The Minister of Finance, Budget and National Planning, Zainab Ahmed, and the Governor of the Central Bank of Nigeria, Godwin Emefiele, have been summoned to brief the Senate Committees on Finance, Anti-Corruption and Financial Crimes; Banking, Insurance and other Financial Institutions on measures being taken to stop revenue loss, and also address tax evasion and money laundering activities.
The summon followed a motion sponsored by Gershom Bassey on “the need to review the domestic legal framework against illicit Financial Flows and to consider the creation of a Tax Amnesty for the voluntary repatriation of funds to Nigeria.”
Bassey, in his presentation, noted that Nigeria lost a minimum of $140 billion to illicit financial flows between 2000 and 2014, mainly to crude oil and commercial activities mispricing.
According to him, this economic loss went abated as Nigeria was ranked among the global top 30 countries of illicit financial outflows by dollar value, with $8.3 billion in illicit outflow from Nigeria in 2015.
Bassey further explained that findings by the Tax Justice Network and International Monetary Fund revealed that developing countries, including Nigeria, lose over $200 billion per year to illicit financial flows as multinational corporations neglect and refuse to pay taxes in these countries where they generate substantial amounts of profit.
Nigeria loses approximately $15 billion annually to offshore tax evasion. This has resulted in a consistently low tax revenue as a percentage of Gross Domestic Product (GDP), as low as 5.7 percent in 2017. Such statistics are alarming, especially when compared to the 17.2 percent average of 26 African countries in the same year.
This incessant financial drain on the Nigerian economy continues to have negative implications for domestic resource mobilization and long-term economic growth and development.
The lawmaker lamented that though Nigeria has at least 12 institutions and agencies responsible for tackling illicit financial flows (IFFs), the country “continues to be menaced by weak regulatory structures and the complicity of other financial secrecy jurisdictions, among others.”
Also summoned are heads of the Federal Inland Revenue Service (FIRS); Economic and Financial Crimes Commission (EFCC); and Independent Corrupt Practices Commission (ICPC), as well as the heads of the Nigerian Financial Intelligence Unit (NFIU); the Nigerian Export-Import Bank (NEXIM); Nigerian National Petroleum Corporation (NNPC) among other relevant institutions.