Yinka Osobu does not consider herself a crusader against corruption. In fact, she is a small business owner in Nigeria trying to keep costs down, manufacture quality products, and make a profit. She has been doing this for 18 years as the CEO of CMC Interiors, a furniture and fabric company based in Lagos.
However, when she was charged a different price for each container she imported, she grew frustrated. “There weren’t two containers that came in under the same regulations,” she said, noting how prices and regulations changed with no consistency or clarity. “I had reached the end of the road.”
Every year, the rules and regulations on importing containers changed, presenting a clear opportunity for bribery. For example, because Nigeria was trying to boost domestic textile manufacturing, certain fabrics were considered contraband and not allowed in. However, the ever-changing rules were not being communicated to business owners or the public (and this certainly was not a priority for the government).
“There was no moratorium time once a particular category of fabric was banned, so your containers were already in route with the contraband fabrics, arriving at the port leaving you to deal with the problem,” said Osobu, who tried to work around these problems for two years by bringing in materials via air. However, the cost of air delivery made costs skyrocket and was unsustainable. The ban was eventually lifted on certain categories of materials, but other obscure limitations still applied.
In addition, the types of documentation required of importers regularly changed. “I needed a particular certificate for wood to show it is not infected,” Osobu says, “but then after getting that certificate, the customs agents said they didn’t want that certificate anymore; they wanted a different one.” Further, Nigeria was not equipped with an agency that could issue the certifications — Osobu had to travel to Italy to get them. “There’s a lot of hoarding of information. When you go to the office, they don’t tell you all your rights and options. I was so disillusioned over the costs. I thought I’m going to have to reinvent my business and come up with another plan.”
One day, a customer of Osobu’s, who just so happened to be a former officer with the National Ports Authority (NPA), was in her shop. She told him of her experiences and in two weeks time, he gave her an offer of assistance. He wrote a letter, which included samples of Osobu’s fabrics, to be sent to Abuja to the Head of Customs as well as the Ministry of Finance (the government agencies responsible for importing policies) with a request for them to clarify which fabrics are permitted and which are not.
In three weeks, Osobu received an official letter from the Controller General indicating which of her materials were permitted; three were allowed, and one was not. Osobu took this letter with her to customs when she went to receive a container. As usual, they gave her the normal hassle, trying to shake her down for a bribe, until she pulled out the letter. Verifying its authenticity, they allowed her container in.
Osobu shared that she spent on average about $19,000 in unintended fees and charges per year. Now that she has the official letter, she reports paying about $1,250 a year in additional costs. She passionately notes that she now informs everyone she can about her experience so as to help them know how or where to take action.
“The more people that know, the better,” she says, “I tell anyone and everyone who will listen…my friends, members of the [furniture] association. Information is key. If people get to know the real ways to avoid [paying a bribe], they would.”
Osobu is quick to admit that she likely would have never gotten the same access at the level that the retired NPA official did. However, from this experience, she says, “I know now I can search and ask enough questions. But sometimes, for some people, it’s a very long process.”
“I wasn’t trying to fight corruption. I was just desperate because the costs [of doing business] were just going up and up.” Yinka Osobu, CEO of CMC Interiors LTD.
How can Osobu’s experience inform further action by business owners? How can this individual experience translate to a larger scale, bringing down barriers so Nigeria’s domestic economy can thrive?
Osobu was one of twenty participants in a CIPE-sponsored anti-corruption discussion group that took place in late September in CIPE’s newly-establiehd field office in Lagos, which examined questions such as these. At this gathering, participants representing think-tanks, universities, business organizations, chambers of commerce, and private sector coalitions delved into the topic of Nigeria’s debilitating corruption — and, more importantly, what the private sector and civil society can do about it.
The two-day Anti-Corruption Discussion Group focused on providing frameworks for understanding and tackling corruption, based on CIPE’s experiences around the world. The conference helped CIPE’s Nigerian partners better understand how anti-corruption components can be incorporated into their programming, and provided a platform for coordination with other economic reformers in the country.
During the workshop, representatives from the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture; Siemens; and the Convention on Business Integrity shared their successes on combating corruption through various initiatives in which they are involved.
When asked what new ideas or concepts about combating corruption they learned at the event, participants discussed the feasibility of collective action as an effective tool for reinforcing the power of business associations. They were also inspired with real case examples and the need for their own internal control mechanisms for their businesses. Some of new concepts they mentioned as being the most helpful were government agency scorecards and working with the government through public –private dialogue mechanisms.
CIPE’s vast experience through its global network as well as in-house research and tools on corruption provide a starting-point for private sector actors, such as business owners and associations, to be empowered to address this barrier to economic freedom.
“I came fully expecting to hear the same old thing repeated over and over. I came and learned several things and even ways of actually planning anti-corruption activities that can be carried out (as opposed to feeling helpless and thinking it’s hopeless),” wrote one participant. “Considering the huge damage that corruption has done in Nigeria, this event is especially useful for me in my work as I train/build the capacity of Nigerian private sector players,” wrote another participant. “At the end of the day, I came away fully satisfied that something can be done in our areas of influence in combating corruption.”
Corruption destabilizes democracies by preventing transparent governance and fluid participation from an informed citizenry. It obstructs the development of an inclusive economic system with checks and balances, keeping Nigeria’s vast resources from benefitting the people. Many times, private sector actors point the finger at the public sector, and while it takes both a supply and demand side to prop up corruption, there is a strong role for businesses and representative associations to play in the fight against corruption. Sharing experiences, tools, resources, and ideas is a starting-point for initiating action.
For more on CIPE’s tools and resources to fight corruption, visit http://www.cipe.org/topic/combating-corruption.
Published Date: October 25, 2012