Nigeria’s $217bn illicit outflows


The revelation last week by the Economic and Financial Crimes Commission (EFCC) that Nigeria has recorded illicit financial outflows of $217.7 billion in 38 years, specifically between 1970 and 2008, is quite alarming. It explains the extent to which corruption has wreaked havoc on the country including plunging her into economic recession and the classification as the world’s poverty capital.

The Acting Chairman of EFCC, Ibrahim Magu, said that the various investigations, arrests, prosecution and assets recoveries over the years had confirmed that the level of corruption in Nigeria had been truly staggering. Magu, represented by its Acting Spokesperson, Tony Orilade, made the comments at a one-day conference organised by Online Publishers Association of Nigeria with the theme: “Free press and objective reporting in the 2019 election year.”

 The EFCC boss said corruption in Nigeria was being perpetrated by individuals and groups both in the private and public sectors. He identified former state governors, ministers, high ranking military officers, chief executives of parastatals and top bureaucrats in state and federal agencies as culprits involved in the public sector theft. Magu said, “The alarming rate of corruption committed by these unpatriotic elements can be partly seen in the number of convictions secured by the EFCC from Nigerian courts since I assumed duty as the head of the commission in 2015.

 “The figure stands at 103 in 2015, 195 in 2016, 189 in 2017 and 312 for the period of January to December 2018. The total figure for the period of 2015 to 2018 is a mind-blowing 799 convictions. In the process of such convictions, the EFCC recovered N794.5 bilion, $261 million, £1.1 million, €8.1 million and CFA86, 500.

“One of the most graphic ways through which the absence of democratic accountability manifests itself in Nigeria today is through the prevalence of rampant corruption at all levels of governance. For example, Transparency International reported that Nigeria was the most corrupt country in the world for years: 1996, 1997, 2000 and second in the line for remaining years up to 2003.

 “In February 2015, a high-level panel on illicit financial flows from Africa constituted by the African Union, under the chairmanship of a former President of South Africa, Thabo Mbeki, revealed that Nigeria ranked first among ten African countries by cumulative illicit financial flows between 1970 and 2008.

The total outflow from Nigeria for the period was $217.7 billion constituting about 30.5 per cent of Africa’s total share.” Illicit financial outflows are facilitated by some international tax havens that permit creation of disguised corporations – shell companies, anonymous trust accounts, and fake charitable foundations which in most cases are cover for corruption, terrorism financing, tax evasion and money laundering.

 It is in the context of this, that the subject of Illicit financial flows has gained global attention as a critical area that needs international collaboration and cooperation and a multistakeholder approach to be effectively tackled.

The adverse effects of illicit financial outflows include, drain on Nigeria’s foreign exchange reserves, reduced tax revenue, stifled trade and investment inflows and a weakening of the financial system of the victim countries (African countries in particular).

The complex nature of corruption and money laundering investigations generally require assets recovery efforts beyond domestic borders. Where stolen assets have been stashed abroad, successful tracing and recovery of such asset often depends on assistance from foreign jurisdiction which makes international cooperation essential for the successful recovery of assets.

It is in this context that we commend Nigeria’s anti-graft agency for its efforts in tracking and recovery of humongous amount of illicit funds stashed at home and overseas, particularly the $322 million Abacha loot repatriated by Switzerland, the returning by the United Kingdom of assets worth $85 million from the controversial $1.3 billion USD Malabu deal which revolves around “OPL 245” believed to be the most valuable oil field in West Africa in a case that is being described as the largest corruption scandal ever witnessed in global oil industry involving Malabu Oil and Gas and oil giants Shell and ENI.

However, it is expedient for the Buhari administration to intensify efforts towards improving domestic resource mobilisation and develop a national compact against illicit financial flow out of Nigeria as a major strategy in the fight against corruption. Domestic resource mobilisation and utilisation is sine qua non for driving sustainable broad-based economic growth, development and transformation.

There is also the need for Nigeria to strengthen her international collaboration and cooperation as well as adopt multi-stakeholder approach like the Global Forum on Asset Recovery, GFAR, and multi-lateral treaties including the United Nations Convention Against Corruption (UNCAC) in order to effectively tackle illicit financial outflows and their debilitating effects on the country

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