Financial Crime World

Money Laundering Scourge in Nigeria: Trillions Stolen, Yet Returned With Impunity

19th October 2021, NIGERIA BUREAU, Transparency International

Nigeria’s Ongoing Battle Against Money Laundering and Financial Crimes

Despite efforts to stem the tide of money laundering and financial crimes in Nigeria, instances of such illicit activities persist. anti-corruption agencies like the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices and Other Related Offences Commission (ICPC) along with international organizations paint a concerning picture of the magnitude of funds lost due to corruption and mismanagement since Nigeria’s independence.

Global Facilitation of Corruption Through Money Laundering

In a recent article, the Managing Director of Transparency International discussed the global facilitation of corruption through money laundering and the hiding of proceeds from power abuse, bribery, and secret deals. According to the article, “Dirty money enters the financial system, disguised as legitimate funds.” Corrupt politicians often use secret companies to hide their identities.

Stealing and Returning With Impunity

Proceeds of corruption in Nigeria are typically stashed in foreign banks or invested in opulent properties, luxury vehicles, or extravagant lifestyles. Those responsible do so with impunity.

Prevalence of Corruption and High-Profile Cases

Corruption and money laundering remain prevalent in Nigeria, and high-profile corruption cases are far from infrequent. Disconcertingly, some former state governors facing allegations have returned to political prominence.

  • Between January and December 2012, about 353 cases were filed in courts across the country resulting in over 50 convictions.

The Nigerian Government’s Handling of Corruption

The Nigerian government’s handling of corruption has been criticized for its lack of urgency. While efforts have been made to recover stolen funds, some previously stolen funds have been returned to Nigeria.

  • Late General Sani Abacha’s misdeeds led to the discover of US$ 2.26 billion misappropriated from the Central Bank of Nigeria.
  • Over US$ 480 million in proceeds of the loot were seized in a landmark US Department of Justice complaint.
  • However, some repatriated funds were not effectively managed, raising concerns about potential misuse.

Cases of Prominent Nigerian Politicians

Two prominent examples of Nigerian politicians involved in fraudulent activities and money laundering are the late General Sani Abacha and James Ibori.

Late General Sani Abacha

  • Despite substantial evidence of misdeeds, the Nigerian government posthumously honored Abacha in early 2014.
  • A Special Investigation Panel was established to trace and recover stolen funds, discovering US$ 2.26 billion was misappropriated between November 1994 and Abacha’s death.

James Ibori

  • In the UK, Ibori was sentenced to 13 years in prison for fraud and money-laundering worth tens of millions of pounds in 2013.
  • Some of Ibori’s assets were hidden in the oil firm Oando, and his Swiss accounts were used to funnel money from the company.

Proper Management of Repatriated Funds

In the interest of transparency and accountability, it’s crucial that the repatriated funds are effectively managed.

  • Funds should be deposited in the Central Bank following repatriation, but none has been set up to oversee the funds’ distribution.
  • A multi-stakeholder committee should be established to ensure that the funds benefit the country and are not returned to corrupt hands.
  • The UNCAC Coalition recommends that any returned funds be placed in a trust fund.