Whopping $150 Billion Stolen from Nigeria in 10 Years
Nigeria’s new President, Muhammadu Buhari, today said that the government believes that its officials have stolen approximately US$150 billion from the state in the past ten years. In anti-money laundering law, high ranking government officials with access to state property and assets are politically exposed persons (“PEP“). Every penny of the US$150 billion is proceeds of corruption or theft, hence laundered funds.
The Money Laundering of 1/3 of Economy of Nigeria
To put it in perspective, US$150 billion is almost one third of the whole value of the economy of Nigeria. The Government of Nigeria is effectively saying that approximately 1/3 of its economy has disappeared overseas in corruption payments or outright theft, into the bank accounts of private persons – in this case, PEPs and 1/3 of its economy has been laundered out.
PEPs are a high risk for financial crimes, such as money laundering, tax evasion, corruption and terrorist financing because they have access to large sums of financing and the political power and banking relationships to launder money to offshore locations for their personal benefit. All banks in Nigeria, including Western banks, are required to undertake proper enhanced due diligence in respect of all PEPs to ascertain that any assets and money they deposit and move is legitimately earned, otherwise they are required to de-risk and terminate the accounts.
“Mind-Boggling” Assets Stolen in Oil Sector
President Buhari also disclosed that “mind boggling” sums of money had been stolen from the country’s oil and gas sector, which accounts for 70% of Nigeria’s national revenues. Likely by PEPs. Nigeria is the largest producer of crude oil in the region. President Buhari said that the government would engage professionals to undertake asset recovery of state assets and recover the assets.
Nigeria Conducted Business with Non-Government Bank Accounts
President Buhari said that up until now, some official government business had been conducted using non-government bank accounts, suggesting that PEPs and government agencies in Nigeria use personal or private company bank accounts to conduct official government business on behalf of Nigeria.
Effective today, every government agency in Nigeria has been ordered to use only government bank accounts to conduct government business. The order is designed to introduce transparency into Nigeria’s government financial transactions and to stop so-called “leakage” – a polite term that refers to corrupt and other payments made under the table.