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C O N F I D E N T I A L SECTION 01 OF 02 LAGOS 000038 
 
SIPDIS 
 
E.O. 12958: DECL: 12/31/2029 
TAGS: PGOV KCOR KDEM ECON NI
SUBJECT: FIGHTING CORRUPTION WITH TECHNOLOGY IN EDO, NIGERIA 
 
REF: A. 08 LGOS 477 
     ¶B. 08 LAGOS 514 
     ¶C. 09 LAGOS 227 
     ¶D. 09 LAGOS 285 
     ¶E. LAGOS 05 
     ¶F. LAGOS 08 
 
Classified By: Consul General Donna M. Blair for Reasons 1.4 (B,D) 
 
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SUMMARY 
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¶1.  (C) Governor Oshiomhole (Action Congress - AC) of Edo 
State seeks to fight corruption with technology rather than 
the judiciary.  Oshiomhole has collected biometric data from 
public employees and scanned in personnel documents in order 
to validate wage, salary and pension payments.  He is 
incrementally introducing plastic ID cards with encoded data 
on microchips which will form the basis for tax, fee and fine 
collection without cash payment or middlemen.  He has 
automated payroll taxes for large employers and is expanding 
the system to medium and small enterprises.  Oshiomhole is 
plugging the leakages in the present and future rather than 
trying to recover the losses of the past.  This is the third 
in a series of cables assessing the government of former 
labor leader Adams Oshiomhole roughly one year after he came 
to power as governor of Edo State.  END SUMMARY. 
 
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FIGHTING PAY-ROLL FRAUD WITH BIOMETRIC DATA 
------------------------------------------- 
 
¶2.  (C) Edo State completed collecting biometric data for all 
political appointees, public employees and pensioners in 
order to counter payroll fraud by December 9. Likewise all 
personnel documents for public employees were scanned into a 
central data bank, enabling a comparison between job-profile 
and employee qualifications and pay scales by December 1. 
The governor's special advisor on Information Technology, 
Yemi Keri, told PolOff December 7 that the State had 
difficulty in convincing employees that this was not a 
"witch-hunt," but is now positioned to run a parallel payroll 
in December to establish the order of magnitude of payroll 
fraud and start pinpointing discrepancies.  Governor 
Oshiomhole told PolOff on December 7 that payroll fraud had 
proven more complex and pervasive than initially anticipated, 
and expressed hopes that the savings generated by the 
elimination of such fraud will help finance the 27 percent 
increase in teacher's salaries agreed to with the unions. 
 
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TAX NUMBERS AND ID-CARDS 
------------------------ 
 
¶3.  (C) Starting in January, plastic ID cards with embedded 
microchips containing key personal data were introduced to 
facilitate payments to the state at any of the nine 
partnering banks.  Keri stressed that the state did not want 
to "launch" these cards with great fanfare, but rather 
distribute them incrementally while running a public 
information campaign highlighting the benefits.  The ID cards 
will incorporate a unique tax identification number which is 
being introduced in parallel.  (NOTE: Nigeria has no federal 
personal tax number although some other states, notably 
Lagos, have introduced state tax numbers.  END NOTE.) 
 
¶4.  (C) The goal is to enable residents to make all payments 
to the State electronically using these cards, whether for 
taxes, vehicle registration fees, or for traffic and other 
fines.  The system eliminates cash payments and middlemen, 
the primary source of "leakages," according to Commissioner 
for Finance John Inegbedion.  The nine participating banks 
benefit by getting the accounts associated with the payment 
system and having use of the funds for five working days. 
Residents can pay cash into the banks which is then credited 
to their card and used to pay their obligations to the state 
at a "point-of-sale" station located at the bank, or hold 
accounts directly with the bank and use the cards to make 
direct payments from their account to the state. 
 
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LAGOS 00000038  002 OF 002 
 
 
AUTOMATED PAYMENTS 
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¶5.  (C) Payroll taxes have already been automated for large 
enterprises and employers, such as the state itself.  The 
State plans to introduce automated payroll taxes with medium 
and smaller enterprises in the course of 2010.  As the 
plastic ID cards become more pervasive, Keri expects that it 
will become possible for many of the self-employed to pay 
their taxes automatically from their bank accounts as well. 
 
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TRAINING THE UNEMPLOYED 
----------------------- 
 
¶6.  (C) To scan in the personnel documents, collect biometric 
data from all over the state, and to manage email accounts 
and websites associated with these initiatives 437 formerly 
unemployed graduates were hired and trained by the 
Information Technology office.  In addition, 250 graduates 
were hired to train bank employees in the "point-of-sale" 
revenue collection system and manage it thereafter.  Many of 
these new employees had been unemployed for years.  Last but 
not least, 60 civil servants from the Board of Internal 
Revenue received training in Microsoft word and excel to 
enable them to manage their jobs more efficiently.  (NOTE: 
When Oshiomhole's Commissioner for Budget, Planning and 
Economic Development joined the Oshiomhole cabinet he 
discovered he was the only person in his entire ministry who 
could use Excel.  END NOTE.)  Keri hopes that these new and 
newly trained public employees will inspire other civil 
servants to approach their work with more service 
orientation, enthusiasm and professionalism. 
 
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COMMENT 
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¶7.  (C) The technological approach to tackling corruption 
introduced by Oshiomhole does not penalize the evil-doers nor 
recoup the losses of the past.  Instead, this approach 
focuses on stopping on-going and future losses.  The approach 
does not entail lengthy and expensive legal battles, it does 
not arouse the immediate resistance of former power holders, 
and it is replicable.  By moving away from cash payments and 
eliminating middlemen, the state has tripled revenues.   END 
COMMENT. 
 
¶8.  (U) ConGen Lagos has cleared this cable with Embassy 
Abuja. 
BLAIR