Illicit Financial Flows Cost Nigeria $140 Billion - Oteh

by Arowolo Timothy

The Director General of the Securities and Exchange Commission (SEC), Ms. Arunma Oteh has disclosed that Nigeria lost a total of $140 billion due to illicit financial flows between 2002 and 2011.

Oteh made this revelation at the second annual business integrity lecture organised by the Convention on Business Integrity in Lagos at the weekend. These illegal activities, according to the SEC boss have remained major obstacles to economic growth.

Oteh said: “Nigeria has lost more to illicit financial flows between 2002 and 2011 more than any African country. We are listed as one of the top ten globally in this ranking. Some people estimate that we need about $50 billion to ensure stable electricity, yet within a nine year period, we lost $140 billion to illicit financial flows.

“These flows are not only depriving our country of desperately needed capital, but also being used to finance terrorism abroad and within Nigeria.”

She also stressed that over $1 trillion had also been lost by poor countries through such illegal activities like money laundering, tax evasion, transfer pricing and embezzlement.

She further noted that a World Economic Forum (WEF) had identified corruption as the second most problematic factor that businesses in Nigeria indicated, was their constraint in doing business. This was after infrastructure. “But what shocked me about the statistics was that it was above access to finance and above terrorism. Some of our organisations both multinationals and businesses are not tackling the causes of illicit financial flows,” she argued.

Continuing, she said: “Recently a security expert that recently provided us training at the SEC indicated that Boko Haram received over $70 million between 2006 and 2011 through shady transactions like money laundering, oil bunkering, kidnapping and dealing in drugs. “Boko Haram

according to national money magazine is the seventh richest terror organisation in the world.”

On measures to tackle the unfortunate trend, she said it was important to enforce high sanctions on defaulters.

According to Oteh, a recent study published on the Harvard Corporate Governance blog had found out that high levels of integrity in organization are positively correlated with higher productivity,

profitability better industrial relations and higher levels of attractiveness to job applicants.

By adhering to the code of ethics and doing the right thing, no matter the cost, she said, companies would end up improving performance and enhance sustainability.

Speaking on the need for Nigeria to focus on integrity, Oteh said: “I have no doubt that the rate we are doing business in Nigeria, of a backdrop of an economy that has grown by about 13.7 per cent both in the last 13 years, and still has prospects for future growth we all need to start to think about how to carve out niches that would make that difference.

“At SEC, we are currently working on having a robust corporate governance scorecard because we do think that we need to provide more specific guidelines on how companies would meet such a mandatory code.”