“Successful anti-corruption outcomes takes time and perseverance. If the IMF wants to ensure that the most vulnerable communities receive the supports and resources they are promised, it is critical that they continue to press governments to prioritise integrity and transparency”-M. Emilia Berazategui
INTRODUCTION
Africa is the second largest continent (after Asia), covering about one-fifth of the total land surface of the earth with a population of about 1,369,591,086 (14th May 2021 latest United Nations estimates). Despite the abundance of human and natural resources available to her 54 sovereign countries, she lags behind in the area of sustainable development. The outbreak of Covid-19 exposed cracks in many African countries including Nigeria where Illicit financial flows (IFFs) have continued to make the country lose a massive volume of her wealth. The devastating consequences of these flows is the leading cause of growing debts plaguing the country as she resort to loan acquisition to address paucity of funds. Although efforts to strengthen the rule of law and prosecute offenders of IFFs has been made by the Nigerian government, just a minute fraction of such flows has been recovered. This research work examines some incidences if IFFs flows in Nigeria, projected debt and possible measures African countries can adopt to curb these flows, track toxic debt and fight corruption.
DEFINITION OF TERMS
Although there is no universal agreement over a definition for illicit financial flows, it now generally refers to cross-border movement of capital associated with illegal activity or more explicitly, money that is illegally earned, transferred or used that crosses borders.6
Growing debt can be said to be the increase in the sum of money that is owed or due while sustainable development is the idea that human societies must live and meet their needs without compromising the ability of future generations to meet their own needs.
NIGERIA CASE STUDY
Nigeria experiences one of the world’s largest illicit financial outflows, with the politicians among those diverting funds to finance other parts of the world. The painful part of this scenario is that when such looted funds are discovered and handed over to agencies tasked with the responsibility of overseeing such funds, they are re-looted and mismanaged thereby, halting the realization of sustainable development in the country.
According to a report by (www.transparency.org), Nigeria in April 2020 received $3.4 billion in emergence financial assistance from the IMF to support its Covid-19 response. Two months later, the government announced a $6 billion stimulus. According to official figures, many of Nigeria’s poorest citizens have yet to see the benefit of this assistance. Nationwide surveys by the National Bureau of Statistics found that by July 16 2020, just 12.5% of the poorest quintile of respondents had received some form of food assistance since the pandemic began. By August, 32% of respondents nationwide were experiencing severe food insecurity, compared with 14% in the same period in 2018. An interview conducted by Human Right Watch and Justice and Empowerment Initiative between March and December showed that most families survived the impact of the pandemic on their jobs and livelihoods by skipping meals, incurring debt and relying on handouts from neighbours and local groups. “We heard about all the money the government talked about and the food they were distributing, but most of the communities never got any”, said one community health worker in Nigeria.
On the 9th of March 2021, the UK government agreed to repatriate about 4.2 million pounds of the stolen funds recovered by its law enforcement agencies from a former governor of Delta state, James Ibori. The recovered sum from Ibori is reportedly a tiny fraction of the total amount laundered by his associates, which is believed to be in excess of 200 million pounds. Earlier in 2012, he had pleaded guilty to ten counts of money laundering and conspiracy to defraud when he was accused of stealing $250 million from Nigeria’s public purse. He was subsequently sentenced to a total of 13 years in prison.1
For Joshua Dariye, he was arrested in London on the 20th of January 2004 with large sums of money during his time as governor of Plateau State. Since serving governors have immunity from criminal prosecution and EfCC, (an anti-corruption agency of the Nigeria government established to check corrupt practices). After the expiration of his tenure , the EFCC in 2007 preferred 23 counts of money laundering involving alleged diversion of about 1.126 billion naira Plateau State governments ecological funds. Accomplices are also not left out of IFFs practice because they help in facilitating such deals. One Ms Joyce Oyebanjo who Mr Dariye made a guardian of his children, was convicted in April 2007 of using numerous accounts in her own name to launder large sums of money.3
Another former governor of Taraba State, Jolly Nyame was on the 30th of May 2018 convicted and sentenced to 14 years in prison for criminal breach of trust and criminal misappropriation of 1.6 billion naira.2
Diepreye Alamieyeseigha , a former governor of Bayelsa State was also detained in London on charges of money laundering in September 2005. At the time of his arrest, Metropolitan police found about 1 million pounds in cash and bank accounts. He was also found to own four homes in London worth an alleged 10 million pounds. On July26 2007, he pleaded guilty before a Nigerian court to six charges and was sentenced to two years in prison on each charge.
GROWING DEBTS
With the increasing menace of IFFs in Nigeria, the country has been plunged into a growing debt climate. There have been public debates about the level of Nigeria’s in-debtness to China , including claims that Abuja is risking its sovereignty . The question now is what does Nigeria currently owe China? As of December 2020, the most recent official data available, Nigeria’s public debt was $86.3 billion according to the country’s debt management office. This debt comprised:
* $33.3 billion in external debt, all of it contracted by the Federal government.
*$ 53 billion in domestic debt, including loans by banks. Of this amount, the Federal government owed $42 billion while the balance was loans by the State governments and the Federal capital territory.
*The debt to China formed 80.1% of bilateral debt. Other countries that have lent to Nigeria are France, Japan, India and Germany.
* Multi-lateral debt, or debt owed to international financial institutions such as the African Development Bank, the World Bank and International Monetary Fund, stood at $17.9 billion.4
Table showing national debt projections for Nigeria (Source: Statista 2021)
|
Year
|
Amount in billion dollars
|
|
2025
|
287.69
|
|
2024
|
251.46
|
|
2023
|
219.63
|
|
2022
|
192.25
|
|
2021
|
165.56
|
|
2020
|
142.72
|
|
2019
|
111.54
|
|
2018
|
93.82
|
|
2017
|
76.52
|
|
2016
|
63.11
|
|
2015
|
50.85
|
CURBING IFFs, TRACKING TOXIC DEBT AND FIGHTING CORRUPTION
Although the issue under discussion is a global menace, providing actionable policy recommendations to address IFFs will differ depending on the country context and the underlying activities that result in these out flows. For Nigeria and Africa as a whole, a similar approach could be adopted.
The family being the smallest unit of every community has a great role to play. Looking at the case study from Nigeria, it is glaring to note that all the public officials caught in the act of illicit financial flows belong to a family. Parents who are the first educators for children should train their wards to uphold virtues of uprightness and honesty. As proverb: 22:6 says, “train up a child in the way he should go: and when he is old, he will not depart from it”. Doing this will help in grooming a generation of Africans capable of shunning IFFs practice and implementing sustainable development projects.
Closely related to parents are religious leaders to whom Africans seek prayers and sermons from. As a matter of urgency, there is a need for a drastic shift from the materialistic version of religion currently practiced around the continent to one that promotes integrity. Religious and traditional leaders should deliver sermons on contentment, integrity and the fear of God to their followers. Faithfully upholding this will correct the wrong mind-set of erring Africans and help to address corruption.
Despite the abundance of both natural and human resources, Africa continues to languish in poverty due to poor management culture. The education sector in Africa and other training agencies should creatively add management courses to the curriculum to hasten the development of this skill. When over 70% of Africans know how to manage resources, there will be no need seeking for loans and aids to increase our growing debt.
Furthermore, policies that will favour the trial of erring Africans and government officials found wanting of corruption should be introduced. The immunity clause that protects elected and government officials from criminal prosecution should be abolished in order to hasten conviction of corrupt Africans. Doing this will instil fear among office holders and make them sit up to deliver good governance.
The time spent on many IFFs litigation cases are usually too long. The judiciary of Africans countries should device measures like the use of mobile, on shore, on air and rail courts to speed up pending cases. This will help in addressing the backlog of cases, reduce IFFs and provide the judiciary with ample time to embark on profitable researches.
A community accountability agency made up of all the strata of the community should be set up to audit and monitor the flow of cash within their immediate community. This will help in discouraging potential culprits from IFFs activities.
The government of African nations should be encouraged to recruit honest officials that will handle government agencies. When officials are honest like those in Finland and Switzerland, money will be judiciously used for the benefit of the common person. Retreats, trainings and short courses should also be organised for public officials to equip them with the necessary skills needed to move the continent forward
Public officials should be mandated to declare their assets before, during and after office. Instituting this measure will help reduce the culture of illicit financial flows that has become a household occurrence among Africans. To achieve this, politicians, government officials and private personnel’s should publicly declare their assets annually.
Over the years, there have been a dearth of information in the continent. To bridge this gap, African countries should facilitate trade data sharing, align with regulation bordering finance and engage with international agencies working on tax reform efforts.
Finally, African universities are trying but more needs to be done by these reservoirs of knowledge. Embarking on fruitful research that can address loopholes in tax treaties while strengthening regulatory frame works should not be neglected by educational institutions around the continent. Timely funds should also be provided to grease the wheels of such researches.
CONCLUSION
The challenge of IFFs, growing debt and widening public finance gaps are issues that have hindered the sustainable development of Africa for decades. Raising a new crop of generation of youths with integrity intact is the sure way to curb the menace and create the future we all yearn for. Time to take action is now.
REFERENCES
- https:blogs.lse.ac.uk/africaatlse/2021/04/06/tracking-illicit-financial-flows-support-nigeria-post-pandemic-recovery-corruption
- www.wwwprememiumtimesng.com/news/headlines/448391/supreme-court-affirms-10-year-jail-for -ex-governor-who-looted-n2billion.html
- https://news.bbc.co.uk/2/hi/africa/7015765.stm
- https://qz.com/africa/1994765/how-much-debts-does-nigeria-owe-china
- www.statista.com/statistics/531833/national-debt-of-nigeria
- www.worldbank.org/en/topic/financialsector/brief/illicit-financial-flows-iffs
- www.worldometers.info/world-population/africa-population
- https://www.transparency.org/en/news/imf-covid-19-emergency-loans-cameroun-ecuador-egypt-nigeria