The African Development Bank (AfDB) yesterday said Nigeria has lost about $83.3 billion to illicit financial outflow.
Its Country Director, Dr. Ousmane Dore who spoke at the Centre for Democracy and Development (CDD’s) Multi-Stakeholders meeting on Illicit Financial Flows (IFF) out of Nigeria, in Abuja, said the loss accounted for 5.6 per cent of total goods traded without proper invoicing in the last 51 years starting from 1960 to 2011.
The AfDB chief added that the recent Global Financial Integrity Report also ranked Nigeria seventh among top 10 highest illicit capital outflows in the developing world and first in Africa.
According to him, Nigeria in many decades experienced a very serious problem with trade misinvoicing, in the form of over-invoicing of imports and under-invoicing of exports for the purpose of shifting money out of the country.
He said: “Between 1960 and 2011, Nigeria experienced cumulative illicit financial out flows totalling $83.3 billion or 5.6 per cent of a total goods trade through trade through mis-invoicing only.
“Export under-invoicing takes the larger share of $44 billion while the balance of 39.3billion was due to import over invoicing.
“In the literature, exchange controls has been identified as a basic driver of trade and 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.
“For many in Africa, this has been a reality for decades. Depots, corrupt government officials and corrupt heads of state move billions of dollars from government coffers into lucrative, opaque bank.
“Others are illegal activities such as bribery, drug trafficking and similar illegal activities.”
Earlier, CDD Director, Idayat Hassan said the nation has sufficient resources to meet its
She said the illicit funds could be used to provide about 870,000 school, 400,000 hospitals among others.
However, she attributed widespread illegal financial flows to governance challenges in the sense of weak institutions and inadequate regulatory environment, lack of transparency and accountability.
According to her, the situation, for many years has strained capacities of the governments in various ways and discourages wealth creation to implement development policies.
She said if the nation had judiciously used its resources, Nigeria would have achieved the Millennium Development Goals (MDGs) as the country prepares to transit to Sustainable Development Goals (SDGs).
“What has become obvious is that we have to redirect our efforts to fighting IFFS in Nigeria….for every $1 of foreign borrowing, on the average, more than $0.50 leaves the borrower country in the same year,” she added.