic crimes, its possible effect in the public sector. The time frame covers from 1991 to 2008 using ministry of finance and to know the possible effect of corruption and economic crimes in there. This is necessary because it takes an equal amount of time from the last years of military regime and an equal amount of time from the first few years of the present democratic the economic and financial crimes commission and independent corrupt practices commission were established.

1.6   SIGNIFICANCE OF THE STUDY

        Corruption and economic crimes have eaten into the fabrics of the public sector and it has been taken as business as usual. These deadly acts had been perpetrated without any regret, since these crimes started from the top. It is in this light the study is carried out to find a means of drastically reducing the ugly menace called corruption and economic crimes.

        This study will be beneficial to civil servants in the public sector, relevant to law enforcement agencies, public office holders, researchers, bankers, accountants and the general public. This will help to unfold perpetrators of such crimes and how these crimes are perpetrated.

        This study will also serve as a basis for putting into place various procedures and policies, which will help, curb this dreaded monster (corruption and economic crimes). This development would help to bring sanctity and sanity in the public sector and re – introduce confidence in the public sector.

1.7   LIMITATION OF THE STUDY

        As this is a relatively new era, not much has been carried out due to insincerity of purpose amongst writers and non – availability of important literature works and text. Due to the sensitive nature of the study, this would place a constraint on the method analysis available for this study.

        Non – cooperation by the officers in the ministry also posed a challenge in this research works. Despite the shortcomings, this research is aimed at carrying out a comprehensive and empirical work that will meet the yearnings of people.

1.8   HISTORICAL BACKGROUND OF THE ORGANIZATION

FEDERAL MINISTRY OF FINANCE

        The Federal Ministry of Finance was established in 1958 by the finance (control and management) ordinance to replace the then Finance Department. The Ordinance conferred on the Ministry the responsibility for the control and management of the public finance of the federation.

        In the 1980s, attempts were made to re – organize the finance ministry either by excising some of it departments or ceding others to it. For example, in 1980 the budget office became an Extra – Ministerial Department under the Executive Office of the President and headed by a Special Adviser to the President on Budget matters. From 1987, the Budget Office functioned once again under the Ministry of Finance and was supervised by its own permanent security. In 1988, the office was merged with the ministry of national planning to form the office of budget and planning in the presidency under a ministry of state. Then in 1991, the budget office was excised again from the ministry of budget and planning and returned to the ministry of finance where it is to date.

        In the case of the customs, it was a Department in the Ministry of Finance until 1985 when it was transferred to the Ministry of internal affairs where it was managed under the customs, Immigration and Prisons Services Board. However, in 1992, customs was returned to the jurisdiction of the Ministry of Finance.

        With regard to the Development Aid Department, it was transferred in 1988 from the National Planning to form the Federal Ministry of Finance and Economic Department. The Development Aid Department was eventually returned to National Planning in 1991.

Functions of the Ministry

        The following are the functions of the federal ministry of finance

1. Preparing annual estimates of revenue and expenditure for the federal government.
2. Formulating policies on fiscal and monetary matters.
3. Mobilizing domestic and external financial institutions through both internal and external financial institutions for development purposes.
4. Maintaining adequate foreign exchange reserves aimed at ensuring a healthy balance of payment position.
5. Maintaining the internal and external value and stability of the Nigerian currency, monitoring government revenue from oil and non – oil resources.
6. Supervising the insurance industry.
7. Managing revenue allocation matters.

1.9   DEFINITION OF TERMS

PUBLIC SECTOR: This include all organization set up by the government to satisfy human want to take care of specific want, specific needs of the public without profile purpose.

DUE PROCESS: This refers to the mechanism, procedure and set of standards applied to public sector procurement of goods and services to ensure budget discipline.

FRAUD: This is defined as an irregularity of impropriety involving the use of deception to obtain an unjust or illegal financial advantage (Okolie 2006).

CRIMES: This can be defined as a dishonest, violent, or immoral action that can be punished by law.

ECONOMIC: According to Longman dictionary of contemporary English, defined economic as the system by which a country’s money and goods are produced and used.

FINANCIAL: The management of money especially money controlled by a government, company or large organization.

TRANSPARENCY: As used in the humanities and in a social context more generally, implies openness in every area of business or globally.

MISAPPROPRIATION: This is the misuse of public fund especially by public office holder in the ministries.

ETHICAL VALUE: These are those qualities, which ensure that a member behaves with integrity in all professional, business and financial relationships and that he or she should strive for objectivity in all professional and business judgments.

ACCOUNTABILITY: This is the true openness or giving account of what has been expended by the public officer holder.

FAVORITISM: This is a mechanism of power abuse implying a highly biased distribution of state resources.

PROCUREMENT: This is the acquisition of goods and/or services at the best possible total cost of ownership, in the right quantity and quality.

TREASURY: This is the keeping of accounts of government funds and investment.

BUDGET DISCIPLINE: This involves strict compliance with all the variables about the budget.

CONTRACT: This is a project executed by persons or person normally evidenced by an agreement between two or more parties.