General News
Nigeria, Others Lose $947Bn to Corruption, Tax Evasion
Nigeria and some other developing countries lost a total of $946.7 billion to corruption, trade mis-invoicing and tax evasion in 2011, with amount being spirited away growing larger with each passing year.
Nigeria alone lost $142.27 billion to the unsavoury practices during the period, according to a recent report by Global Financial Integrity, a research and advocacy organization based in Washington, D.C.
Money lost to corruption in these developing nations was 13.7 per cent higher in 2011 than the figure in the previous year.
Illicit outflows totaled $832.4 billion in 2010, while the cumulative figure between 2002 and 2011 amounted to about $5.9 trillion.
The report explained that “illicit flows are all unrecorded private financial outflows involving capital that is illegally earned, transferred, or utilized, generally used by residents to accumulate foreign assets in contravention of applicable capital controls and regulatory frameworks.”
The report added that this exodus of funds constitutes “a major source of domestic resource leakage, which drains foreign exchange, reduces tax collections, restricts foreign investments, and worsens poverty in the poorest developing countries.”
In other words, those hundreds of billions of dollars could have been used to fund anything from food security to healthcare to education.
“Instead they have been squandered in shady trade deals, illegal tax havens and crooked investments. Trade mis-invoicing was the biggest driver of losses, accounting for 79.7 percent of illicit outflows.”
In terms of pure volume, the countries with the biggest illicit outflows in 2011 are those with relatively large economies; Russia tops the list with $191.14 billion, followed by China with $151.35 billion, and India with $84.93 billion.
In Africa, the continent’s largest economy, South Africa, was the worst offender with $23.73 billion in losses. Next is oil-rich Nigeria, where corruption cost $12.89 billion.
In terms of GDP percentages, sub-Saharan Africa is faring the worst. Countries there lost an average 5.7 percent of total GDP each year from 2002 to 2011, while the global average was just 4 per cent.
Because sub-Saharan African economies are relatively small, it is still the region with the lowest total value of illicit outflows from 2002 to 2011: a cumulative $419.1 billion, which is just 7.7 per cent of the total amount lost to all developing countries during the same time period, but the growth of that loss on a year-by-year basis is among the world’s highest at 20.2 per cent, second only to the Middle East and North Africa, where an average 31.5 per cent annual increase in illegal outflow is largely due to rising oil prices.
These findings have grave implications for sub-Saharan Africa, where 48.5 per cent of the population lived on less than $1.25 a day in 2010. The region’s massive losses mean that less funds are available for sorely needed investments in infrastructure and development. For that reason, says the report, corruption, tax evasion and shady trading practices have “an outsized impact on the continent.”
GFI’s findings are important not only for developing countries, but for aid donors as well. The amount lost to illicit outflows in 2011 amounts to an incredible 10 times the amount that came in as official development assistance.
The report recommends that developed and developing countries work together to improve transparency and strengthen financial regulatory systems, which would help poorer nations make better use of their own assets in order to improve the lives of their citizens.
Brian LeBlanc, GFI economist and co-author of the report, said: “The way forward will involve measures to verify ownership of trusts and shell companies, reforms to customs protocols in order to discourage trade misinvoicing, initiatives to digitize exchanges of tax information across borders, and efforts to hold money-launderers more accountable in courts of law.
“Unless these changes happen and fast, the world’s poorest countries will continue to lose huge amounts of funds that could have been used for much-needed development.
“Poor countries hemorrhaged nearly a trillion dollars from their economies in 2011 that could have been invested in local businesses, health care, education, or infrastructure.
“This is nearly a trillion dollars that could have been used to help pull people out of poverty and save lives. Without concrete action, the drain on the developing world is only going to grow larger,” said Le Blanc.
Ugo Nwokolo, Nollywood actor, has shared a controversial opinion on internet fraud, saying it has been keeping the nation’s economy afloat amid a tougher economic climate.
Ugo Nwokolo, Nollywood Actor
Nwokolo made the assertion in a video interview currently circulating on social media.
According to the actor, the cost of living and soaring house rent have made life unbearable for legitimate income earners.
He said high rent in major cities like Lagos and Abuja has edged out those earning N50,000 and N90,000 monthly.
Nwokolo said, “Personally, I think Yahoo has helped keep the economy afloat. Do you expect a civil servant to afford house rent of N3 million or N5 million in Abuja?”
The actor maintained that only the rich, including fraudsters, could meet up with the rising cost of living.
“If you go to Lagos now, the least you’ll see for a two-bedroom apartment is about N7 million or N8 million. Who is supposed to afford it? The civil servants? Of course, it’s the fraudsters,” he stressed.
However, he argued that he was not justifying crime but merely stating fact.
“I’m not justifying crime, but yes, Yahoo is helping the economy. How do you expect people to live in this kind of economy?” he said.
Aliko Dangote, Africa’s richest man, plans to dedicate one-third of his wealth to charity as part of his succession plan, Halima Dangote, his daughter, has revealed.
Aliko Dangote
Halima, a trustee of the Aliko Dangote Foundation, disclosed this in an interview with Bloomberg published on Tuesday, saying the billionaire had secured the support of his family to commit 33 per cent of his estate to philanthropy.
According to the Bloomberg Billionaires Index, Dangote’s net worth is estimated at $35.1 billion, meaning one-third of his current wealth would be worth about $11.7 billion if his fortune remains at that level.
Halima explained that her father views philanthropy as a key part of his legacy and has incorporated it into the family’s long-term succession plans.
She said Dangote had structured his estate to ensure that charitable giving continues across generations, particularly in areas such as healthcare and education.
“He sort of put all the structure in place whereby we focus a lot on health and education. He actually donated 25 per cent to the foundation. If you look at it, it is what we call in Sharia Code in Islam; it means he has donated 33 per cent of his whole inheritance to his foundation,” she said.
Halima added that Dangote believes giving back is central to the success of his businesses and the family’s values.
She said the billionaire asked her, her two sisters, and his mother to sign the agreement allowing 33 per cent of his inheritance to be dedicated to humanitarian causes.
The planned donation builds on Dangote’s longstanding philanthropic activities through the Aliko Dangote Foundation, which was established in 1994.
According to Halima, the foundation received an endowment of $1.25 billion about a decade ago and has since received an additional $700 million in funding.
She said about 70 per cent of the foundation’s spending goes to programmes in Nigeria, while 20 per cent supports projects across Africa, with the remaining funds directed to initiatives in other parts of the world.
The foundation’s interventions focus on healthcare, education, nutrition, and humanitarian support, including partnerships that contributed to the eradication of wild poliovirus in Africa.
Dangote’s planned charitable commitment adds to increasing global attention on billionaire philanthropy.
Although the proposed 33 per cent allocation is below the 50 per cent commitment associated with the Giving Pledge, it would rank among the largest philanthropic commitments announced by an African billionaire.
Earlier this year, Dangote was named among the world’s most influential philanthropists by TIME magazine’s inaugural TIME100 Philanthropy list, recognising the impact of the Aliko Dangote Foundation, which reportedly spends more than ₦50 billion annually on programmes across Africa.
Nigeria Atomic Energy Commission (NAEC), has said that there are plans for Nigeria to begin to generate electricity from nuclear sources.
Mr Anthony Godwin Ekedegwa, chief executive, NAEC stated this when he recently visited Mr Umar Yusuf Girei, acting managing director, National Inland Waterways Authority (NIWA),in Abuja.
He was at NIWA’s office to solicit the support of NIWA in achieving the numerous advantages of using nuclear energy technology in the country.
According to him, the partnership of critical stakeholders in Nigeria will position the country well in developing and maintaining its nuclear power plant.
The NAEC chief said Nigeria intends to begin the generation of electricity from nuclear sources instead of fossil-based power plants and hydro-based power plants, stressing that for Nigeria to develop, there is a need for the country to diversify its energy needs.
In his remarks, Mr Girei assured NAEC of his agency’s readiness to collaborate on the advancement of a nuclear power plant in Nigeria.
He promised the full support of NAEC for the success of a nuclear power plant in the country, saying that as the organisation saddled with the responsibility of regulating and developing Nigeria Inland Waterways, his entity is strategically positioned to play a critical role in the federal government’s quest for sustainable energy through the new technology.
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