Forensic Accounting and Anti-Corruption in Nigeria: Beyond Detection, Towards a Structural Accountability Architecture for a Captured State

Abstract

Nigeria is faced with a paradox when it comes to the global fight against financial crimes: it has one of the most advanced institutional frameworks to investigate and prosecute financial crimes in Africa, including the Economic and Financial Crimes Commission, the Independent Corrupt Practices Commission, the Financial Intelligence Unit and a constitutionally-appointed Auditor-General, but has historically featured among the continent's most corrupt countries, with its score of 26 out of 100 on Transparency International's Corruption Perceptions Index in 2024. This is a theoretical and analytical paper, which, unlike the typical empirical research paper design, relies on material obtained from documentary evidence, but also utilises political economy frameworks that have not been deployed in the existing literature to explain why Nigeria, despite the extensive forensic accounting infrastructure, has a problem of systemic corruption, which cannot be attributed to a lack of institutional capacity alone, which is the prevailing explanation in the literature. The paper makes four original contributions. Firstly it proposes to define a new theoretical category - Forensic Accountability Capture (FAC) - whereby the formal capacity for forensic investigation is dampened by systematic obstacles to investigating politically connected perpetrators, which no current framework has explicitly named or modelled. Second, it offers a novel empirical tool, not empirically tested here, called the Political Selectivity Index of Prosecution (PSIP) which quantifies the degree of politically discriminatory patterns in anti-corruption enforcement. Third, it looks at the little studied relationship between forensic accounting and Nigeria's emerging financial technology (fintech) sector, and suggests that the financial transaction fragmentation facilitated by fintech has created a whole new class of fraud architectures which the traditional forensic methodologies are ill-equipped to provide remedies for. Fourth, it suggests the Integrated Forensic Accountability Framework (IFAF) as a redefined institutional structure in the field of forensic anti-corruption practice in captured state environments. Based on the agency theory, state capture theory and new institutional economics, the paper lays the groundwork for its analysis and is part of a growing body of work that views anti-corruption not as a technical problem waiting for the correct forensic tool, but as a problem of political economy based on the need for structural institutional redesign.