A total of $7.92billion in illicit capital flowed of out Nigeria in 2012, according to the latest report released by the US-based non-profit research and advisory organisation, Global Financial Integrity (GFI).
For the year 2012, only Nigeria and South Africa are the two African countries ranked in the top 20 countries for illicit financial outflows. Nigeria was ranked 17th behind South Africa, which ranks 9th with cumulative illicit financial outflows of $29.13 in 2012.
According to the report, “Illicit Financial Flows from Developing Countries: 2003-2012,” emerging economies lost a whopping $991.2billion in facilitating crime, corruption and tax evasion.
However, in the 10-year period between 2003 and 2012, Nigeria was ranked 10th with a cumulative of $157.46billion, surpassing South Africa which was ranked 12th with a cumulative $122.14billion. Also, Nigeria and South Africa are the only two African countries that were ranked for illicit financial outflows in the 10-year period between 2003 and 2012.
“The fraudulent mis-invoicing of trade transactions was revealed to be the largest component of illicit financial flows from developing countries, accounting for 77.8 percent of all illicit flows, highlighting that any effort to significantly curtail illicit financial flows must address trade mis-invoicing,” said the report.
Frontline political activist, Chris Nwokobia, said that the report vindicates the position of former CBN governor, Sansui Lamido, that $20billion was missing from the coffers of the federal government.
According to Nwokobia, when Sanusi said that $20billion was not missing, many dismissed him as playing politics and he was harassed out of office.
“This report is only saying that what Sanusi said was correct. Nigeria has always been corrupt but this is the first time that corruption is driving the wheel of state,” Nwokobia said.
The report, authored by GFI’s chief economist Dev Kar, and GFI’s junior economist Joseph Spanjers, reveals that “illicit financial flows hit a historic high of $991.2 billion in 2012 – marking a dramatic increase from 2003, when illicit outflows totalled a mere $297.4 billion.”
It also notes that illicit outflows are “growing at an inflation-adjusted 9.4 percent per year, amounting to double global GDP growth over the same period.”
“As this report demonstrates, illicit financial flows are the most damaging economic problem plaguing the world’s developing and emerging economies,” said GFI president Raymond Baker, a longtime authority on financial crime. “These outflows – already greater than the combined sum of all FDI and ODA flowing into these countries – are sapping roughly a $1trillion per year from the world’s poor and middle-income economies.”