Money stolen from Nigeria yearly through organised Illicit Financial Flows (IFFs) may provide almost 62 per cent of the funds needed to finance the 2019 budget.

President Muhammadu Buhari last week signed into law the 2019 appropriation bill of N8.916 trillion after the National Assembly had increased it from N8.826 trillion. At the time, Nigeria’s share of global IFFs ($18 billion/N5.5 trillion) was only a little lower than the N6.97 trillion total revenue the country needed to fund the budget.

The education sector is in decline, with the country accounting for the highest number of about 23,000 lecturers who leave the continent every year. Meanwhile, the $18 billion IFFs is twice the N3.90 trillion allocated to the sector in the past 10 years (2009-2018) from a total budget of N55.19 trillion.

In 2009, the budget for education was N221.19 billion, N249.09 billion (in 2010), N306.3 billion (2011), N400.15 billion (2012) and N426.53 billion (2013). It was N493 billion in 2014, 392.2 billion (2015), N369.6 billion (2016) N550 billion (2017) and N605.8 billion in 2018, bringing the figure to N3.90 trillion, which is about N2 trillion lower than the yearly IFFs.

A report released earlier this year by the Nigeria Extractive Industries Transparency Initiative (NEITI) and Trust Africa indicates that Nigeria loses between $15 billion and $18 billion yearly to IFFs. Over 92 per cent of the crime is reportedly committed in the oil and gas sector.

Partnership for African Social and Governance Research (PASGR) in a report had noted that oil-exporting countries like Nigeria are vulnerable to illicit financial transfers. This is coming at a time when the Economic Commission for Africa reported that the United States accounted for 29.0 per cent of IFFs from Nigeria; Spain accounted for 22.5 per cent; France, 8.7 per cent; Japan, 8.5 per cent; and Germany, 7.7 per cent. The five countries, which contributed 76.4 per cent of total IFFs from Nigeria from 1970-2008, were the key destinations of Nigeria’s oil products at that time.

READ  99 Nigerians were killed by Gambia Ex-president:Femi Falana speaks

IFFs are a form of illegal capital flight that occurs when money is illegally earned, transferred, or spent, especially as the money disappears from any record in the country of origin and earnings on the stock of illicit financial flows outside a country, and does not return to the country of origin.

Based on the Central Bank (CBN) interbank rate of N306 to one dollar, the $18 billion IFFs is N5.490 trillion (approximately N5.5 trillion) and totalled about 61.57 per cent of Nigeria’s N8.916 trillion budget.

NEITI’s revelation is corroborated by a United Nations report on ‘Illicit Financial Flows and the Problem of Net Resource Transfers from Africa: 1980–2009’, which says that between 1980 and 2009, nothing less than $1.2 trillion to $1.4 trillion left Africa. This figure is half of the current Gross Domestic Products (GDP) of the continent.

The report notes further that multinational and national oil companies, public office holders, elites, smugglers of commodities and others swindle the country through trade mis-invoicing, tax evasion and trade underpricing, thereby deleting trade records from countries of origin and destinations.

“Fuel exporters accounted for nearly half of illicit financial flows between 1970 and 2008. The illicit flows were driven by oil price increases during this period. The literature suggests that trade mis-invoicing varies between products depending on their characteristics. Thus, high value, low weight products such as gold and diamonds can be easily smuggled. Also, goods such as artisanal mining, which are produced through largely informal means, are also more vulnerable to trade mispricing.”

READ  Ihedioha Knows Nothing About Govering:Uche Nwosu Says

The report adds that Africa’s current losses to IFFs outweigh the continent’s aid and foreign direct investment combined.
Meanwhile, stakeholders in the oil and gas, and financial services sectors, have expressed concern that the development could spell doom for the country by crippling budget implementation and general development.

Dr. Otive Igbuzor, member of the Nigeria Natural Resource Charter’s Expert Advisory Panel and founding executive director of the African Centre for Leadership, Strategy and Development (Centre LSD), warned that the situation could lead to loss of government revenue through tax evasion, promote illegal activities and criminality, give opportunity for people to steal the resources of the country through illegal resource exploitation, and slow down economic growth and development.

Nigeria, like other African countries, is faced with a plethora of challenges propelled by leakages such as IFFs. Currently, the country’s total debt profile has risen to N24.387 trillion as the number of poor Nigerians rose to 91 million. The unemployment figure is 20.9 million. The Securities and Exchange Commission (SEC) had recently said the nation’s infrastructure deficit would hit $878 billion by 2040.

Considering that the nation’s population is projected to hit 263 million by 2030, Prof. Segun Ajibola, former Chairman of Council, Chartered Institute of Bankers of Nigeria and Dean, College of Postgraduate Studies, Caleb University, said leakages such as IFFs could further increase poverty level, cripple economic growth, worsen the debt profile and the health system, and make the realisation of Sustainable Development Goals impossible.

The Director of the Centre for Democracy and Development (CDD) Idayat Hassan regretted that multinational organisations and developed countries that benefit from the flows were encouraging the practice.

READ  Abiola Contribution Was Heroic And Exemplary:Bauchi State Governor

The Technical Adviser to NEITI Dauda Garuba said: “The implications of IFFs are huge. They drain the country. They kill the spirit of patriotism and undermine development. Above all, they breed and expose citizens to squalor and underdevelopment as much as they bruise their psyche and confidence to stand up with their supposed peers in the comity of nations.

“If you want to deal with the challenge of illegal oil bunkering, look beyond the small boys and girls, who are refining fuel in the creeks; the majority of them are working for highly placed Nigerians.”The protem president, Chartered Institute of Forensic and Investigative Professionals of Nigeria (CIFIPN), Dr. Victoria Enape, said the Nigerian government is not only relying on the wrong approach to tackling IFFs but also failing to demand justice or take advantage of laws and treaties.

“Most of the people perpetrating IFFs have their ways because they get smarter by the day. That is why we must advance our technologies to catch up with them,” she added.

LEAVE A REPLY

Please enter your comment!
Please enter your name here