In observance of the International Fraud Awareness Week, the Chartered Institute of Forensics and Certified Fraud Investigators of Nigeria (CIFCFIN) has issued a warning that federal, state, and local councils collectively suffer losses of N1.4 trillion annually to contract scams, procurement fraud, fraudulent court judgments, and related fraudulent activities.
The Institute has noted that if no action is taken to address this situation, the current annual losses are projected to increase to N3 trillion by 2025.
To mitigate this issue, CIFCFIN has been advocating for the inclusion of forensic experts in the procurement laws of various tiers of government to identify and address vulnerabilities in the process.
Dr. Iliyasu Gashinbaki, President of CIFCFIN, emphasized the need for a forensic review of the contract award process and the digitization of the procurement process. Traditional methods of contract vetting are no longer effective in preventing fraud. Through a forensic review, experts would assess the background of contract parties, analyze contract terms and conditions, and identify any suspicious elements that require renegotiation or nullification. Digitization would enhance transparency, accountability, and the timely notification of contractual obligations.
CIFCFIN, equipped with a pool of forensic experts, is ready to collaborate with government entities at all levels to tackle these challenges.
This year’s International Fraud Awareness Week serves as a crucial opportunity to raise awareness and educate stakeholders about the dangers and implications of fraud. CIFCFIN Acting Registrar, Dr. Isa Salifu, emphasized that fraud involves any act intended to deceive for personal financial gain, making CIFCFIN the primary chartered body in Nigeria for forensic and fraud investigations.
In a notable case, the New York-based Bloomberg reported that Global Steel Holdings Ltd (GSHL) entered Nigeria’s steel industry in 2004, acquiring several concessions and share purchase contracts. However, the contracts were revoked in 2008 due to allegations of asset stripping. After a series of legal battles, the settlement payment of $496 million was significantly less than the initial claim of $5.258 billion. This case highlights the financial impact of fraudulent contracts and the importance of implementing effective fraud prevention measures.
By addressing contract scams and improving fraud prevention efforts, Nigeria can safeguard its financial resources and foster a more transparent and accountable procurement process.