Report: Nigeria records second highest number of fraud cases in Africa in 2011

by Seyi Lawal

The African country with the most reported fraud cases was South Africa at 35 percent while Nigeria had the second most cases, at 22 percent in the second half of 2011.

The number of reported cases of fraud on the continent rose from 355 in the first half of 2011 to 520 cases in the second half. This was an increase of 46.4 percent according to the inaugural African Fraud Barometer, a new tool from the global network of professional services firms providing audit, tax and advisory services. 

Business Report indicated that South Africa and Nigeria had fewer cases reported in the second half of the year than in the first; however Zimbabwe had the biggest increase in the value of fraud committed in the second half of 2011, to the tune of $1.2bn. 

The biggest targets of fraud are governments. They were the victims of 43 percent of the reported cases in the first six months of 2011, although this decreased to 37 percent in the last six months of the year. Employees were the most frequent perpetrators of fraud at 29 percent of cases in the second half of the year, up from 27 percent in the first half. 

Despite the increase, the value of fraud cases decreased from $7.17 billion (R56bn) to $3.7bn. 

See excerpts from the Business Report article: 

In terms of value, management was the biggest culprit in the second half, committing fraud worth $1.2bn.

In the first six months of 2011, the highest value of fraud was committed by professional advisers, at $3.3bn.

The African Fraud Barometer is a first effort to measure fraud across the African continent and expose the risk of fraud for companies in their day-to-day operations.

The data is compiled from all available news articles on Africa and reports on fraud from designated databases. The survey is complied and published every six months.

Petrus Marais, KPMG’s global leader for forensics, said: “We felt there was a need to create a tool like the Africa Fraud Barometer since the world has begun to look at Africa as a new investment destination.

“At the same time, we are still dealing with an often negative perception of Africa. We therefore see ourselves as risk analysts and would like to provide information that allows potential investors to assess and conceptualise risk on the African continent.

“To outsiders, I say that Africa is a great place to invest if you have the ability to assess the risk involved.”

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