ANOTHER damning report released last week confirms the institutional weakness of the Nigerian government and its unclear response to ‘hot money’, terrorism and its financing. In its latest global ranking on the risks of money laundering and terrorist financing, the Basel Institute of Governance, an international non-profit organization, ranks Nigeria 17th out of 128 countries, placing it firmly in the ranks of the countries with “high ML/FT risks”. and exposed to greater risks of environmental crime. Beset by various terrorist groups across the country, the federal government should urgently strengthen and enforce anti-money laundering mechanisms and resolutely crush terrorism.
This is yet another rebuke to the president, Major General Muhammadu Buhari (ret), whose rise to power in 2015 was based on promises to destroy terrorism, crime and corruption. Seven years later, his failure is written across the country in rivers of blood, body bags, destruction and misery.
Under his watch, terrorism has spread beyond three northeastern states – Borno, Yobe and Adamawa – to almost all 36 states to varying degrees. Flawed strategy, lack of strong political will, corruption, incompetence and the entrenchment of sectionalism and nepotism in the appointment of senior security officials underlie this deterioration. Security issues are also politicized.
The failure is compounded by compromises, weak institutional capacity to monitor, track, interdict and prosecute terrorism suspects and financiers, and a dysfunctional centralized policing system that is clearly inappropriate in a federation.
Terrorist groups are supported by a constant flow of money to finance their nefarious enterprise. Intelligence and law enforcement agencies around the world therefore place a very high priority on countering the financing of terrorism – disrupting the funding sources and logistics of terrorist groups as a cornerstone of counter-terrorism strategy.
The Basel AML Index 2022: 11th public edition did not mince words; it rated Nigeria 6.77 out of 10, identifying it as one of the countries “not doing enough to combat money laundering and terrorist financing”. The report notes that in tackling ‘dirty money’, most countries are ‘taking one step forward and four steps back – and falling too far behind criminals seeking to launder illicit funds’.
Nigerians know this malaise. Despite a plethora of anti-money laundering laws, regulations and multiple agencies, the country remains a safe haven for money launderers. The app is weak and wacky; selective banning reigns. Institutions are weak; the regulations of the Central Bank of Nigeria are regularly flouted.
As it proceeds to overhaul and reissue some banknotes, the CBN has confirmed that 85% of the currency in circulation is outside the banking system. This is despite limits to the physical cash that individuals and corporations can hold, withdraw or deposit. Social media is full of trending images of billions of naira hidden in homes by hoarders, a reflection of ineffective law enforcement.
Worse still, the government often fails to monitor, arrest and prosecute terrorist financiers. As a result, bandits, Islamic terrorists and killer/kidnapper gangs negotiate daily and collect millions of dollars in ransom for kidnapping victims under the noses of law enforcement and financial sector authorities. Banks and exchange offices brazenly flout anti-money laundering rules.
In 2020, authorities in the United Arab Emirates convicted six Nigerian CDB operators for financing the terrorist group Boko Haram. In September 2021, exasperated by Nigeria’s failure to act on the intelligence provided and prosecute identified facilitators of terrorism, the UAE publicly named 32 more Nigerian terrorist financiers and placed six others on a watch list. .
Bowing (reluctantly) to outside pressure from foreign countries, the Federation Attorney General Abubakar Malami announced in May 2021 that the government had arrested 400 terrorist financiers and would soon prosecute them. Eighteen months later, despite reminders from civic groups and the media, they have not been publicly brought to justice.
The diet is simply not serious. Although Nigeria has signed several international covenants and groups to combat money laundering, it has never been vigorous in locating and neutralizing sources of terrorism laundering or prosecuting suspects. For a country ranked sixth most affected by terrorism in the world according to the Institute of Economics and Peace’s Global Terrorism Index 2022, this is counterproductive.
Nigerians are paying dearly for their government’s treacherous laxity. Around 53,418 people were killed by various non-state actors between May 29, 2015 and October 15, 2022, according to the Council on Foreign Relations’ Nigerian Security Tracker. The Global Center for the Responsibility to Protect estimates that 35,000 people have been massacred in northern Nigeria by Islamist terrorists since 2009, when Boko Haram launched its insurgency. Terrorists, bandits and Fulani herders/militants are carrying out killings across the country. In the Southeast, terrorist groups claiming to fight for self-determination are wreaking havoc and death on the region.
A 2019 UNDP report on the economic impact of terrorism put the cost of terrorism in Africa from 2007 to 2016 at a conservative amount of $119 billion; of that, Nigeria accounted for $97 billion, 22,000 times more than Burkina Faso and 19 times more than war-torn Libya.
Buhari, security and anti-corruption agencies and financial sector regulators must shift gears to save Nigeria. The country does not lack laws and regulations; it is a signatory to several international treaties and organizations to combat money laundering and terrorism.
As part of the follow-up to UN Security Council resolutions, the UN Counter-Terrorism Executive Directorate has urged all countries to integrate CBC into their counter-terrorism strategy; put in place effective mechanisms to prevent funds from reaching terrorists. Among other things, he recommended paying particular attention to the links between organized crime, human trafficking, drug trafficking and the financing of terrorism.
In Nigeria, the problem is enforcement. Collusion, corruption, incompetence and sectionalism allow terrorism and its financing to thrive.
Malami should immediately prosecute terrorism financiers and terrorism suspects. Buhari should muster strong political will, shake up the security apparatus; set and enforce performance goals for them.
Effective intelligence gathering and follow-up actions as well as disruption of funding sources and logistics are essential to defeating terrorism. Increasingly, law enforcement relies heavily and effectively on ICT. Nigeria should exploit these elements quickly and end the country’s nightmare.