October 12, 2018

FG moves to stop illicit financial outflows by oil companies


By Emeka Anaeto & Emma Ujah, Bali Indonesia

The federal government has opened discussions with the World and the International Monetary (IMF) on how to checkmate International Oil Companies (IOCs) involved in Illicit Financial Flows (IFFs) out of the country.

The Minister of Finance, Hajiya Zaina Ahmed, who led the Nigerian delegation to the on-going Annual Meetings of the Bretton Woods Institutions in Bali, Indonesia said that the IFFs must be stopped to make more resources available for the nation to more properly address it developmental needs.

She said that IOCs were responsible for as high as about 70 per cent of such illegal financial flows out of the continent, citing the Thabo Mabeki Committee report on the menace.

Her words, “We had the G-24 meeting top officials of the World Bank and the IMF. Essentially that meeting was for us to ask them questions and for them to respond how to better provide support for us.

“For us in Nigeria, what we asked for was how they can help us in fashioning out instruments that can help us pursue taxes especially from very large corporates like International Oil Companies.

“In Nigeria, our greatest tax potentials are from the IOEs that operate in the oil and gas sector. Yet this is an industry that from the report of the Thabo Mbeki “Committee shows that about 70 percent of the Illicit Financial Flows out of Africa is related to that industry.

“We did ask them (World Bank/IMF) to look at how we can prevent Transfer Pricing and how we can stop the flows that go out of that sector because these are revenue that we can use to enhance our development.”

Nigeria’s FDIs advantage

The Nigerian delegation also met international investors to persuade them to invest in the country.

Fielding questions from journalists on the meeting, the minister said investors were enthusiastic about coming to invest in Nigeria, especially given the high comparative advantage by doing so.

Hajiya Ahmed identified a double-digit rate of return on investment as one critical point that sets Nigeria above other countries of the world, in that regard.

She said, “We had a meeting with investors from different parts of the world. We told them the Nigerian story- that Nigeria is a very good place to do business and that the return you get from Nigeria is far above what you get elsewhere.

“If an investor takes his resources to the US, for instance, he gets probably a 4 per cent return, but in Nigeria, he can get up to 13 or 14 per cent return.

“It was very well-received. There was a lot of interest and because for that we are very confident that the next Euro Bond that we are trying to raise will have a good outing.”