General News
Nigeria, Others ‘Lose $1 Trillion in Dirty Money’
Developing countries are losing nearly $1 trillion to crime and corruption, with the disappearance of dirty money hitting some of the world’s poorest regions hardest, a new report has found.
Sub-Saharan Africa suffered the biggest loss as a share of its economy, with the disappearance of dirty money averaging 5.5 percent of GDP.
Nigeria and South Africa were among the top 12 nations with the largest volumes of illicit outflows.
A record $991 billion in unrecorded funds left 151 developing and emerging economies in 2012, up nearly 5 percent from a year earlier, a US-based watchdog that exposes financial corruption said on Monday.
Global Financial Integrity (GFI) found that, between 2003 and 2012, the estimated amount of illicit funds shifted from developing countries totalled $6.6 trillion and rose at an inflation-adjusted 9.4 percent a year – roughly double global GDP growth.
This is a trillion dollars that could have contributed to inclusive economic growth, legitimate private-sector job creation, and sound public budgets
GFI President Raymond Baker said the estimated losses were conservative but were still more than 10 times the total amount of foreign aid these countries received. He called the growth rate “alarming”, having surged from about $297 billion in 2003.
“Illicit financial flows are the most damaging economic problem plaguing the world’s developing and emerging economies,” Baker said in a statement.
“It is simply impossible to achieve sustainable global development unless world leaders agree to address this issue head-on.”
China, Russia, Mexico, India, Malaysia saw the largest outflow of dirty money – the proceeds from shady business, crime and corruption – over the decade and also in 2012.
Sub-Saharan Africa suffered the biggest loss as a share of its economy, with the disappearance of dirty money averaging 5.5 percent of GDP. Nigeria and South Africa were among the top 12 nations with the largest volumes of illicit outflows.
Asia was the region of the developing world with the greatest flow of dirty money over the decade, accounting for 40.3 percent of the world total, driven by China.
But the researchers found growth of illicit flows was faster in other parts of the world, particularly in the Middle East and North Africa and in sub-Saharan Africa, where the growth was seen at 24.2 percent and 13.2 percent respectively.
Why does the international banking system make it so easy for corruption to flourish?
The GFI research found fraudulent mis-invoicing of trade transactions was the most popular method to move money illegally and accounted for nearly 78 percent of illicit flows in 2012.
Money is moved overseas through trade mispricing by fraudulent underbilling or over-invoicing for goods to avoid tax or to hide large transfers.
One of the report’s authors, GFI’s Joseph Spanjers, said the trillion dollars lost from these economies in 2012 could have been invested in local businesses, healthcare, education or infrastructure.
“This is a trillion dollars that could have contributed to inclusive economic growth, legitimate private-sector job creation, and sound public budgets,” he said.
GFI called for the UN to next year include a target to halve all trade-related illicit flows by 2030 as it negotiates a new set of global goals, the Sustainable Development Goals, to replace the Millennium Development Goals.
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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