…but critical action must be swift to deliver 9-Point Plan

A pan-African counter-corruption thinktank, The Centre of Excellence in Integrity (the SARCOE), has described as bad news Nigeria’s grey-listing by the Financial Action Task Force (FATF) for failing to meet its international obligations to reduce money laundering, terrorist financing and other financial crimes.

The Stellenbosch-based thinktank, however, said the Nine-Point Plan agreed with the FATF gives the newly elected Nigerian Government a real opportunity to prove its counter-corruption credentials and tackle the corruption that plagues every level of the public sector.

Nigeria made a high-level political commitment in February 2023 to work with the FATF and the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) to strengthen the effectiveness of its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regime, leading to a Nine-Point Plan that includes completing its residual money laundering and terrorist financing (ML/TF) risk assessment and updating its national AML/CFT strategy to ensure alignment with other national strategies relevant to high-risk predicate offences, and enhancing formal and informal international cooperation in line with ML/TF risks.

According to SARCOE, the FATF grey-listing is a matter of grave concern for Africa’s largest economy where there is daily struggle against the problems of corruption.

“Nigeria is currently 150th out of 180 on the recently published Corruption Perceptions Index 2022, scoring 24/100 (where 0 is very corrupt and 100 is very clean). Nigeria suffers from corruption at every level of government including contract fraud, money laundering and bribery. It is estimated that corruption costs the Nigerian people $billions per year,” SARCOE said in a press release this week.

The counter-corruption thinktank said addressing Nigeria’s endemic corruption will be challenging but tackling corruption and successfully exiting the FATF grey list is essential so that the Government can deliver social change and a successful, resilient and sustainable economy.

“Failure to do so would leave Nigerian businesses both at home and overseas at risk of far greater scrutiny and financial consequences as foreign companies and governments seek to protect their interests from corruption and corrupt actors,” it said.

SARCOE stressed the criticality of counter-corruption training and education to delivering the FATF Nine-Point Plan, as it would equip public sector officials and elected politicians with the needed knowledge to be able to prevent, detect, investigate and prosecute corruption in all its forms. In the long term, it said, such training and education will empower the Government to work towards the eradication of corruption and the opportunities that corrupt actors take advantage of.

“It is critical that if Nigeria is to exit its current grey-listing quickly, then the efforts of the Government to eradicate corruption are backed up by specialist training that includes anti-money laundering, counter terrorist financing and investigative techniques that equip key personnel with the capacity and capability to enable them to deliver the Government’s counter-corruption strategy,” said Professor Lee Marler, Co-Founder and Director of the SARCOE.

The training, SARCOE said, would ensure that the knowledge exists within organisations so that they fully conform with the requirements of the relevant anti-money laundering and counter terrorist financing regulations as well as other financial crimes, and enable the Government and regulatory authorities to improve the integrity compliance and counter-corruption environment in Nigeria.

“The grey-listing by the FATF is not unexpected, but the impact on Nigeria is likely to be significant. Private and public sector organisations will be subject to far greater due diligence, the cost to Nigerian companies of doing business both at home and overseas will increase as commercial partners, insurers and the financial sector manage their exposure to increased risk, and all this will have a negative impact on GDP and the economy,” Marler said.

“Two key areas of consideration are the infrastructure deficiencies in the oil production industry and rising insecurity. Economic growth is being hampered by low oil production output due to a variety of factors, but corruption in the industry plays an important part in slowing investment and development,” he said.

The SARCOE said in its commitment to developing international cooperation to counter corruption, it is already consulting broadly with associates, partners and other stakeholders across the African continent to utilise bilateral and multilateral channels to combat the scourge that is limiting the potentials of great economies and societies like Nigeria, South Africa, and other nations across Africa.