TIME TO STOP ILLICIT FINANCIAL FLOWS

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Iliyasu Gashinbaki canvasses the need to pass the bill on Chartered Institute of Forensics and Certified Fraud Examiners into law

The Joint African Union Commission/United Nations Economic Commission for Africa (AUC/ECA) High Level Panel Report on illicit financial flows from Africa, estimates that Africa is losing in excess of $50 billion a year to illicit flows. Of these, about $10billion, approximately 20%, is from Nigeria alone. The report makes the startling claim that over the past 50 years, Africa has lost more than $1 trillion, equivalent to all the official development assistance received during the same period.

A quick review of the global statistics on frauds and corruption shows that the damage suffered by African countries due to frauds, embezzlement, economic crimes, financial crimes and corruption is estimated at about 25% of the combined annual budgets of the entire continent. Unfortunately, if nothing is done to reverse this trend, it will exceed 45% of total combined annual budgets of African countries by 2050. The GDP of the world economy, comprising 194 economies, in 2020, is projected around US$83.84 trillion according to the IMF. While in the same year 2020, the total global frauds, economic crimes and corruption was over $8.3 trillion; and Nigeria is amongst the top 10 countries that are victims!

Every dollar that leaves one country must end up in another. Very often, this means that illicit financial outflows from developing countries ultimately end up in banks in developed countries like the United States and United Kingdom, as well as in tax havens like Switzerland, British Virgin Islands, or Singapore.

The Society for Forensic Accounting and Fraud Prevention (SFAFP) has watched the situation with growing concern and apprehension. Ways and means were examined to reduce to the barest minimum illicit financial flows from Africa which is today the biggest blow to the growth and development of the continent in general and Nigeria in particular.

The Society is of course willing to support the federal government and its relevant law enforcement agencies to build capacity on how to limit illicit financial flows and increase financial transparency; detect and deter cross-border tax evasion; eliminate anonymous shell companies; strengthen anti-money laundering laws and practices; work to curtail trade over or under invoicing; and improve transparency of multinational corporations among others.

But to completely checkmate illicit financial flows alongside other economic crimes it became exceedingly necessary, indeed urgent to come up with a bill to establish the Chartered Institute of Forensics and Certified Fraud Examiners dedicated wholly to this cause.

The key strategic objective of the bill when passed into law is to significantly reduce both domestic and global challenges posed by embezzlement, organized crime, money laundering, terrorist financing, trans-national organized crime and cybercrimes by training and deploying competent professional forensic experts, fraud examiners and investigative professionals that would meet the demand of the growing complexities of the financial system and the digital economy.

The promoters of the bill are multi-disciplinary professionals covering (accounting, fraud examination, forensics, computer science, law, criminology, medicine, investigation, sociology, psychology, etc.) The team is led by the Association of National Accountants of Nigeria (ANAN) and the Society for Forensic Accounting and Fraud Prevention (SFAFP). ANAN is the only chartered professional accountancy body in Nigeria empowered by law to teach as well as examine and advance the science of accountancy. ANAN was formed on 1st January, 1979, incorporated on 28th September, 1983 and was finally chartered by Decree 76 of 1993 on 25th August, 1993. Meanwhile, ANAN had established and has been successfully running the Nigerian College of Accountancy and currently the ANAN University.

When passed into law, the Chartered Institute of Forensics and Certified Examiners shall ensure maximum institutional strengthening and capacity building of professional practitioners, law enforcement agencies, public and private enterprises in Nigeria and beyond. The multi-disciplinary nature and diversity of the use of various forensics professionals will give the following unique and immediate benefits: Provide technical assistance and capacity building on how to block linkages and eliminate the reckless waste of public resources/funds; facilitate assets tracing and the recovery of financial and non-financial resources across the three tiers of government (Federal, State and Local Governments) and arms of governments (Executive, Legislature and Judiciary); provide an overarching multi-disciplinary regulatory standards and professional code of conduct/ethics for the practice and regulation of various forensic disciplines in Nigeria; reduce frauds, embezzlement, economic crimes, financial crimes and corruption significantly in both public and private sectors of the economy; provide technical assistance and capacity building on forensics and fraud examinations for tertiary institutions in Nigeria (colleges, polytechnics and universities); provide technical assistance and capacity building on anti-corruption through continuous skills development for professional practitioners, law enforcement agencies, public and private enterprises in Nigeria and beyond.

Also, to foster international cooperation and enhancement of foreign direct investment into the country by creating safe and investment friendly environment for investors; promote transparency and accountability in dealing with public and private sector operations in the economy; create huge job opportunities for the multi- disciplinary professions with the fraud examination ecosystem; create huge job opportunities for the multi- disciplinary professions with the forensics ecosystem; deepen democracy and promote transparent elections by ensuring proper forensic evidence are tracked, traced and preserved during elections and create jobs in the 774 local governments because of its wide applications and operations, which cut across the three tiers and arms of the government and also the private sector. The bill when passed into law, will help Nigeria to fight corruption, trace-track-recover lost funds/assets/resources, build capacity, attract foreign investments and build/restore the confidence of investors in the Nigeria economy.

I believe the time to stop illicit financial flows from Africa is now. And the passage of the bill to establish the Chartered Institute of Forensics and Certified Fraud Examiners into law presently at the House of Representatives is the necessary first step…

-Gashinbaki is President/Chairman of Council, Society for Forensic Accounting and Fraud Prevention. He wrote via gashinbaki@gmail.com