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Corruption costs Nigeria 40 percent of oil wealth, official says

100,000 barrels said to be stolen each day

ABUJA, Nigeria -- Corruption and mismanagement swallow about 40 percent of Nigeria's $20 billion annual oil income, anti-graft chief Nuhu Ribadu said yesterday.

Industry sources say at least 100,000 barrels, or 4 percent, of national oil exports are stolen every day in Nigeria, the world's eighth largest exporter. Despite its oil riches, 70 percent of the West African country's population live below the poverty line because of corruption and economic mismanagement.

Ribadu said the amount of oil wealth illegally siphoned off is down from about 70 percent two years ago, due to new controls on central government finances. But the Nigerian regions, which control about half of the nation's revenue, have failed to keep up with the pace of central reform, he told Reuters in an interview.

"At the federal level there has been a big improvement. The very big guys who steal now are the state governors," he said.

"Things have improved. About 70 percent used to go to waste and corruption, but the number now is maybe 40 percent," said Ribadu, a key member of a small but powerful group of technocrats who have managed the economy since last year.

Corruption became endemic in the 1990s under late dictator Sani Abacha, who personally banked $5 billion. But a culture of impunity spread throughout the political class when democracy returned to Africa's most populous country in 1999, Ribadu said.

"It took over as the engine of our society and replaced the rule of law."

Nigeria is still ranked the world's third most corrupt nation by Transparency International, a corruption watchdog group.

Rampant corruption and failure to combat Nigeria's chronic economic problems have fueled popular disenchantment with President Olusegun Obasanjo's reform agenda, which has the backing of Western powers and the International Monetary Fund.

The Economic and Financial Crimes Commission, which Ribadu heads, has arrested about 500 suspects and confiscated $500 million in the 18 months since it began targeting international e-mail scams and other fraud, he said.

Campaigners argue that the fight against corruption can only succeed if it goes after the "untouchables," public office holders who have direct responsibility for handling oil wealth but have broad constitutional immunity from prosecution.

This week the EFCC attacked this immunity for the first time by bringing fraud charges against Plateau State Governor Joshua Dariye. It hopes to use other provisions of the constitution to overcome Dariye's legal protection.

"We have a policy of suitable target for maximum impact. We went into [e-mail scams] and now we are going for public treasury looters," Ribadu said.

"We are challenging the immunity. It is in complete conflict with the spirit of the constitution," he added, waving a list of illegal foreign bank accounts held by several governors. Dariye has refused to answer the fraud charges in court, accusing Obasanjo's officials of pursuing a political vendetta.

The EFCC has stepped up the pressure by arresting several bank directors alleged to have handled transactions by Dariye.

"The bankers are really scared, they are jittery. There has never been anything like that in the history of this country," Ribadu said.

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