The GIABA report is another wake-up call to strengthen the country’s financial system
In November 2020, six Nigerians were convicted and sentenced to various jail terms, ranging from 10 years to life imprisonment by authorities in the United Arab Emirates (UAE). Their crime? Facilitating the funnelling of funds worth $782,000 to terror groups in Nigeria in contravention of UAE’s Federal Law. Again, in September this year, the UAE listed another six Nigerians as financiers of Boko Haram and terror affiliates. All these happened while the Nigerian authorities totter on how to handle scores of alleged terrorism sponsors back home. Meanwhile, the Attorney General of the Federation and Minister of Justice, Abubakar Malami, had in May revealed that high-profile Nigerians suspected to be financing terrorism were being profiled for prosecution.
While the federal government continues to dither on how to bring these suspects to book, the recent report by the Inter-Governmental Action Group against money laundering in West Africa (GIABA), set up by the Economic Community of West African States (ECOWAS) has made a shocking revelation: The terror group, Islamic State West Africa Province (ISWAP) moved a whopping N18 billion annual revenue through the Nigerian financial system to fund its activities. This expose is not only a serious threat to the country but also a clear indictment on the intelligence and anti-graft agencies, notably, the Department of State Services (DSS) and the Nigerian Financial Intelligence Unit (NFIU).
The overarching objective of the GIABA report is to help policymakers, regulatory and enforcement authorities, as well as reporting entities, to better understand the nature and dynamics of terrorist financing in the sub-region. The project aims to collect information from the Financial Action Task Force (FATF) and other institutions, identify current terrorists financing (TF) trends, methods, and the techniques they use to source illicit money from their supporters in West and Central Africa. It also provides specialised analysis and information on how they funnel these funds to their terror activities within the region and more especially in Nigeria.
It is important for the ministries and agencies (MDAs) to study the GIABA report and heed its recommendations. From 2019 to date, the Nigerian government has taken some steps that were recommended by the report, such as a closer look at the financing of non-governmental organisations (NGOs) and of Bureau de Change operators.
However, major challenges include the implementation of the Anti-Money Laundering/Combating the Financing of Terrorism measures. That terrorists use different methods to finance their activities and conceal the sources of their funds is common knowledge. The funds may come from legal sources, such as legitimate businesses, government, and religious or cultural organisations, or from illegal sources, such as drug trafficking, kidnapping, and government corruption. But with the obsession for regime protection, Nigerian authorities seem to be more interested in the NGOs that challenge its human rights and governance records than those that threaten national security.
When law enforcement can detect and prevent money laundering activities, it may also be preventing those funds from being used to finance acts of terror. Understanding these financial management strategies is essential in developing effective measures to counter terrorist financing. The fact that money laundering and terrorism financing are often linked has made it imperative for financial regulators and law enforcement authorities to use a variety of techniques to checkmate these criminals.
The GIABA report is therefore another wake-up call to strengthen the financial system in Nigeria, and by extension curb terrorism financing. Some of the Anti-Money Laundering (AML) requirements in Nigeria mandate certain financial institutions and businesses to have compliance programmes under the Money Laundering Act. These include the appointment of an AML chief compliance officer at the executive level, identification of AML legislation and offences, and identifying the nature of money laundering as well as reporting money laundering ‘red flags’ and suspicious transactions.
It is impossible to move a whopping N18 billion without the financial system, underscoring the fact that terrorism cannot thrive in a transparent environment. So, if there is any take-away from the GIABA report, it is that an urgent overhaul of the financial system is required to check terrorism sponsorship in Nigeria.
