Illicit Financial Flows: Africa loses $148bn to Corruption Yearly, Says AGF, Malami

The Attorney General of the Federation and Minister of Justice,
Abubakar Malami, SAN, has said that developing countries in Africa
lose over $148 billion to corruption annually partly due to Illicit
Financial Flows (IFFs).

Malami, who spoke at the International Conference on IFFs and
Asset Recovery organised by the Independent Corrupt Practices and
Other Related Offences Commission (ICPC), also disclosed that over
$700 million stolen funds from Nigeria have been returned to the
country in the last four years.

He said, “Nigeria, through proactive and collaborative efforts
with other countries has recovered and ensured the return of over
$700 million from the United States, the United Kingdom, Bailiwick
of Jersey, Switzerland, and Ireland in the past four years. We are
still working with our international partners and other countries
to ensure that all Nigeria’s assets that are identified are
recovered.”

The Minister, who was represented at the conference by the
Senior Special Adviser to the President on Justice Sector Reforms,
Barr. Juliet Ibekaku-Nwagwu, expressed worries that IFFs have
become rife and growing at 20.2 percent annually in Africa because
of weak national and regional capacity to stem the tide.

He lamented that the illicit movement of huge funds out of
Africa has resulted in underdevelopment and insecurity across the
continent.

His word, “No doubt, the impact of such criminal flow of funds
means lack of health and education services, low levels of growth,
high level of poverty and lack of infrastructure in many African
countries.”

The ICPC Chairman, Prof. Bolaji Owasanoye, in his welcome
address, noted that the effect of IFFs on developing countries in
Africa was huge.

He stressed that the need to tackle the menace, which falls
under the mandate of the Commission, has become paramount in order
to shore up the dwindling revenue of the Federal Government.

He said, “Estimates of the quantum of IFFs lost globally varies,
but it is generally agreed that a significant proportion of the
loss is suffered by developing countries. African countries are
particularly affected by loss through IFFs thus depriving the
continent of much-needed resources for development.”

Also speaking at the conference, the Minister of Foreign
Affairs, Geoffrey Onyeama, who was represented by the Permanent
Secretary of the Ministry, Ambassador Gabriel Aduda, said the
Ministry was working assiduously to ensure the return of stolen
funds and assets to Nigeria.

Onyeama said IFFs was responsible for many of the societal ills
and underdevelopment the country is grappling with, adding that the
Federal Government has put in place measures to block illicit
outflows of funds.

He said, “Illicit Financial Flows deny developing countries of
vital resources that belong to them; resources that should have
been spent on their development priorities. It reduces tax
revenues, hinders development endeavours, undermines constituted
authorities and threatens the stability and sustainable development
of all affected states.

“IFFs also provide the financial network that supports terrorist
activities, fuels conflict and leads to internal displacement and
refugees conditions, divert money from public priorities, and
hampers government effort to mobilise domestic resources.

“The most effective deterrent remains to ensure that proceeds of
IFFs are recovered and returned to countries of origin. It is for
this reason that the government of Nigeria will continue to call on
leaders whose countries are the main destination for IFFs to take
concrete steps to prevent and stop the receipt of such funds into
their countries, assist in tracing, freezing, seizing and returning
illicit assets and its proceeds, already in their countries.”

The Minister reiterated that Nigeria will not succumb to any
stringent conditions as it fights to ensure the return of funds and
assets stolen from the country by corrupt people.

According to him, “Let me also add that any imposition of tough
conditions for returning proceeds of illicit origin, in the face of
the current financial difficulties and the economic hardship and
recession occasioned by the rampaging impact of COVID-19 pandemic
would be counter-productive. I, therefore, encourage
representatives of countries of destination to consider waiving, or
reducing to the barest minimum, the processes and costs of
recovery.

“Nigeria’s delegation will continue to initiate and negotiate,
on behalf of all developing countries, resolution on IFFs, with
emphasis on asset recovery and return within the United Nations
system.

“Our diplomats will remain bold and assertive in telling
representatives of countries whose policies assist in habouring
proceeds of IFFs that their actions and or inactions affect the
lives of millions of people and deprive developing countries of
resources required to achieve the 2030 Agenda for sustainable
development.”

On her part, the Minister of Finance, Budget and National
Planning, Dr. (Mrs) Zainab S. Ahmed, stated that unless tackled,
IFFs would continue to hamper economic development across the
continent including Nigeria.

Dr. Ahmed, who was also represented by the Permanent Secretary
(Special Duties) in the ministry, Alhaji Aliyu Shinkafi, called for
mutual cooperation between Africa and countries of destination of
IFFs, while stressing that leadership and political will are key in
addressing the issue of illicit financial flows.

The first plenary session of the conference featured a
presentation on International Asset Recovery: Milestones and
Challenges delivered by Barr. Juliet Ibekaku-Nwagwu, Senior Special
Adviser to the President on Justice Sector Reforms.

She said that some of the challenges of implementing
international asset recovery, according to the 2020 IRG/COSP
report, were that most states are yet to adopt the
non-conviction-based approach; and most still do not have a legal
mechanism to cover compensation for alleged victims.

She also revealed that issues related to dual criminality and
lack of explicit filing requests still present a significant
challenge in many of the reviewed states; and that while many
states foresaw the need for the return of proceeds of corruption
through asset sharing agreement, many were found not to have
mechanisms for victim compensation and protection of bonafide third
parties.

She then recommended, amongst other things, that the weakness in
national systems should be addressed by enacting laws, continuous
dialogue, training, exchanging information and sharing best
practices.

In his contribution, Mr. Olanrewaju Suraj, Chairman, Human, and
Environmental Development Agency, HEDA, said that the political
will of African states was important in stemming the tide of IFFs
while suggesting serious and aggressive combat of the menace.

Mr. Suraj who opined that some governments in Africa had shares
in the big companies that engage in IFFs thereby slowing down the
progress of stopping it, charged victim countries to challenge
beneficiary countries as encouragers of IFFs.

He suggested that law enforcement agencies, Civil Society
Organisations of victim states should collaborate with their
counterparts in beneficiary states in order to achieve the right
pressure.

Rev. David Ugolor, Executive Director, Africa Network for
Environment and Economic Justice, ANEEJ, in his contribution at the
international conference, mentioned some milestones of successful
collaboration between Nigeria and other jurisdictions such as
Switzerland, UK, US, etc.

On challenges, Rev. Ugolor listed the non-passage or delay in
the passage of the Proceeds of Crime Act (POCA); misunderstanding
and doubt as to whether recovered loot should be returned to its
state of origin, like in the Ibori case; and synergy amongst
anti-corruption agencies.

He then recommended that the POCA should be considered and
passed to give a clear framework for dealing with returned funds;
and a sustained cooperation with international communities etc.

The second plenary session was on IFFs and the Development
Dilemma and the lead presentation was by Prof. Melvin Ayogu, a
US-based consultant on IFFs.

He started by charging partner countries not to condone IFFs if
they actually wish to help Africa.

He advised governments to depend less on foreign aid by looking
inwards and developing especially the Small and Medium Enterprises,
SMEs which will help to increase the government’s tax buoyancy.

Prof. Ayogu also said Private-Public Partnership should be
explored especially the areas of ICT and infrastructure which
should all be carried out with commitment and transparency.

In her own contribution on the Role of the Enablers, Ambassador
Manorma Soeknandan shared some experiences of the Caribbean
community which consists of 3 continental member-states and 11
English-speaking island member-states.

She said the Regional Security System (RSS) Asset Recovery Unit
was set up in 2015 to tackle serious organized crime in the
Caribbean Common Law jurisdictions through partnership and the
robust application of proceeds of crime and money laundering
legislation.

She revealed some achievements of the Unit to include: US$ 26.8
m of criminal assets identified and restrained; US$ 7.5m forfeited
by the courts using cash seizure provisions; 85 persons charged
with money laundering offences etc.

She said that the enablers were mostly educated persons
(accountants, lawyers, politicians, etc.) who knew the loopholes,
the people and the culture/mindset of the people and also who had
the budget to calculate the “corruptive practices”.

On Beneficial Ownership, Thom Townsend, Executive Director, Open
Ownership, UK, said his organisation was working in partnership
with the World Bank to support the Corporate Affairs Commission,
CAC, with the goal to remove technical and usability barriers to
compliance; ensure usable data by agencies and businesses and CSOs
are available.

He recommended that there was the need to draw a growing
diversity of international best practices; integrate discussion
about business owners’ disclosure into other policy areas to grow
awareness and popularize the issue of disclosure of true company
ownership information and finally to use the data that was made
available.

The virtual Illicit Financial Flows conference is a 2-day event
by ICPC in collaboration with the AU-ABC and Coalition for Dialogue
in Africa (CoDA).

The Attorney General of the Federation and Minister of Justice,
Abubakar Malami, SAN, has said that developing countries in Africa
lose over $148 billion to corruption annually partly due to Illicit
Financial Flows (IFFs).

Malami, who spoke at the International Conference on IFFs and
Asset Recovery organised by the Independent Corrupt Practices and
Other Related Offences Commission (ICPC), also disclosed that over
$700 million stolen funds from Nigeria have been returned to the
country in the last four years.

He said, “Nigeria, through proactive and collaborative efforts
with other countries has recovered and ensured the return of over
$700 million from the United States, the United Kingdom, Bailiwick
of Jersey, Switzerland, and Ireland in the past four years. We are
still working with our international partners and other countries
to ensure that all Nigeria’s assets that are identified are
recovered.”

The Minister, who was represented at the conference by the
Senior Special Adviser to the President on Justice Sector Reforms,
Barr. Juliet Ibekaku-Nwagwu, expressed worries that IFFs have
become rife and growing at 20.2 percent annually in Africa because
of weak national and regional capacity to stem the tide.

He lamented that the illicit movement of huge funds out of
Africa has resulted in underdevelopment and insecurity across the
continent.

His word, “No doubt, the impact of such criminal flow of funds
means lack of health and education services, low levels of growth,
high level of poverty and lack of infrastructure in many African
countries.”

The ICPC Chairman, Prof. Bolaji Owasanoye, in his welcome
address, noted that the effect of IFFs on developing countries in
Africa was huge.

He stressed that the need to tackle the menace, which falls
under the mandate of the Commission, has become paramount in order
to shore up the dwindling revenue of the Federal Government.

He said, “Estimates of the quantum of IFFs lost globally varies,
but it is generally agreed that a significant proportion of the
loss is suffered by developing countries. African countries are
particularly affected by loss through IFFs thus depriving the
continent of much-needed resources for development.”

Also speaking at the conference, the Minister of Foreign
Affairs, Geoffrey Onyeama, who was represented by the Permanent
Secretary of the Ministry, Ambassador Gabriel Aduda, said the
Ministry was working assiduously to ensure the return of stolen
funds and assets to Nigeria.

Onyeama said IFFs was responsible for many of the societal ills
and underdevelopment the country is grappling with, adding that the
Federal Government has put in place measures to block illicit
outflows of funds.

He said, “Illicit Financial Flows deny developing countries of
vital resources that belong to them; resources that should have
been spent on their development priorities. It reduces tax
revenues, hinders development endeavours, undermines constituted
authorities and threatens the stability and sustainable development
of all affected states.

“IFFs also provide the financial network that supports terrorist
activities, fuels conflict and leads to internal displacement and
refugees conditions, divert money from public priorities, and
hampers government effort to mobilise domestic resources.

“The most effective deterrent remains to ensure that proceeds of
IFFs are recovered and returned to countries of origin. It is for
this reason that the government of Nigeria will continue to call on
leaders whose countries are the main destination for IFFs to take
concrete steps to prevent and stop the receipt of such funds into
their countries, assist in tracing, freezing, seizing and returning
illicit assets and its proceeds, already in their countries.”

The Minister reiterated that Nigeria will not succumb to any
stringent conditions as it fights to ensure the return of funds and
assets stolen from the country by corrupt people.

According to him, “Let me also add that any imposition of tough
conditions for returning proceeds of illicit origin, in the face of
the current financial difficulties and the economic hardship and
recession occasioned by the rampaging impact of COVID-19 pandemic
would be counter-productive. I, therefore, encourage
representatives of countries of destination to consider waiving, or
reducing to the barest minimum, the processes and costs of
recovery.

“Nigeria’s delegation will continue to initiate and negotiate,
on behalf of all developing countries, resolution on IFFs, with
emphasis on asset recovery and return within the United Nations
system.

“Our diplomats will remain bold and assertive in telling
representatives of countries whose policies assist in habouring
proceeds of IFFs that their actions and or inactions affect the
lives of millions of people and deprive developing countries of
resources required to achieve the 2030 Agenda for sustainable
development.”

On her part, the Minister of Finance, Budget and National
Planning, Dr. (Mrs) Zainab S. Ahmed, stated that unless tackled,
IFFs would continue to hamper economic development across the
continent including Nigeria.

Dr. Ahmed, who was also represented by the Permanent Secretary
(Special Duties) in the ministry, Alhaji Aliyu Shinkafi, called for
mutual cooperation between Africa and countries of destination of
IFFs, while stressing that leadership and political will are key in
addressing the issue of illicit financial flows.

The first plenary session of the conference featured a
presentation on International Asset Recovery: Milestones and
Challenges delivered by Barr. Juliet Ibekaku-Nwagwu, Senior Special
Adviser to the President on Justice Sector Reforms.

She said that some of the challenges of implementing
international asset recovery, according to the 2020 IRG/COSP
report, were that most states are yet to adopt the
non-conviction-based approach; and most still do not have a legal
mechanism to cover compensation for alleged victims.

She also revealed that issues related to dual criminality and
lack of explicit filing requests still present a significant
challenge in many of the reviewed states; and that while many
states foresaw the need for the return of proceeds of corruption
through asset sharing agreement, many were found not to have
mechanisms for victim compensation and protection of bonafide third
parties.

She then recommended, amongst other things, that the weakness in
national systems should be addressed by enacting laws, continuous
dialogue, training, exchanging information and sharing best
practices.

In his contribution, Mr. Olanrewaju Suraj, Chairman, Human, and
Environmental Development Agency, HEDA, said that the political
will of African states was important in stemming the tide of IFFs
while suggesting serious and aggressive combat of the menace.

Mr. Suraj who opined that some governments in Africa had shares
in the big companies that engage in IFFs thereby slowing down the
progress of stopping it, charged victim countries to challenge
beneficiary countries as encouragers of IFFs.

He suggested that law enforcement agencies, Civil Society
Organisations of victim states should collaborate with their
counterparts in beneficiary states in order to achieve the right
pressure.

Rev. David Ugolor, Executive Director, Africa Network for
Environment and Economic Justice, ANEEJ, in his contribution at the
international conference, mentioned some milestones of successful
collaboration between Nigeria and other jurisdictions such as
Switzerland, UK, US, etc.

On challenges, Rev. Ugolor listed the non-passage or delay in
the passage of the Proceeds of Crime Act (POCA); misunderstanding
and doubt as to whether recovered loot should be returned to its
state of origin, like in the Ibori case; and synergy amongst
anti-corruption agencies.

He then recommended that the POCA should be considered and
passed to give a clear framework for dealing with returned funds;
and a sustained cooperation with international communities etc.

The second plenary session was on IFFs and the Development
Dilemma and the lead presentation was by Prof. Melvin Ayogu, a
US-based consultant on IFFs.

He started by charging partner countries not to condone IFFs if
they actually wish to help Africa.

He advised governments to depend less on foreign aid by looking
inwards and developing especially the Small and Medium Enterprises,
SMEs which will help to increase the government’s tax buoyancy.

Prof. Ayogu also said Private-Public Partnership should be
explored especially the areas of ICT and infrastructure which
should all be carried out with commitment and transparency.

In her own contribution on the Role of the Enablers, Ambassador
Manorma Soeknandan shared some experiences of the Caribbean
community which consists of 3 continental member-states and 11
English-speaking island member-states.

She said the Regional Security System (RSS) Asset Recovery Unit
was set up in 2015 to tackle serious organized crime in the
Caribbean Common Law jurisdictions through partnership and the
robust application of proceeds of crime and money laundering
legislation.

She revealed some achievements of the Unit to include: US$ 26.8
m of criminal assets identified and restrained; US$ 7.5m forfeited
by the courts using cash seizure provisions; 85 persons charged
with money laundering offences etc.

She said that the enablers were mostly educated persons
(accountants, lawyers, politicians, etc.) who knew the loopholes,
the people and the culture/mindset of the people and also who had
the budget to calculate the “corruptive practices”.

On Beneficial Ownership, Thom Townsend, Executive Director, Open
Ownership, UK, said his organisation was working in partnership
with the World Bank to support the Corporate Affairs Commission,
CAC, with the goal to remove technical and usability barriers to
compliance; ensure usable data by agencies and businesses and CSOs
are available.

He recommended that there was the need to draw a growing
diversity of international best practices; integrate discussion
about business owners’ disclosure into other policy areas to grow
awareness and popularize the issue of disclosure of true company
ownership information and finally to use the data that was made
available.

The virtual Illicit Financial Flows conference is a 2-day event
by ICPC in collaboration with the AU-ABC and Coalition for Dialogue
in Africa (CoDA).