Illicit financial flows from Nigeria, others hit $3.5tr

A report on the level of illicit financial flows in and out of Nigeria, Africa as a whole and emerging market economies has been put at between $2 trillion and $3.5 trillion yearly.

A Washington-based think-tank, Global Financial Integrity (GFI), which released the report, said Africa is the most vulnerable to the flight of capital needed for investment and other purposes.

But a poll of development economists said that sub-Saharan Africa, widely known for dependence on aid inflows and the charity of industrialised nations, is actually a net exporter of capital to the rest of the world.

The report is coming ahead of the World Economic Forum on Africa in Durban, South Africa, which will hold this week, where the region’s development and financial challenges will be in the spotlight.

It shows that combined illicit outflows and inflows amounted to 14.1 per cent to 24 per cent of total developing countries’ trade from 2005 to 2014, the last year for which comprehensive data were available.

Meanwhile, the World Bank Group affirmed that Nigeria had its fair share of the global economic challenges and frequent regulatory intervention aimed at taming money laundering, as its remittance record in 2016 declined by 10 per cent out of the $575 billion global figure.

Consequently, the remittance record to developing countries as a whole also fell for a second consecutive year, a trend that was not seen in three decades.

Specifically, flows to sub-Saharan Africa declined by an estimated 6.1 per cent to $33 billion in 2016, from about $36.3 billion in 2015 due to slow economic growth in remittance-sending countries and decline in commodity prices, especially crude oil, which impacted remittance receiving countries like Nigeria.

Also, the Acting Director of the World Bank’s Global Indicators Group, Rita Ramalho, said the diversion of remittances to informal channels due to controlled exchange rate regimes in Nigeria affected the remittance records.

While Nigeria lost by 10 per cent, Bangladesh fell by 11.1 per cent and Egypt, 9.5 per cent, with exceptions among major remittance recipients being Mexico and the Philippines, which saw inflows increase by 8.8 per cent and 4.9 per cent.

Minister of Finance, Mrs. Kemi Adeosun, had reiterated her call on the global community to play by action rather than mere declarations on the issues of corruption and illicit financial flows, particularly from Nigeria and Africa as a whole.

Adeosun, at the just-concluded International Monetary Fund (IMF)/World Bank Group meetings in Washington DC, flayed assessed complacency among developed countries, which serve as haven for proceeds of the ugly trend.