Nigerian Insurance companies and banks to issue integrity bond to contractors.

INSURANCE companies and banks in Nigeria are to issue fiduciary bonds, also known as, integrity bonds to contracts for infrastructure projects, consultancy engagements and so on. Nigeria’s Vice-President, Yemi Osinbajo, who disclosed this at a breakfast meeting in Abuja, the Nigerian capital with the theme,
‘Rethinking Business Conduct and Practices: A Sustainable Concept to Transforming Nigeria’s Business Eco-System’, said that the threshold for the bond is N300 million and above. Osinbajo said that the fiduciary bond would be an additional protection that covers the businesses for losses that they incur as a result of fraudulent acts by specified employees within the business. He stated: “The Fiduciary bond concept will not only be a good anti-corruption prevention mechanism, it will also align with the idea behind the Executive Order 001 to create a transparent business environment between government agencies and the private sector. “The rationale behind this concept is to stop and discourage attempts of collusion from both sides of a contract from engaging in corrupt practices. This also means that the party contracting with the government shares the cost of engaging in corrupt practices. The federal government will be the beneficiary of forfeited bonds once evidence of corruption has been proven.” Represented by Mr. Ade Ipaye, Deputy Chief of Staff to President Muhammadu Buhari, Vice President Osinbajo said from what he understood, the bond will have specific conditions set out, through which the bond can be called up. It serves as a guarantee against bribery, inducement, fraud and all other sharp practices that occur during the contracts interactions between the government and the private sector. A social Economist, Mr. Adeniyi Aromolaran, while presenting the bond to the representative of the Vice-President, said fiduciary bond offers additional protection benefits to businesses for losses caused by the dishonest acts of employees.

This article was earlier published here

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