Nigeria loses $83.3bn to illicit cash outflow — AfDB

The African Development Bank has raised alarm over the outflow of illicit cash from the country.

The Bank said that Nigeria has already lost about $83.3 billion to illicit cash outflow.

The Country Director, African Development Bank (AfDB), Dr. Ousmane Dore, who revealed this yesterday, spoke at the Centre for Democracy and Development’s Multi-Stakeholders meeting on Illicit Financial Flows (IFF) out of Nigeria in Abuja.

He said the loss accounted for 5.6 per cent of total goods traded without proper invoicing in the last 51 years – between 1960 and 2011.

The AfDB country director added that the recent Global Financial Integrity report also ranked Nigeria seventh in the top 10 nations with the highest illicit capital outflows in the developing world and first in Africa.

According to him, Nigeria in many decades experienced a very serious problem of trade mis-invoicing, in the form of over-invoicing of imports and under-invoicing of exports for the purpose of shifting money out of the country.

“Between 1960 to 2011 Nigeria experienced cumulative illicit financial out flows totalling $83.3 billion or 5.6 per cent of a total goods trade through trade through mis-invoicing only.

“Export under-invoicing takes the larger share of $44 billion, while the balance of $39.3b was due to import over-invoicing,” the AfDB chief stated.

Earlier, CDD Director, Idayat Hassan, said the nation has sufficient resources to meet its developmental needs.

She said the illicit funds could be used to build about 870, 000 school and 400, 000 hospitals, among others.

Meanwhile, the Central Bank of Nigeria reiterated its resolve to meet out appropriate sanctions to those who engage in money laundering in the country.

The Bank also disclosed its collaborative measures with other regulatory agencies, especially the Nigerian customs to clamp down on travellers who move foreign currencies across borders.

The apex bank had expressed concern that trafficking of huge sums of foreign currency across the nations border was on the increase.

The apex Bank said the act was being perpetrated in defiance to the extant dictates of section 2 (subsection 3-5) of money laundering (prohibition) Act 2011 (as amended) which categorically states that:

“Transportation of cash or negotiable instruments in excess of US$10,000.00 or its equivalent by individuals in or out of the country shall be declared to the Nigerian Customs Service.” (subsection 3)

“The Nigerian Customs Service shall report any declaration made pursuant to subsection (3) of this section to the Central Bank of Nigeria.” (subsection 4)

“Any person who falsely declares or fails to make a declaration to the Nigerian Customs Service pursuant to section 12 of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, F34, LFN, 2004 is guilty of an offence and shall be liable on conviction to forfeit the undeclared funds or negotiable instrument or to imprisonments to term of not less than 2 years or to both.” (subsection 5)

The CBN also warned the general public that it would investigate the source of fund and seek justification for the possession of such volume of cash to ensure that no money laundering activity is involved upon receipt of any notice of declaration from the Nigerian Customs Service.

It added that those affected will also be expected to provide evidence of payment of taxes and duties related to the cash transaction.

”For the avoidance of doubt, the general public is hereby notified that the CBN (in collaboration with other relevant regulatory and security agencies) will promptly apply appropriate sanctions and penalties for contravention of the provisions of this Act” , it also said.