How Nigeria is combating illicit financial flows — Official

Minister of Finance, Kemi Adeosun
Minister of Finance, Kemi Adeosun

The Nigerian government on Tuesday said some ongoing initiatives to promote financial transparency and accountability in the system were part of efforts to curb illicit financial flows in the country.

Findings by a high level African Union panel led by the former South African President, Thabo Mbeki said losses traced to Illicit financial flows cost Africa an estimated $50 billion annually.

Recent data showed loses have continued to grow mainly due to trade malpractices, abusive transfer pricing schemes, criminality, corruption and outright theft of the continent’s natural resources.

The Special Adviser on Economic Matters, Office of the Vice President, Adeyemi Dipeolu, said the Nigerian government has continued to implement some of the recommendations in a special declaration by African Heads of State and Government on the issue.

Mr Dipeolu was speaking at the workshop on the “Role of Parliaments in Combating Illicit Financial Flows from Africa” organized by the African Development Bank (AfDB) in Abuja.

Some of the initiatives by Nigeria to curb illicit financial flows, he said, include introduction of a single windows trade platform in all of the country’s ports of entry and ensuring company registration and the Federal Inland Revenue Service (FIRS) were linked to the Corporate Affairs Commission (CAC) website.

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Others include introduction of the Voluntary Assets and Income Declaration Scheme (VAIDS), a tax amnesty scheme for tax offenders; the Bank Verification Number (BVN) scheme; enactment of law granting independence to the National Financial Intelligence Unit against money laundering and related crimes.

Also, the signing of the multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting as well as common reporting standard multilateral competent authority agreement to continue the convention on mutual assistance in tax matters.

Mr Dipeolu underlined the need for a strong political will and cooperation among African leaders and interest groups to continue the implementation of the recommendations of the high level panel.

He said the workshop would provide the platform to bring key issues about illicit financial flows to the attention of lawmakers considered among political leaders capable of helping tackle the problem in the continent.

“Legislators are very much needed if Africa is to successfully tackle the scourge of illicit financial flows. They are representatives of the people and moulders and shapers of public discourse,” he said.

The lawmakers, the Adviser noted, were not only required to pass domestic legislation on illicit financial flows, but also to contribute to a global effort to tackle the problem, by encouraging their colleagues in the Inter-Parliamentary Union and other related fora to support such efforts.

Highlighting the negative impact of illicit financial flows, Mr Dipeolu said African countries’ resources needed for development have not only been reduced, it contributes to undermining good governance, exacerbates conflict, deepen inequality and weaken international development cooperation.

He stressed the need to continue promoting transparency; ensure closer monitoring of the commercial routes of illicit financial flows and increased efforts at asset recovery and repatriation.

Transparency, he pointed out, was important considering that the main motivation of most perpetrators of illicit financial flows was to hide wealth from tax authorities and law enforcement agencies.

President of AfDB, Akinwumi Adesina, said the workshop was organized by the Bank in view of its understanding of the fundamental role of the legislature in promoting economic recovery and sustainable development. He was represented by AfDB Senior Nigeria Country Director, Ebrima Faal.

Apart from their constitutional mandate to oversee government and hold government to account, Mr Adesina said the legislature also promote good economic and financial governance through effective oversight of the public budget and expenditure management.

He said the AfDB would continue to support the capacity building of African Parliaments, to help strengthen their oversight function and promote good economic governance in the regional member countries.

“The AfDB strongly supports Africa’s economic efforts; including efforts to stem corruption, improve transparency, and strengthen fiscal consolidation and efficiency,” Mr Adesina said.

He said the strategic framework and action plan for the prevention of illicit financial flows in Africa approved in April 2017 was anchored on strengthening the capacity of the Bank’s regional member countries and regional economic communities to fight the menace of illicit financial flows.

The workshop organized for lawmakers, judges, prosecutors, law enforcement officers, and related officials in Africa, he said, was to help build the capacity of regional interest groups against illicit financial flows.

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