While Africa loses $88.6billion, representing 3.7 per cent of its Gross Domestic Product (GDP) to illicit financial flows (IFFs) annually, Nigeria’s loss to the menace is estimated to be between $15bilion and $18billion annually. Despite measures put in place by the federal government to check the menace, Nigeria has remained a major perennial victim of illicit financial flows, which involve the movement of money generated through illegal activities such as corruption, tax evasion and illicit drug trade. The perpetrators of the IFFs deprive Nigeria, and indeed, other African economies huge revenue needed for development.

Between 2003 and 2013, Nigeria reportedly lost $157 million to IFFs. Foreign Direct Investment (FDI) within the same period was only $48billion and $59billion, respectively. Across the globe, over 60 international tax havens and secret jurisdictions have been identified as warehousing illicit funds. There are also thousands of such illicit financial outlets disguised as shell companies and charity organisations across the world confirmed by the United Nations Conference on Trade and Development (UNCTAD), and the Global Finance Integrity (GFI), a Washington-based Think Tank that focuses on illicit financial flows.

Recently, the GFI blamed Nigeria’s banking institutions that have left the federal government with little option but to embark on external borrowing spree. Instructively, the humongous loss to IFFs has come amid a recent report by the Central Bank of Nigeria (CBN) that the country spent $2billion on external debt servicing in four months, between January and April this year. This marks a 50 per cent increase compared to the $1.33billion recorded during the same period in 2024. The amount involves international payments, comprising debt service, remittances, and letters of credit, which stood at $2.6billion as of April, 2025, up from $2.07billion recorded in the corresponding period of 2024.

Combined, illicit financial flows and debt servicing have reduced the revenue needed to address pressing socioeconomic challenges in the country. In August 2024, the Vice President of the International Police Organisation (Interpol), Mr. Garba Umar, disclosed that “hundreds of thousands of dollars are being laundered out of Nigeria every hour.’’ The startling disclosure made at the inauguration of a training workshop for academy personnel of the Economic and Financial Crimes Commission (EFCC), in Abuja, showed that Nigeria has become a transit country for illicit money laundering to other African countries and across the world.

Interpol has repeatedly cautioned that if the trend is not checked before such proceeds of crime get to the criminals, they “will enjoy the fruits of their crime, while the hard working and honest Nigerians pay the price of the crime”. The warning should be heeded. The relevant agencies should double their efforts to reduce illicit financial flows in Africa and the world.

It is also disturbing that the Nigerian banking sector accounted for an estimated $854billion of illicit cash flows in Africa between 1971 and 2009. The figure is said to be rising steadily at an average of 12 per cent in the last ten years, contributing to the present slow economic growth and development of the economy. A study by Afrivest, a renowned investment management company, says Nigeria’s public debt stock may soon hit all-time high as a result of illicit financial flows and other fiscal and monetary policy failures.

This raises more concerns about Nigeria’s debt-to-domestic product ratio. Interpol has warned that Nigeria risks becoming “prone to more crimes, more drugs, more fraud, more corruption and more violence.” All of this should serve as a wake-up call on the government and law enforcement agencies to arrest those behind the IFFs. No country can make sustainable progress with illicit cash flows and unsustainable debt servicing that currently gulps over 70 per cent of the nation’s revenue.

Therefore, we advise the federal government to scale up its collaboration with the Interpol and other agencies towards curtailing IFFs to the barest minimum. One of such measures is what Interpol calls “Silver Note.” It targets combating money laundering in Africa, and globally. This measure also requires the CBN to tighten the loose ends in the banking sector, which aid the perpetrators of IFFs to carry out their nefarious transactions. This will greatly assist the Economic and Financial Crimes Commission (EFCC) and the National Drug Law Enforcement Agency (NDLEA) in their operations.

Let the anti-graft agencies rise up to the challenge and apprehend those behind the perennial illicit financial flows. The menace persists because the perpetrators have not been arrested and prosecuted. The IFFs barons must be arrested and brought to justice. The menace has impacted negatively on the economy, drained our foreign exchange reserves, reduced revenue collection, and resulted in poor investment inflows and the escalation of poverty in the country. (Daily Sun Editorial)