ILLEGAL FUNDS: N20.6TRN MOVED ABROAD IN 10 YEARS – REPORT

Nigeria has emerged seventh out of
the top 20 developing countries whose currencies are moved abroad with $129
billion illicit money from crime, corruption and tax evasion siphoned out of
the country in the last 10 years.

This was disclosed in a new report
from Global Financial Integrity (GFI), a Washington-based research and advocacy
organisation aimed at curtailing the cross-border flow of illegal money.

According to the report, about
$19.66 billion illicit money was exported from Nigeria in 2010 alone while an
average of $12.9 billion is moved yearly by corrupt politicians, businessmen,
drug barons and criminals in a country where citizens grapple with poor
transportation networks, unreliable electricity, inadequate healthcare
facilities and other lacking social amenities despite being rich in natural
resources.

Cumulatively, from 2001 to 2010,
China was top exporter of illicit currency with $2.74 trillion, followed by
Mexico $476 billion, Malaysia $285 billion, Saudi Arabia $210 billion, Russia
$152billion, Philippines $138 billion, and Nigeria $129 billion.

Other countries named among the
top 12 included India with $123 billion, Indonesia $109 billion, United Arab
Emirates $107 billion, Iraq $63.6 billion and South Africa $83.9 billion while
Brunei takes the 20th spot with $37 billion.

The report entitled “Illicit
Financial Flows from Developing Countries: 2001-2010” is GFI’s annual update on
the amount of money flowing out of developing economies via crime, corruption
and tax evasion, and it is the first of GFI’s reports to include data for the year
2010. The developing world lost $859 billion in illicit outflows in 2010, an
increase of 11 per cent over 2009. From 2001 to 2010, developing countries lost
$5.86 trillion to illicit outflows.

Co-authored by GFI lead economist
Dev Kar and GFI economist Sarah Freitas, the study is the first by GFI to
incorporate a new, more conservative estimate of illicit financial flows,
facilitating comparisons with previous estimates from GFI updates. A look at
the 2010 exports of illegal capital also had Nigeria on the seventh spot with
$19.66 billion and China on the first position with $420.36 billion exported
that year.

To address the problem, the Global
Financial Integrity report advocates that world leaders increase the
transparency in the international financial system as a means to curtail the
illicit flow of money.

Policies advocated include
addressing the problems posed by anonymous shell companies, foundations and
trusts by requiring confirmation of beneficial ownership in all banking and
securities accounts.

It also demands that information
on the true human owner of all corporations, trusts, and foundations be
disclosed upon formation and be available to law enforcement; reforming customs
and trade protocols to detect and curtail trade mispricing; and requiring the
country-by-country reporting of sales, profits and taxes paid by multinational
corporations.

Others are requiring the automatic
cross-border exchange of tax information on personal and business accounts,
harmonizing predicate offences under anti-money laundering laws across all
Financial Action Task Force cooperating countries, and ensuring that the
anti-money laundering regulations already on the books are strongly enforced.

Meanwhile, analysts have
challenged the propriety of the data used by the research group and called on
the group to provide evidence to substantiate its claims.

Chief executive of Financial
Derivatives Limited, Bismarck Rewane said he doubted the authenticity of the
information.
He said “I don’t think so. Where did they get their information from? Let us
not comment on matters that we don’t know the origin.

This is just another sensational
headline. How much does Nigeria has that $129 billion would be missing, it’s a
lot of money. If you want to make comments you have to know the facts. When you
hear numbers like that you ask how true it can be, that $129 billion is
missing. If that is true then you and I won’t be here, we’d probably be in Las
Vegas.”

Also reacting to the report,
foremost economist, Henry Boyo, said the group should indicate how the money
was laundered and the people or organisations or agencies that were
responsible.

He said “I have no such
information and if they have it, let them provide indications of how the money
was taken out. If the research group is a credible organisation it should
indicate how it laundered out and who are the people and organisations agencies
that are responsible and then it would be easier for people to believe that so
much was stolen and so much was taken out. And we should not be carried away by
all those.

“We know that there is plenty of
corruption and waste in the system, but people should not make allegations
without providing adequate evidence to support their allegations.”

But president of the Progressive
Shareholders Association, Mr. Boniface Okezie, said the money launderers will
end up developing other peoples’ economy and creating jobs for the developed
countries.

Okezie noted that while many
Nigerian people are feeding from hands to mouth, political jobbers are
derailing the intention.

“The major problem is that they
usually save our money outside and when they die the money will be lost and it
will increase suffering in the country. Those who are laundering our money
should help save it in Nigeria to enable the country create more jobs and that
will help enhance the economy.”