The transactions involved in the Armsgate scandal took place under the rule of the People’s Democratic Party (PDP) government of Presidents Umaru Yar’Adua, who ruled from 2007 until his death in 2010, and Goodluck Jonathan, Yar’Adua’s vice president, who took over in 2007 and subsequently won reelection in 2011.

At the center of the web of corruption is Col. (retd.) Sambo Dasuki, Jonathan’s National Security Advisor (NSA) from March 2012 to March 2015. Dasuki effectively controlled military procurement during his period in office with no supervision and virtually no input from the Ministry of Defence.

The first public details of Armsgate were presented in the interim report of a government-appointed investigative panel on Nov. 17, 2015. The numbers contained in official public statements on the report are somewhat ambiguous , due to the use of multiple currencies and what appear to be overlapping sums of money, but by any reading expose massive fraud in arms procurement. The report stated that between 2007 and 2015, there had been ‘extra-budgetary interventions’ for arms procurement totaling NGN (Nigerian naira) 643.8 billion, and that the ‘foreign currency component’ was USD 2.2 billion. These appear to be two separate sums involved in the corruption scandal, as over the period in question, the naira was never below 200 to the U.S. dollar. Thus, the total value of these ‘extra-budgetary interventions’ would have amounted to somewhere between USD 4.5 billion and USD 7.2 billion, depending on the timing of the naira transactions and the exchange rate at the time.[1]

However, very little actual arms procurement resulted. According to the report:

“The committee also observed that of 513 contracts awarded at USD 8,356,525,184.32; 2,189,265,724,404.55 naira and EUR 54,000.00; Fifty Three (53) were failed contracts amounting to USD 2,378,939,066.27 and 13,729,342,329.87 naira respectively.”

Thus, according to the report, around USD 2.5 billion worth of ‘failed contracts’—that is, contracts for which no goods or services were delivered—occurred between 2007 and 2015. The total value of contracts awarded—which amount to at least USD 19 billion—is clearly far higher than the extra-budgetary interventions. Hence, it would appear that the figures for failed contracts relate to all contracts, from both budgetary and extra-budgetary sources, and include regular contracts for goods and services as well as for arms.

According to the report, Dasuki awarded ‘fictitious and phantom contracts’ worth USD 1.7 billion for the procurement of four Alpha jets and twelve helicopters, as well as bombs and ammunition, which were never delivered. Most of the value of these contracts went to just two (unnamed) companies, despite, as the report notes, their previous record of non-performance.

Moreover, the NSA directed the Central Bank of Nigeria to transfer USD 132 million and EUR 9 million to the accounts of a Nigerian company, Societé d’Equipements Internationaux (SEI), without any contracts to back them up.

The total amount stolen remains uncertain. In early May 2016, Nigeria’s chief anti-corruption body, the Economic and Financial Crimes Commission (EFCC) reported that a previously-quoted figure of USD 2.1 billion related to just one transaction, and in total USD 15 billion had disappeared. If correct, this would be almost as much as the total official defense budgets between 2007 and 2015. It was also said to equal half of Nigeria’s foreign currency reserves. However, no further details of this figure have been produced.

The beneficiaries of Armsgate, such as Dasuki himself, appear to have included a large number of senior military officers, politicians, government officials, and businessmen, and their families.

The mechanisms of corruption appear to have depended on a complete absence of oversight of funds within the military apparatus. According to one observer, the rot truly began under Dasuki’s predecessor as NSA, Gen. Andrew Awoye Azazi (retired, now deceased), appointed by Jonathan in October 2010. While the Ministry of Defence itself was hardly a model of probity before the appointment, during Azazi’s tenure as NSA the office started to usurp the ministry’s procurement authorities, apparently with Jonathan’s approval. The ready justification of fighting Boko Haram allowed the government to effectively write blank checks for funds, supposedly for arms purchases, which could then be diverted into private bank accounts. When Dasuki took over as NSA, contracts could be signed and funds allocated without detailing tenders, competitions, proper accounting, or indeed any actual acquisitions to show for the contracts. In some cases, as noted above, funds flowed without even the formality of a contract. The financial rewards could therefore be freely shared out between Dasuki, other officers, officials approving the fake deals, and heads of real or paper companies to whom contracts were awarded. It appears that the Central Bank of Nigeria collaborated in the plunder, approving large transfers of funds to individuals and companies on the say-so of Dasuki or other individual senior officials.