By Omoh Gabriel
Nigeria is a country of several paradoxes; one of such is shadow-chasing while the real substance is left un-attended. The banking reform that has been ongoing for a while was meant to strengthen the financial system and rid the system of criminals and aleck bankers. As it seems, Nigeria in the eyes of the international community is a high risk area for money laundry. The Financial Action Task Force (FATF) blacklist now includes 17 countries. They are Bolivia, Cuba, Ethiopia, Iran, Kenya, Myanmar, Nigeria, North Korea, Sao Tome and Principe, Sri Lanka, Syria and Turkey. The grey-list includes 22 countries: Algeria, Angola, Antigua and Barbuda, Argentina, Bangladesh, Brunei, Cambodia, Ecuador, Kyrgyzstan, Mongolia, Morocco, Namibia, Nicaragua, the Philippines, Sudan, Tajikistan and, Trinidad and Tobago.
Nigeria is believed to have lost over $25 billion worth of investments as a result of the blacklisting of the nation by the FATF according to the director, Nigeria Financial Intelligence Unit (NFIU) of the Economic Finance and Crime Commission (EFCC) at a recent forum on Currency Declaration Form, organised by the Nigerian Customs Service (NCS). The forms are to be given to travelers passing through the entry points of the nation, either coming in or going out. The implication of this is that because of the fear that the country is not doing enough, no genuine investor is willing to come into the country to invest. Yet on a daily basis, federal officials inundate us with deft move by government to attract foreign investors when basic things are not in place.
These forms they are rushing to hand out at the airport to those going out or coming in has always been there. Anybody that has ever traveled in or out of the country has always been asked to declare currency holding above $5,000. When will this country’s managers ever be serious? For their own selfish interests, Nigerian leaders have not allowed institutions meant to implement these far-reaching decisions to work. It is not the forms that will clean up Nigeria’s image but the political will to do the right thing.
Why should Nigeria be on the list of the FATF if the noise about banking reforms and fight against corruption and money laundry by the EFCC are effective as Nigerians are made to believe? The truth is that Nigeria, since April last year, has once again dropped in the rating of the FATF and has been blacklisted. This means that the country’s financial system has returned to what it was in the eyes of FATF in 2006. The FATF last year expressed dissatisfaction on Nigeria’s handling of its Anti-Money Laundering (AML) policies. As a result, it classified the country, among others, as a high risk to the world’s financial system.
FATF is an inter-governmental body founded in 1989 by the G-7 to develop policies aimed at combating money laundering and terrorism financing. The FATF position on Nigeria’s anti-money laundering campaign was contained in its publication where it said Nigeria and other 30 countries of the world were posing risk, because of the way they have been handling issues relating to money laundering. Although Nigeria has put in place a high-level political commitment to work with the FATF and to address its strategic Anti Money Laundering and combating financing of Terrorism deficiencies, the FATF is not yet satisfied that Nigeria has made sufficient progress in the implementation of its action plan and that certain deficiencies remain. With the high level of corruption being exposed in the nation’s oil and gas sector, money laundering activities are going on unhindered. Every day, billions of Naira leaves Nigerian shore illegally. In its report, the FATF also called on government to consider tax evasion as a form of money-laundering offence. The agency is also extending its focus to target the non-proliferation of weapons of mass destruction. If these new dimension to money laundering is considered, Nigeria is a haven for illegal wealth.
With companies and individual evading tax on a large scale and the Boko Haram members on rampage everywhere, how can Nigeria escape the eagle eye of FATF? Are the funds used by Boko Haram not being passed through the banking system? Will Nigerian banks say they have no idea of the funding of Boko Haram? Is it not a terrorist body with local and foreign financial backing? The materials used for the bombs they make, are they not being procured? The proceeds of corruption are they not laundered out of the country?
Nigeria is expected to address these deficiencies by, among other things, adequately criminalising money laundering and terrorism financing. The FATF had recommended that Nigeria should implement adequate procedures to identify and freeze terrorist assets, which the federal authorities have not mustered up the courage to do, but are bent on negotiation. It also recommends that the country should enact and enforce relevant laws or regulations to address deficiencies in customer due diligence requirements, besides applying it to all financial institutions. The body also urged Nigeria to demonstrate that anti-money laundering supervision was being undertaken effectively within its financial sector. The FATF, whose recommendations reach more than 180 countries through regional networks, estimates that money laundering and related financial crimes cost between 2 per cent and 5 per cent of global gross domestic product (GDP) and could be more in the case of Nigeria.
The FATF had de-listed Nigeria in June 2006, and monitored the country’s progress in implementing reforms until June 2007, when the FATF ended its formal monitoring. On the basis of this progress, in June 2006 the FATF removed Nigeria from the NCCTs list. Nigeria’s implementation of its AML regime, and in particular investigations, prosecutions and convictions on corruption-related money laundering cases were going well when the country suddenly relaxed and fell back to the old ways. Nuhu Rabadu was removed unceremoniously and the EFFC has since then been unable to perform its statutory functions creditably. This country must get serious or Nigerians will continue to hide their heads in shame among their peers in international forum. What a shame!