As the world marked the International Fraud Awareness Week, the Chartered Institute of Forensics and Certified Fraud Investigators of Nigeria (CIFCFIN) has said that intelligence available to it reveals that federal, state and local councils cumulatively lose N1.4 trillion yearly to contract scams, procurement fraud, fraudulent court judgments and other related frauds.
International Fraud Awareness Week is observed every year between November 8 and 18 every year.
The Institute added that the “current yearly losses are expected to rise to N3 trillion by 2025 if nothing is done to remedy the situation.”
CIFCFIN said in a statement the huge loss is why it has been calling on various tiers of government to review their procurement laws to include forensic experts to plug the holes in the process.
The statement quoted the CIFCFIN President, Dr. Iliyasu Gashinbaki, who was speaking during this year’s International Fraud Awareness Week at its Forensic House in Abuja as saying: “Two things are required. One is to conduct a forensic review to look at the way contracts are awarded by government, and second is the digitisation of the process.”
He said the traditional way of vetting contracts by looking at the clauses is no longer tenable as it is susceptible to fraud.
According to him, with forensic review, experts will be looking at the background of parties in the contracts; the terms and conditions of each clause and their implications of signing the contract and in the future. This way, all suspicious contracts can be clearly seen by government. “This will throw up all issues in the contracts that need to be renegotiated, and it will also throw up all issues that need to be expunged,” he said, adding: “And if the contract is completely fraudulent, government now can go to court and have the contracts nullified. So, that is why forensics review is important because that is what will arm government to either call parties to renegotiate the contracts or go to court and have the contracts reviewed or nullified.”
He disclosed that the Institute, with a pool of forensic experts, is ready to partner with government at all levels to achieve this.
On the second aspect, which is the digitisation of the procurement process, the President said: “Once digitisation is involved, it makes it more accountable and more transparent. And all the body of knowledge to forestall challenges will now be inputted, and because it is AI (Artificial Intelligence) driven, you will discover that parties are notified of their obligations, of their failings, of their timelines and all of that; as defined in the contracts.”
Speaking on the import of the International Fraud Awareness Week, CIFCFIN Acting Registrar, Dr. Isa Salifu, said it was meant to sensitise and create awareness about the danger and implications of fraud.
“Now, what is fraud? Fraud is any act that is meant to deceive for the primary purpose of personal gain, and largely financial gain. So, for us in Nigeria, this Institute remains the foremost body that is chartered to bring us succour in terms of forensics and fraud investigations,” he explained.
He recalled that the New York-based Bloomberg once revealed that Global Steel Holdings Ltd (GSHL) entered the Nigerian steel industry in 2004, acquiring five major concessions and share purchase contracts during the Olusegun Obasanjo administration.
“The agreement was to first manage and later buy Ajaokuta Steel Company Ltd. However, the contracts were revoked in 2008 after the FG accused the firm of asset stripping. In 2016, the Federal government approved the execution of a modified concession agreement with GSHL, which allowed the firm to retain the Nigerian iron Ore Mining Company in Itakpe. Three years later, the Federal government backed out of the agreement leading to legal battles involving both parties,” he said, pointing out that the settlement payment of $496 million was 91 per cent less than the earlier claim of the firm to the tune of $5.258 billion according to the Attorney General and Federal Minister of Justice at the time. According to Bloomberg, Global Steel was put into liquidation by a London court over $167milion owed to Moorgate Industries Ltd and the payment from Nigeria could offer a lifeline to the company.