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Oil Sector Tops $218bn Illicit Financial Flows From Nigeria

The oil and gas sector of the Nigeria economy is responsible for 92.9 per cent of illicit financial flows (IFF) with over $217.7 billion said to have flowed out of the country between 1970 and 2008.

This is contained in report entitled, “Averting Illicit Financial Flows in Nigeria’s Extractive Industry,” released yesterday by the Nigeria Extractive Industries Transparency Initiative (NEITI).

The report, which was supported by Trust Africa, showed that oil bunkering also accounted for about 35 per cent, while commercial transactions in the form of tax evasion, money laundering and transfer pricing by multinationals that dominate the sector account for more than 60 per cent of Nigeria’s illicit financial flows.

In his speech, the executive director of NEITI, Mr. Waziri Adio, commended Trust Africa for supporting the project and DataPro for compiling the data, stressing that the issue of illicit financial flows is now getting the required public attention.

He noted that there are all kinds of reports about how countries are bleeding for different kind of reasons.

“There was a report by One Campaign in 2014, entitled ‘The $1 Trillion Scam’ which talks about how countries from developing world lose up to $1 trillion annually through numerous webs of corrupt activities and shady deals in natural resources. Just imagine what those countries can do with such money,” he said, lamenting that the countries involved are being deprived necessary resources for development.

According to him, the Thabo Mbeki report, which focused on Nigeria, said that between 1970 and 2008, a period of 38 years, Nigeria lost a total of $217 billion to illicit financial flows. On average, this is about $5 billion per year.

Adio added that the latest Thabo Mbeki report, that of 2018, put Africa’s losses at between $50 to $60 billion per year, with Nigeria accounting for 30 per cent of the amount.

“That means Nigeria is losing between $15 and $18 billion every year to illicit financial flows. That is not a small amount of money by any stretch of the imagination. Just think of what difference that could have made to all the things that matter to us in this country,” he said.

On his part, the acting chairman, Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, said the only way the anti corruption war could be successful was to make it a collaborative one that would involve all the citizens and institutions.

He commended NEITI for its work and stated that the commission was doing everything possible to win the fight against corruption in the country.

The EFCC chairman who was represented by the director, Policy, Planning and Strategy, in the commission, Dr. A. Gusau, emphasised the need to sensitise Nigerians on the need to eliminate corruption from the society.

“We believe that we cannot achieve everything without the cooperation of the citizens. For that reason, the EFCC has collaborated with the judiciary. We started joint seminars together with the judiciary which has made them understand what we are doing and has helped us carry out our jobs better,” he said.

Also speaking, the representative of Trust Africa, Mr. Chinedu Nwangu, said the initiative was part of efforts to support the government’s anti corruption drive.

Meanwhile, the report identified ways of mitigating the risk of illicit financial flows to include: transparency and accountability instruments, certificates of validation, enforcement of existing global governance regulation, collaboration approach, taxation instruments, adoption of technology and automation, and effective, proportionate and dissuasive sanctions regime.

SOURCE: Leadership