The Africa Development Bank (ADB) has disclosed that Nigeria lost $83.3 billion to Illicit Financial Flows (IFFs) between 1960 and 2011 alone.
Country Director of the ADB Dr. Ousmane Dore stated this yesterday in Abuja at a multi-stakeholders’ meeting for the development of National compact against illicit financial flows (IFFs) out of Nigeria organized by the Center for Democracy and Development (CDD) and the TrustAfrica.
Nigeria has been ranked seventh in the world and first in Africa among the top countries bedeviled by IFFs despite experienced acute cash crunch.
According to Dore Nigeria has for many decades experienced a very serious problem with trade misinvoicing, in the form of overinvoicing of imports and underinvocing of exports for the purpose of shifting money out of the country, adding that trade misinvoicing is a reality impacting virtually all countries.
“Between 1960 and 2011, Nigeria experienced cumulative illicit financial outflows totaling USD83.3 billion or 5.6% of total goods trade through trade misinvoicing only. Export underinvoicing takes the larger share of USD44 billion while the balance of USD39.3 billion was due to import overinvoicing.
“In the literature, exchange controls has been identified as a basic driver of trade misinvoicing in developing countries, especially Nigeria, because they tend to create black markets in foreign exchange where foreign currencies can be bought and sold at a premium over official rates,” he said.
He therefore among others urged the Federal Government to sustain and strengthen domestic resource mobilization (DRM) and utilization to drive sustainable broad-based economic growth, development and transformation, and also to providing a more stable, reliable and less volatile means for development finance.
The Director of CDD Idayat Hassan said that Illicit financial flows perpetuate Africa’s economic dependence on the world and a clog in Africa quest for a developmental state that is able and capable of providing collective public goods such as security, health, education, saying that the issue has been topping public discourse in the last few years, and has the direct consequence is becoming more and more obvious as the impacts are felt and hard on our governments.
She said: “The recently released Thabo Mbeki Panel report on illicit financial flow out of Africa reveals that Africa is currently estimated to be losing more than 50 billion dollars annually in IFFs. Over the last 50 years, the continent is estimated to have lost over 1trillion in IFFs, that amount is held to be equivalent to be the total amount of development assistance rendered Africa over the same period.”
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