It is worrisome that funds stolen from Nigeria annually through organised Illicit Financial Flows (IFFs) may provide about 62 per cent or about N6.9trillion of the money needed to finance the nation’s 2019 budget of N8.826trillion. Arecent report by the Nigeria Extractive Industries Transparency Initiative (NEITI) and Trust Africa reveal that Nigeria loses between $15 billion and $18 billion yearly to IFFs.
According to the report, over 92 percent of the crime is committed in the oil and gas sector. Also, the Economic Com- mission for Africa (ECA) revealed that the United States (US) accounted for 29.0 per cent of IFFs from Nigeria; Spain, 22.5 per cent; France, 8.7 per cent; Japan, 8.5 per cent; and Germany, 7.7 per cent. Inciden- tally, the five countries, which contributed 76.4 per cent of all IFFs from Nigeria from 1970-2008, were reportedly the key destinations of the nation’s oil products during the period. The report further revealed that multinational and national oil companies operating in Nigeria, public office holders, the political elite, smugglers of commodities and others swindle the country through trade invoicing, tax evasion and trade under-pricing, thereby erasing all trade records from countries of origin and destinations. Also, exporters of fuel allegedly accounted for almost half of the illicit financial flows between 1970 and 2008. The menace was driven by global oil price increases during the period.
Similarly, a United Nations report on “Illicit Financial Flows and the Problem of Net Resource Transfers from Africa: 1980-2019” observed that between 1980 and 2009, nothing less than $1.2trillion to $1.4trillion left Africa, and the bulk came from Nigeria. The lost money is half of the current Gross Domestic Product (GDP) of Africa.
Currently, Nigeria is reported to account for about 70 per cent of the estimated $200billion allegedly stolen by African public officials, while some Central Banks of some African countries are alleged to be complicit with the corrupt leaders. A report by Global Financial Integrity Group, based in Washington DC, USA, which recently ranked Nigeria among the ten largest countries in the world for illegal financial flows, also claimed that Nigeria’s banking system accounted for an estimated $854billion illicit financial transfers in Africa between 1971 and 2009. According to the World Bank, Nigeria lost $140billion in illicit financial transfers between 2002 and 2011.
Undoubtedly, illicit financial flows constitute major obstacles to the nation’s economic growth. Therefore, we urge the Federal Government to curb all leakages in the nation’s financial system. The banking sector should work with the government to end illegal financial transfers.
The financial drain has stunted not only the nation’s economic growth, but also increased poverty level. It has worsened Nigeria’s debt profile that now stands at N24.387trillion. Due to the financial hemorrhage, critical sectors of the economy such as health and education have suffered utter neglect by successive administrations in the country. It has even vitiated the government’s effort to realise the UN Sustainable Development Goals (SDGs).
It will be recalled that President Muhammadu Buhari had in his address to the 70th General Assembly of the United Nations in New York, USA, in 2015, urged world leaders to strengthen mechanisms for dismantling safe havens for proceeds of looted public funds. He also charged them to do more to return stolen funds and assets to their countries of origin. It is good that some countries recently re- turned some of the Nigeria’s looted public funds to the Federal Government. However, another report, last week, disclosed that the Federal Government, the US government and the Island of Jersey had agreed to share about $268 million which was plundered from the treasury by former military leader, Gen. Sani Abacha. The government should initiate tough legislations that will make it hard to move stolen funds out of the country. This is perhaps the best way to pass a strong message that looters of public funds will henceforth have no hiding place.
The anti-graft agencies should tighten loose ends that sometimes make it possible for cybercrime and cross border illicit financial transactions to thrive. Let the CBN ensure greater vigilance and supervision of the banking system to forestall illegal financial flows. The government should seek the cooperation of the international community to successfully tackle the problem.