Steve Agbota
A new study conducted by Global Financial Integrity (GFI), a Washington DC-based think tank has disclosed that Nigeria lost a whopping $43.9 billion ((N15.8 trillion) between 2008 and 2017 to fraudulent trade misinvoicing.
This means that the rate of trade misinvoicing as a percentage of total import/export trade for Nigeria with all of its global trading partners represent 17.9 per cent.
The report issued by GFI Communications Coordinator, Maureen Heyd, further stated that in 2017 alone, Nigeria lost $5.1 billion (N1.836 trillion) to trade misinvoicing.
The GFI report titled ‘Trade-Related Illicit Financial Flows in 135 Developing Countries: 2008-2017” and released recently, covered trade between 135 developing countries and 36 advanced economies. The further report stated that, “it is unclear where this money has gone to, but it has not been realized in tax revenues by Nigerian authorities.”
According to the report, major developing economies across the global geo-political zones were estimated to have recorded about $8.8 trillion as value gaps in their trade with developing countries over the ten-year period spanning 2008-2017.
Identified as one of the largest components of measurable illicit financial flows (IFFs) between and among 135 developing countries and 36 advanced economies, trade misinvoicing occurs when importers and exporters deliberately falsify the stated prices on the invoices for goods they are importing or exporting as a way to illicitly transfer value across international borders, evade tax and/or customs duties, launder the proceeds of criminal activity, circumvent currency controls, and hide profits offshore.
Commenting on the report, the President and CEO of GFI, Tom Cardamone, said, “developing countries are losing a significant percentage of the value of their trade transactions. Indeed, in 2017, the value gap associated with trade misinvoicing amounted to 18 percent of developing country trade.
“If the integrity of trade transactions cannot be assured, it is unlikely countries will be able to achieve the UN Sustainable Development Goals by the 2030 deadline.”
Cardamone also noted that poorer nations are often the hardest hit by misinvoicing.