President Muhammadu
Buhari, yesterday, in Abuja said that his
administration has identified banks, financial
institutions and countries in which payments for
stolen Nigerian crude oil have been deposited.
Speaking at an audience with visiting United
States Congressmen, President Buhari
acknowledged the support and cooperation his
administration was getting from the international
community in gathering required intelligence for
tracing and recovering stolen national resources.
The President, according to a statement signed by
his Special Adviser on Media and Publicity, Mr
Femi Adesina, told the Congressmen led by Rep.
Darrel Issa: “We are getting cooperation from the
international community, including information
on ships that take crude oil from Nigeria and
change direction, or pour their contents into
other ships mid-stream. Some monies were paid
to individual accounts. We are identifying the
financial institutions and countries that are
involved. I have been assured that when we get
all our documents together, the United States and
other countries will treat our case with sympathy.”
President Buhari
told the
Congressmen
that his
Administration
will welcome
more regular
meetings of the
Nigeria-United
States Bi-National
Commission. He
noted that the Commission could serve as a more
useful platform for the promotion of bilateral
trade and economic relations as well as joint
cooperation in the war against terrorism.
Rep. Darrel assured him that the United States
will support Nigeria against Boko Haram by
providing training, intelligence and military
platforms.
“We look forward to helping you in many ways to
end the Boko Haram insurgency and the theft of
crude oil in the Gulf of Guinea,” he said.
Nigeria, the world’s seventh largest producer of
crude oil, accounts for about 68.1 per cent of the
total revenue Africa lost in a decade as a result of
illegal transfer of funds abroad.
N10.08trillion lost in 10 years
The report of the Thabo Mbeki High Level Panel
on Illicit Financial Flows from Africa adopted by
African Union Heads of State and Government at
their summit in Addis Ababa, Ethiopia said about
$40.9billion (about N6.87trillion) of an estimated
$60billion (about N10.08trillion) lost through such
transfers from Africa in a decade (2001-2010) was
traced to Nigeria.
The funds are stolen through corruption, tax
evasion and illegal transfer of profits by
multinationals, the AU said. Nigeria, which
produces an average of 2.3million barrels of oil
daily as the leading hydrocarbon producer in
Africa, is being ravaged by poverty and
underdevelopment. Cumulatively, Nigeria and
Egypt topped the list of 10 African countries by
illicit financial transfers between 1970 and 2008,
with $217.7billion (about N36.57trillion), or 30.5
per cent, and $105.2billion (about N17.67trillion),
or 14.7 per cent respectively, while South Africa
had $81.8billion (about N13.74trillion), or 11.4 per
cent.
In its 15-point findings, the panel noted that
ending illicit financial flows is a political decision
by the various governments as it involved issues
of abusive transfer pricing, trade mis-invoicing,
tax evasion, aggressive tax avoidance, double
taxation, tax incentives, unfair contracts, financial
secrecy, money laundering, smuggling, trafficking
and abuse of entrusted power.
The interrelationships of these issues, it stated,
conferred a technical character requiring
transparency across all aspects to ensure access
to information and the right to obtain such
information.
It will be recalled that there has been reports that
stolen Nigerian oil worth billions of dollars is sold
every year on international markets and much of
the proceeds are laundered in world financial
centers like Britain and the United States which
officials said will help President Buhari to recover
the funds. An estimated 100,000 barrels per day
(bpd) of oil was stolen from pipelines in the Niger
Delta, the report by London-based Chatham
House said, not including the unknown quantities
stolen from export terminals.
Theft of crude oil
The theft amounts to around 5 per cent of
Nigeria’s current 2 million bpd production but has
a wider impact because oil companies are often
forced to shut down pipelines due to damage
caused by thieves. The activity costs Nigeria’s
economy an estimated $5 billion a year in
potential revenue. While oil majors like Royal
Dutch Shell and Italy’s Eni are often the first to
complain about theft, it is unclear how much they
are losing from it. A measure of acceptable losses
may be keeping them from taking determined
preventive action, the report said. Oil firms do not
pay royalties on stolen oil.
“Nigerian crude oil is being stolen on an industrial
scale. Proceeds are laundered through world
financial centers and used to buy assets in and
outside Nigeria,” said the 70-page report, entitled
“Nigeria’s Criminal Crude”. Thieves have many
ways to disguise funds … including cash
smuggling, delayed deposits, use of middlemen,
shell companies and tax havens, bribery of bank
officials, cycling cash through legitimate
businesses and cash purchases of luxury goods.”
The report named the United States, Britain,
Dubai, Indonesia, India, Singapore and
Switzerland as likely money-laundering hotspots,
and the United States, Brazil, China, Thailand,
Indonesia and the Balkans as the most likely
destination for stolen oil.
Former Oil Minister, Diezani Alison-Madueke had
called for stolen oil to be labeled “blood oil”,
arguing that the security risk is similar to those in
past and present mineral conflict zones such as
Angola, Sierra Leone or Congo.
The Central Bank of Nigeria, CBN, Saturday said
that the Global financial integrity group has said
that about $15.7 billion illicit money pass through
Nigeria annually. This makes Nigeria one of the
top 10 countries for illicit financial flow. As a
result, banks in the country have reacted by
rejecting foreign currency deposits, saying that it
has increased its vigilance on illegal financial flow.
A statement issued by Ibrahim Mu’azu, Director,
Corporate Communications of the CBN said: “The
Central Bank of Nigeria (CBN) notes with concern
a recent report by the Global Financial Integrity
group, which ranks Nigeria as one of the 10
largest countries for illicit financial flows in the
world. Although we do not have an independent
confirmation of this assertion, the report
estimates that about $15.7 billion of illicit funds
go through our system annually.
“In the light of this avoidably negative
commentary, we wish to draw the public’s
attention to several protocols on illicit fund
flows, money laundering, and terrorism
financing both in Nigeria and around the world,
and warn that the CBN will increase its vigilance
to ensure that Nigerian banks are not used as
conduits for illicit fund flows, especially in foreign
currencies.
“The CBN will continue to support the Federal
Government’s fight against money laundering,
corruption, and terrorism financing and will
block any and every avenue that may be used
for these purposes. We will also ensure that
persons who venture into currency speculation
and currency substitution find it unattractive and
dangerous. In these efforts, therefore, we seek
the continued cooperation of all Nigerians to
make this work for the enhancement of our
shared progress, rather than the prosperity of a
greedy few amongst us.”
Illicit financial flows in and out of Nigeria are
mainly from crude oil theft, proceed of
corruption, tax evasion, over invoicing of imports
and inflated contracts.
The FGI report
According to the Financial Global Integrity report
2008-2012 released last month, “illicit financial
flows from developing countries are facilitated
and perpetuated primarily by opacity in the global
financial system. This endemic issue is reflected in
many well-known ways, such as the existence of
tax havens, secrecy jurisdictions, anonymous
companies, other legal entities, and innumerable
techniques available to launder dirty money such
as through misinvoicing trade transactions.
“This is, essentially, trade fraud and is often
referred to as trade-based money laundering
when used to move the proceeds of criminal
activity.
“Of the estimated $1 trillion in measurable illicit
outflows each year, trade misinvoicing is the
method most often used to move funds
offshore.”
