Connect with us

News

Illicit Financial Flows from Africa – Track It, Stop It, Get It

Published

on

Ibrahim  Lamorde,Chairman, Economic and Financial Crimes Commission
Kindly share this post

Illicit money outflows are draining Africa’s domestic resources, depriving it of crucial investment funds

The figures are staggering: between $1.2 trillion and $1.4 trillion has left Africa in illicit financial flows between 1980 and 2009 – roughly equal to Africa’s current gross domestic product, and surpassing by far the money it received from outside over the same period.

Illicit financial flows are money earned illegally and transferred for use elsewhere. The money is usually generated from criminal activities, corruption, tax evasion, bribes and transactions from cross-border smuggling.

The numbers tell only part of the story. It is a story that exposes how highly complex and deeply entrenched practices have flourished over the past decades with devastating impact, but barely made it into the news headlines.

“The illicit haemorrhage of resources from Africa is about four times Africa’s current external debt,” says a joint report by the African Development Bank (AfDB) and Global Financial Integrity, a US research and advocacy group.

The report, Illicit Financial Flows and the Problem of Net Resource Transfers from Africa: 1980-2009, found that cumulative illicit outflows from the continent over the 30-year period ranged from $1.2 trillion to $1.4 trillion.

The Guardian, a British daily, notes that even these estimates – large as they are – are likely to understate the problem, as they do not capture money lost through drug trafficking and smuggling.

Turning logic upside down “The traditional thinking has always been that the West is pouring money into Africa through foreign aid and other private-sector flows, without receiving much in return,” said Raymond Baker, president of Global Financial Integrity, in a statement released at the launch of the report earlier this year.

Mr. Baker said the report turns that logic upside down, adding that Africa has been a net creditor to the rest of the world for decades.
Professor Mthuli Ncube, chief economist and vice-president of the AfDB, agrees: “The African continent is resource-rich. With good resource husbandry, Africa could be in a position to finance much of its own development.”

The composition of these outflows also challenges the traditional thinking about illicit money.

According to estimates by Global Financial Integrity, corrupt activities such as bribery and embezzlement constitute only about 3% of illicit outflows; criminal activities such as drug trafficking and smuggling make up 30% to 35%; and commercial transactions by multinational companies make up a whopping 60% to 65%.

Contrary to popular belief, argues Professor Baker, money stolen by corrupt governments is insignificant compared to the other forms of illicit outflow.

The most common way illicit money is moved across borders is through international trade. Information scanty and scattered

A ten-member high-level panel chaired by former South African President Thabo Mbeki leads research by the UN Economic Commission for Africa (ECA) into illicit financial flows, assisted by ECA Executive Secretary Carlos Lopes as the vice-chair.

Other members of the panel include Professor Baker and Ambassador Segun Apata of Nigeria. The ECA blames illicit outflows for reducing Africa’s tax revenues, undermining trade and investment and worsening poverty.

Its report will be released in March 2014. Undoubtedly the panel faces a daunting task. Charles Goredema, a senior researcher at the South Africa-based Institute of Security Studies, cautions the panel on the challenges ahead.

Writing in the institute’s newsletter, ISS Today, Goredema warns the panel that it will find that in many African countries, data on illicit financial flows “is scanty, clouded in a mixed mass of information and scattered in disparate locations.”

He ranks tax collection agencies and mining departments among the bodies most reluctant to share data.

Goredema lists Transparency International, Global Financial Integrity, Christian Aid and the Tax Justice Network as some of the advocacy groups that have tried to quantify the scale of illicit financial flows.

The extent of such outflows remains a matter of speculation, he says, with the figures on Africa ranging between $50 billion and $80 billion per year.

Other estimates by the ECA put the figure at more than $800 billion between 1970 and 2008.

“The absence of unanimity on [the amount] is probably attributable to the fact that the terrain concerned is quite broad, and each organisation can only be exposed to a part of it at any given point in time,” Goredema writes, adding, “It is less important to achieve consensus on scale than it is to achieve it on the measures to be taken to stem illicit financial outflows from Africa.”

Underpricing trade deals Nonetheless, research and advocacy groups who have worked on illicit outflows see a direct link between these outflows and Africa’s attempts to mobilize internal resources.

Despite annual economic growth averaging 5% over the past decade – boosted in part by improved governance and sound national policies – Africa is still struggling to mobilize domestic resources for investments.

If anything, the boost in economic growth has caused a spike in the illicit outflows, says Ambassador Apata in an interview with Africa Renewal.

Overseas development aid, while helpful, has its limits, says the ECA. There are many channels to move illicit money.

These include over-invoicing or underpricing trade deals, transfer pricing and using offshore financial and banking centres and tax havens.

Transfer pricing occurs when multinationals decide how much profit to allocate to different parts of the same company operating in different countries, and then determine how much tax to pay to each government. About three-fifths of global trade is conducted within multinationals.

“Many developing countries have weak or incomplete transfer pricing regimes,” according to the Guardian, citing an issue paper authored by the Paris-based Organization for Economic Cooperation and Development (OECD), a group of high-income economies.

The paper says poor countries have weak bargaining power. “Some [countries] have problems in enforcing their transfer pricing regimes due to gaps in the law, weak or no regulations and guidelines for companies,” says the OECD paper, adding that poor countries have limited technical expertise to assess the risks of transfer pricing and to negotiate changes with multinationals.

Offshore tax shelters According to the OECD paper, member countries are failing to identify company owners who benefit from money laundering.

It criticizes OECD members for not doing enough to crack down on illicit outflows. In order to prevent, uncover or prosecute money laundering, says the paper, authorities must be able to identify company owners.

The OECD advises its members to invest in anti-corruption and tax systems in poor countries, as this has high payoffs.

The bulk of illicit money today is channelled through international tax havens, says the Thabo Mbeki Foundation, an NGO set up by the former president to promote Africa’s renaissance.

The foundation accuses “secrecy jurisdictions” of running millions of disguised corporations and shell companies, i.e., companies that exist on paper only.

These jurisdictions also operate anonymous trust accounts and fake charitable foundations that specialize in money laundering and trade over-invoicing and underpricing.

“Developing countries lose three times more to tax havens than they receive in aid,” said Melanie Ward, speaking to the Guardian.

Ms. Ward is one of the spokespersons for the Enough Food for Everyone IF campaign, a coalition of charities calling for fairer food policies, and head of advocacy at ActionAid, an anti-poverty group.

The money lost, she says, should be spent on essential development of schools, hospitals and roads, and on tackling hunger, not siphoned into the offshore accounts of companies.

A 2007 joint report by the World Bank and UN Office on Drugs and Crime estimated that every $100 million returned to a developing country could fund up to 10 million insecticide-treated bed nets, up to 100 million ACT treatments for malaria, first-line HIV/AIDS treatment for 600,000 people for one year, 250,000 household water connections or 240 km of two-lane paved roads.

Support for new rules to rein in offshore tax shelters has come from an unlikely source – the leaders of eight of the world’s biggest economies, the Group of Eight (G8).

Having been stung by the 2008 global financial crisis, the G8 leaders at this year’s summit in Lough Erne, Northern Ireland, introduced – for the first time – rules to fight tax evasion.

The rules will now require multinationals to disclose the taxes they pay in countries in which they operate.

During the run-up to the G8 summit, advocacy groups campaigned to get rich countries to introduce laws on transparency in corporate taxes.

Among them was the Africa Progress Panel, chaired by former UN Secretary-General Kofi Annan.

On the eve of the summit, it published its annual flagship report, Africa Progress Report 2013, strongly criticizing the current rules on corporate transparency. Unconscionable acts

“It is unconscionable that some companies, often supported by dishonest officials, are using unethical tax avoidance, transfer pricing and anonymous company ownership to maximize their profits while millions of Africans go without adequate nutrition, health and education,” Mr. Annan wrote in the foreword to the report.

Tax evasion, he said, has cut into African citizens’ fair share of profits from their abundant resources.

In the end, the G8 leaders adopted the Lough Erne Declaration, a 10-point statement calling for an overhaul of corporate transparency rules.

Among other things, the declaration urges authorities to automatically share tax information with other countries to fight tax evasion.

It states that poor countries should have the information and capacity to collect the taxes owed to them.

The declaration further calls on extractive companies to report payments to all governments, which should in turn publish them.

While the Financial Times embraced the declaration as “an advance” in corporate transparency, Sally Copley, another spokesperson for the IF campaign, says in a statement, “The public argument for a crackdown on tax dodging has been won, but the political battle remains.” Copley wants the G8 to impose strict laws on tax evasion.

For its part, Africa Progress Report 2013 calls for multilateral solutions to global problems because “tax evasion, illicit transfers of wealth and unfair pricing practices are sustained through global trading and financial systems.”

It urges African citizens to demand the highest standards of propriety and disclosure from their governments, and rich countries to demand the same standards from their companies.

Initiatives by institutions in Africa and the adoption of the Lough Erne Declaration raise hopes for strict rules against illicit financial flows from Africa.

“Seizing these opportunities will be difficult. Squandering them would be unforgivable and indefensible,” Mr. Annan warns in his foreword to the panel’s report.

Meanwhile, ECA’s slogan “Track it. Stop it. Get it” aptly captures what needs to be done about money flowing illicitly out of Africa.

 

 


Kindly share this post

Nigeria CommunicationsWeek believes that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. So since 2007, we have devoted our energy to independent reportage of technology and how they affect lives.

News

Meta Files Appeal over $25,000 Damages Awarded to Falana

Published

on

Kindly share this post

Meta Platforms, Inc., global technology company,  has filed an appeal against the judgment of the Lagos State High Court delivered in favour of  Femi Falana, human rights lawyer, setting the stage for a potentially significant legal battle over digital rights, platform liability, and the enforcement of fundamental rights in Nigeria.

Meta Files Appeal over $25,000 Damages Awarded to Falana

Femi Falana

The appeal, dated April 10, 2026, follows the ruling in Suit No. LD/18843MFHR/2025: Falana v. Meta Platforms, Inc., in which Justice O. A. Oresanya ruled in favour of Falana and awarded damages of $25,000 over a video publication alleged to have violated his rights.

Meta’s legal team, led by Mofesomo Tayo-Oyetibo, SAN, filed a Notice of Appeal containing eight grounds challenging both the procedural and substantive basis of the High Court’s decision.

At the centre of the appeal is a jurisdictional dispute over whether the case should have been treated as a fundamental rights enforcement matter.

Meta argued that the trial court erred by entertaining the suit under the Fundamental Rights (Enforcement Procedure) Rules, maintaining that the claims were essentially based on alleged false publication and reputational damage.

According to the company, such claims properly fall within the scope of defamation law, rather than constitutional rights enforcement.

Meta contended that by allowing the case to proceed as a fundamental rights action, the trial court assumed jurisdiction it did not possess.

The company also challenged the court’s finding of liability based on the doctrine of undisclosed principal.

Meta argued that there was no evidence establishing a principal-agent relationship between the company and the publisher of the disputed video, identified as AfriCare Health Centre.

The technology firm maintained that the video was created and uploaded by an independent third party and not by Meta itself.

It further emphasised that as a digital intermediary platform, it neither originated nor exercised editorial control over the material.

In addition, the appeal questioned the trial court’s conclusion that Meta violated Section 24(1)(a) and (e) of the Nigeria Data Protection Act.

Meta insisted that it was wrongly classified as a data controller in the case.

According to the company, there was no evidence showing that it determined the purpose or the means of processing the personal data involved in the disputed publication.

Meta also faulted the High Court’s decision to award $25,000 in damages to Falana.

The company described the award as unwarranted and urged the appellate court to set aside both the damages and the entire judgment delivered by the lower court.

Raising concerns about the conduct of the proceedings, Meta alleged that it was denied a fair hearing during the trial.

The company claimed that the trial court raised and decided certain issues suo motu without inviting submissions from the parties involved.

Meta further alleged that the court failed to properly consider key arguments presented in its defence before reaching its decision.


Kindly share this post
Continue Reading

News

WATRA Positions West Africa’s $216bn Digital Economy for Growth

Published

on

Kindly share this post

The West Africa Telecommunications Regulators Assembly (WATRA) has reaffirmed its commitment to advancing a secure, inclusive, and resilient digital ecosystem in West Africa following the successful conclusion of its 4th Working Groups Meeting in Ouagadougou, Burkina Faso—at a time when the region’s digital economy is expanding rapidly and reshaping growth prospects.

The meeting, hosted by the Autorité de Régulation des Communications Électroniques et des Postes du Burkina Faso (ARCEP), brought together regulators, technical experts, and stakeholders from across the region under the theme: “Building a Secure, Inclusive, and Resilient Digital Ecosystem for West Africa.”

In his opening and closing remarks, the Executive Secretary of WATRA, Mr Aliyu Yusuf Aboki, described the meeting as a significant milestone in the organisation’s evolution, marking the transition from dialogue to the delivery of practical regulatory tools.

Aboki is a telecommunications engineer and policy specialist with over two decades of experience across the ICT sector, including work with global telecommunications firms such as Ericsson and MTN in Nigeria and other markets.

He has played an active role in cross-border regulatory coordination, spectrum policy, and digital transformation initiatives, contributing to policy harmonisation efforts across West Africa and representing regional perspectives in international telecommunications and digital economy engagements.

As Executive Secretary of WATRA, he leads the organisation’s strategic engagement with regional and global stakeholders, helping to shape coherent regulatory frameworks and strengthen Africa’s voice in global discussions on digital policy and telecommunications development.

“Nearly two years after the establishment of the Working Groups, we can take pride in the progress achieved. What began as a vision has evolved into a dynamic mechanism for peer learning, coordination, and knowledge exchange,” Aboki said.

Over the course of the meeting, the Working Groups finalised a set of technical reports covering key areas critical to the region’s digital transformation, including 5G deployment, submarine cable resilience, cybersecurity frameworks, consumer protection, and non-geostationary satellite (NGSO) regulation.

Aboki emphasised that the outputs are intended to serve as practical instruments to guide policy and regulatory action across WATRA’s 16 member states.

“These reports are not merely formalities. They will inform policy, guide regulatory action, and strengthen regional harmonisation,” he stated.

The meeting comes at a time when West Africa’s telecommunications sector is undergoing rapid transformation, driven by emerging technologies such as digital financial services, artificial intelligence, and the Internet of Things (IoT). Aboki noted that this shift requires more adaptive and forward-looking regulatory frameworks, particularly in areas such as data protection, cybersecurity, and digital governance.

He further highlighted that the outcomes of the Working Groups will contribute to the evaluation of WATRA’s 2022–2025 Strategic Plan and inform the development of its 2026–2030 strategy.

“The reports produced here represent concrete evidence of the value generated through this collaborative approach and reaffirm the importance of coordinated regulation in bridging the digital divide in West Africa,” he said.

Economic Context: A Large and Fast-Growing Digital Opportunity

The importance of WATRA’s work is underscored by the scale of the West African economy and the accelerating contribution of digital technologies.

The ECOWAS region, comprising over 400 million people, has a combined GDP estimated at approximately $700–800 billion in nominal terms, with Nigeria accounting for more than two-thirds of economic output. This makes West Africa one of the most economically significant regions on the African continent.

Digital technologies are playing an increasingly central role in this growth. According to industry and multilateral estimates, the digital economy contributes between 4% and 6% of GDP across many African markets, with mobile technologies alone accounting for roughly 4–5% of GDP in West Africa, and rising steadily as connectivity improves.

Within this context, the West African digital market—spanning e-commerce, digital payments, connectivity services, and platforms—has been estimated at over $200 billion, with recent projections placing it above $216 billion in 2024, reflecting rapid expansion in mobile penetration, fintech adoption, and platform-based services.

Beyond scale, the digital economy is increasingly recognised as a critical driver of:

  • Economic growth, through productivity gains and new enterprise creation
  • Welfare improvements, by expanding access to financial services, education, and healthcare
  • Inclusion, particularly by connecting rural and underserved populations

Across the region, a number of leading markets are shaping this transformation:

  • Nigeria, the region’s largest digital economy and home to major telecom and fintech players
  • Ghana, a fast-growing hub for digital payments and financial innovation
  • Côte d’Ivoire and Senegal, which are emerging as key digital and infrastructure growth centres

These dynamics reinforce the importance of coordinated regulatory frameworks—such as those being developed through WATRA—to ensure that digital growth translates into broad-based economic and social gains.

The Executive Secretary also confirmed that the recommendations arising from the meeting will be presented to the WATRA General Assembly for consideration and adoption.

WATRA expressed its appreciation to the Government of Burkina Faso and ARCEP Burkina Faso for hosting the meeting, commending their support and commitment to regional cooperation. Special recognition was given to the Chairman of the Regulatory Council of ARCEP, Dr Pasteur Poda, and the Executive Secretary, Mr Patrice Compaoré, for their leadership.

Aboki also acknowledged the contributions of the Working Group members, Co-Chairs, Rapporteurs, and the WATRA Secretariat, noting that their voluntary efforts have been instrumental in strengthening the organisation’s technical capacity and relevance.

“As we transition into the next strategic cycle, we expect even greater impact from WATRA’s work. This will depend on sustained collaboration and the continued engagement of our experts across the region,” he added.

He concluded by reaffirming WATRA’s commitment to deepening regional cooperation and supporting the implementation of harmonised regulatory frameworks to enable digital growth and inclusion across West Africa.


Kindly share this post
Continue Reading

News

Experts Reveal a Steady Decline of High-severity Incidents Over the Years

Published

on

Kindly share this post

According to the ‘Anatomy of a Cyber World: Global Report by Kaspersky Security Services’, there has been a noticeable decline in the percentage of high-severity incidents over the past few years.

While 2021 recorded the highest proportion at 14.3%, 2025 experienced the lowest in six years at just 3.8%. This trend indicates that many attack attempts were quickly detected and effectively mitigated by Kaspersky MDR experts, preventing their severity from escalating beyond medium levels.

High-severity incidents are defined as attacks involving direct human involvement that result in a significant impact on the customer’s IT infrastructure. In 2025, the number of such incidents detected by Kaspersky MDR decreased by 19% compared to 2024, highlighting improvements in early detection capabilities and more effective remediation efforts among Kaspersky MDR clients.

A detailed analysis of the root causes of these incidents in 2025 reveals the following insights:

Human-driven attacks accounted for approximately 23% of high-severity incidents. Although this represents a slight decrease from 2024, they continue to be the primary cause of serious breaches.

Kaspersky detected such attacks in nearly 21% of customers, demonstrating that motivated adversaries persist in bypassing automated defences. Despite advancements in automated detection tools, these highly skilled attackers still find ways to evade security measures.

Confirmed cyber exercises like Red Teaming made up over 23% of incidents. When activity is verified as part of security testing, it’s often classified as infrastructure false positives, though customers frequently report them as incidents.

Social engineering ranked third, responsible for over 15% of high-severity attacks and affecting nearly 18% of organisations. These are classified as high-severity when successful and not automatically remediated, often leading to security awareness recommendations.

Security policy violations constituted just under 14% of all cases, involving legitimate accounts performing suspicious actions like data exfiltration. Malware incidents represented less than 12%, while artifacts from past attacks, or APT traces, were found in over 7% of cases. Vulnerability detection, though not core focus for Kaspersky MDR, was reported in fewer than 5% of incidents.

“The decline in high-severity incidents highlights the critical importance of adopting a proactive cybersecurity strategy. Human-led solutions such as Managed Detection and Response (MDR) and Incident Response remain essential in combating sophisticated, human-driven threats.

To further enhance the effectiveness and efficiency of in-house security teams, organisations should incorporate advanced, automated solutions like Extended Detection and Response (XDR), which provide improved visibility and enable faster responses.

Additionally, leveraging SOC consulting services can assist in building a robust Security Operations Center from the ground up or optimising an existing one for maximum performance.

An integrated approach to hybrid security operations empowers organisations to detect threats early, contain them swiftly, and ultimately prevent severe breaches from occurring,” comments Sergey Soldatov, Head of Security Operations at Kaspersky.

 

 

 

 

 


Kindly share this post
Continue Reading

Trending