Procurement fraud at 38% the most prevalent economic crime in Nigeria in past 24 months – PwC

Procurement fraud is the most prominent economic crime in Nigeria, according to respondents to a biannual survey of global economic crime produced by audit firm, PwC.

The Global Economic Crime and Fraud Survey 2018, which examines over 7200 respondents from 123 countries including Nigeria, indicated that procurement fraud (38%) is the most prevalent economic crime in Nigeria in the last 24 months, followed by bribery and corruption (33%), accounting fraud (32%) and business misconduct at 31 percent.

According to the survey, 49 percent of respondents globally said their companies had suffered fraud in the last two years, up from 36 percent in 2016. Regionally Africa (62% up from 57%), North America (54% up from 37%) and Latin America (53% up from 28%) reported the highest levels of economic crime.

The findings from Nigeria follow a similar pattern with more than half of respondents (57%) reporting that their organisations have been victims of economic crime in Nigeria within the last 2 years up from 26 percent in 2016.

Globally, Asset misappropriation (45%) continues to lead in economic crime experienced by organisations in the last 24 months, cybercrime (31%), consumer fraud (29%) and business misconduct (28%) are close behind.

This year’s survey also revealed a significant global increase (+6% to 52%) in the share of economic crimes committed by internal actors, and that there was also a jump in the percentage of those crimes attributed to senior management (from 16% in 2016 to 24% in 2018).

The survey report, however, stated that there are regional variations in the share with Australia at 64 percent, the UK (55%), Canada (58%); Argentina (44%) and the US (48%), being places where most reported crimes were committed by external actors.

“The results underline the greater awareness and understanding of the types of fraud, perpetrators, the role of technology, and fraud’s potential impacts and costs for a business,” said Cyril Azobu, PwC Nigeria’s consulting leader:

“We can’t equate higher levels of reported crime with higher levels of actual crime. What the survey is showing us is that there is far more understanding of what fraud is and where it is taking place. It’s particularly true of cybercrime, where there’s a much greater understanding of the issues, investigations, analysis, and greater investment in controls and prevention.

“However, despite the progress in understanding and reporting, the fact that just over half (51%) of respondents say they have not, or don’t know if they have experienced fraud in the past two years, suggests blind spots still exist in many organisations,” he noted.

Other key findings of the survey include: 18 countries reporting cybercrime to be more disruptive than the global average (15%), including Ireland (39%), Belgium (38%), South Korea (31%), Canada (29%), the UK (25%), and the US (22%) all reporting higher than the global average; and employee morale, business relations, damage to reputation and brand strength being the top three impacts of reported fraud.

Others are reports of disruption from consumer credit card and financial fraud adjudged to higher than the global average (29%) amongst regions including Africa (36%); Eastern Europe (36%); and North America (32%).

The report specifically noted that cybercrime would likely be the most disruptive economic crime in the next two years, with respondents saying it is twice as likely as any other fraud to be identified to potentially impact organisations.