The Civil Society Legislative Advocacy Centre has said that multinationals and foreign countries are complicit in Nigeria’s loss of about $18bn yearly as a result of Illicit Financial Flows.
Major contributors to the loss include tax evasion, fuelled by grand corruption, organised crime and other licit and illicit practices, Financial Street gathered.
The Executive Director and CISLAC and Transparency International, Nigeria, Mr Auwal Rafsanjani, stated this on Wednesday in Abuja at IFFs conference on corruption in arbitration. He observed that although Nigeria might be an extreme case, the menace was replicated throughout Africa.
A recent United Nations panel, according to him, calculated that for every one dollar gained through Foreign Direct Investment and overseas development aid, Africa loses two dollars because of IFFs.
He, however, added that corruption and gaps in investor-state arbitration were another area Nigeria lost precious resources, even as most Nigerians live in abject poverty.
Citing the Process & Industrial Developments Limited arbitration case where Nigeria was ordered to pay the firm over $6.6bn interest, Rafsanjani pointed that such inadequacy was possible because Nigerian public contracts, especially those in the resource sector, were shrouded in secrecy.
He lamented that while the P&ID case was proceeding, Nigeria had already suffered enormous economic and reputational damage.
He said, “From the evidence available to us, it seems that no proper planning and tender process was conducted in a multi-billion-dollar deal. It is evident that the commercial terms of the agreement represented a catastrophic value for money from a Nigerian perspective. If Nigeria had had a clearer and more robust set of laws and processes around public procurement, such a deal would have never happened.
“Public procurement laws and procedures need to be upgraded, made unconditionally public and be rigorously enforced. Nigeria should also avoid signing Public Private Partnerships that are not in the public interest.”
The Chairman, Economic and Financial Crimes Commission Abdulrasheed Bawa, pointed out that corrupt leaders, their foreign accomplices and multinational companies perpetrate IFFs in Nigeria.
Bawa, represented by the Head of Research unit at the commission, Mr Abiodun Adebanjo, said lack of transparency on the part of the countries where the monies are stashed to the countries from where they were stolen was a major challenge.
“The situation we have seen in Nigeria is that corrupt government officials and their private sector collaborators use fronts and ownership structures that do not provide sufficient information about the true identities of the persons behind the title to hide illicit money and transfer same to safe foreign jurisdictions.
“In Nigeria we see a case in which influential officials use their positions to pilfer government resources and extract maximum rent from the country’s mineral resources with minimum or no benefit to the citizens.
“In practical terms, billions of dollars are lost yearly in royalties and fees for licences, which politically-connected individuals appropriate to themselves using fronts and secret ownership arrangements. This deprives the Federal Government of huge amount of money needed for development,” he added.
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