By ABBAS ABUBAKAR UMAR
There is no denying the fact that corruption is one of the greatest challenges confronting the African continent. And as a result of illicit financial flows, corruption has continued to make a negative impact on the stability, economy and peace of many countries, especially developing countries. Since illicit financial flows involve moving ill-gotten funds from one country to another, fighting it becomes harder due to the stringent measures and different laws set by different countries. Technology also plays a vital role in the fight against illicit financial flows.
While other challenges like insecurity, terrorism, human-trafficking can be faced head-on, but because the challenge corruption poses is daunting and pervasive, it deprives governments of resources needed to fight other challenges and to provide sustainable development to citizens. Simply put, illicit financial flows are illegal movements of funds, money or capital from one country to another.
It is when funds are illegally earned, transferred and or utilized across an international border. Mostly, these funds are transferred from developing countries to already developed countries and as a result, the developed countries set up stringent laws, rules and regulation that will make it hard for repatriation of the stolen fund.
Ways by which these funds are illegally transferred include a drug cartel using trade-based money laundering techniques, a corrupt public official using anonymous company to transfer dirty money to another country, human trafficking syndicate and a member of a terrorist organisation wiring money as well as wire transfer using technology and changing the funds into e-coins.
What we have witnessed in Nigeria is that corrupt government officials and their private sector collaborators use fronts and ownership structures that do not provide sufficient information about the true nature and identities of the persons behind the illicit funds and transfer same to safe havens in foreign lands. This, alone, makes it hard for anti-corruption agencies like the Economic and Financial Crimes Commission, EFCC, to combat this menace.
The problem is not only about anonymity, but also the lack of transparency on the part of the foreign countries where the monies are taken to. Influential government officials use their position to steal government resources and extract maximum rent from the country’s mineral resources with minimum or no benefit to the Nigerian citizens. Billions of dollars are lost annually in royalties and fees for licenses which politically-connected individuals appropriate to themselves using fronts and secret ownership arrangement.
Nigeria, like many other developing countries, have greatly suffered from the many evil hands of corruption, both from within and outside. The implication is that the monies which should otherwise be used in Nigeria for development projects are stolen and taken to other countries which are already developed for investment purposes and Nigeria will be left with nothing to show.
Prevention and the need to be proactive in this fight plays a vital role in ensuring that funds and assets are not stolen and taken out of the country in the first place. Explaining ways by which illicit financial flows can be tamed, the Chairman of the EFCC, Abdulrasheed Bawa, stated that there is need to ensure that corrupt officials don’t even have the opportunity to take these fund out.
“It is one thing for the properties to be taken to the UAE and the UK, it is another thing that we here in Nigeria are ensuring that you don’t have the opportunity to take them out in the first place. That is why we want to be proactive in our approach to law enforcement and the fight against corruption in this country,” he said.
Another way of fighting illicit financial flows is identification and repatriation of these proceeds of crime, especially assets. This task is not easy because it involves the countries where the assets and funds are taken to. Because these countries too have their laws, processes and procedures and this is where bilateral and multi-lateral agreement plays a role. Countries involved need to sit on the same table to discuss issues of information gathering, sharing, investigation as well as repatriation of these ill-gotten assets.
There is need for a multifaceted effort in addressing the issue of illicit financial flows and adoption of the 2030 agenda which provides path to financial integrity for sustainable development; showing how to redirect the resources lost from illicit flow to finance the implementation of the 2030 agenda and the achievement of the sustainable development goals. There is also the need to strengthen regional and international systems which will create a strong legal, taxation and financial justice system.
There is also the need for enabling implementation which should be time-bound, relevant policy and strategic implementation, including allocation of resources for asset recovery activities, enhanced intra-continental cooperation and communication and experience sharing, and domestic and regional.
*Umar, a financial expert, wrote from Jabi, Abuja.