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Nigeria, Others Lose $947Bn to Corruption, Tax Evasion

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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.


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CBN Pulls Rate Cut Trigger, King Dollar Returns

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By Lukman Otunuga, Senior Research Analyst at FXTM,

In a move that caught investors off-guard this week, the Central Bank of Nigeria (CBN) slashed interest rates by 100 basis points bringing the MPR to 11.5%. Given how inflation has been above target since 2015, rates were expected to remain unchanged for the rest of 2020 and possibly early 2021.

 

The question on the mind of many is whether the rate cut will achieve the desired effect by stimulating consumption and economic growth? Ongoing border closures and disruptions created by COVID-19 have pushed inflation to levels not seen since March 2018 above 13.20% while a drop in the production and price of Oil continues to rub salt into the wound. While looser monetary policy could support growth, it may come at the cost of rising inflation and weaker Naira.

 

Over the past few months, central banks across the globe have deployed unprecedented measures to defend their respective economies against the coronavirus menace. However, fiscal policy has been identified as the sharper tool with governments across the world providing a critical lifeline to keep the wheels of their respective economies rolling.

 

Outside of Nigeria, King Dollar made a return by appreciating against every single G10 currency. In times of uncertainty, everyone wants a juicy piece of the world’s most liquid currency. As coronavirus cases rise in Europe and other parts of the world, the flight to safety is likely to boost appetite for the Dollar. This is bad news for many emerging markets currencies, especially those with high Dollar-denominated debt.

 

On the commodity side, Oil prices remain heavily influenced by demand-side factors and the state of the global economy. Prices are likely to remain stuck around the $40 regions in the near term, especially If another round of possible lockdowns hit Oil demand. Looking at the technicals, WTI Crude is under pressure on the daily charts. If prices are unable to break away from the sticky $40 regions, the next key point of interest remains around $38. A weekly close above $41.50 could pave a path towards $43.


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NCC Arrests Man for Hacking into DSTV System

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Nigeria Copyright Commission (NCC), has arrested one Mr Aliu Olalekan, for allegedly hacking into DSTV system and watching the channels free without subscription.

NCC Arrests Man for Hacking into DSTV System

Mr Matthew Ojo, NCC Director in the Lagos Directorate Office said this while speaking with newsmen in Lagos, on Tuesday.

He said that the suspect used to watch DSTV channels free without subscription on his Android phone via an app which he downloaded on google play store.

“This suspect distributed the know-how to his telegram followers and on his blog with the aim of gaining more followers and viewership on his blog and makes more money through google ad-sense.

“The operation was based on surveillance which had earlier been carried out by the Multi-choice team and verified by a copyright inspector, ” he said.

He added that the arrest was made in collaboration with a team of copyright inspectors led by the Head of Enforcement Department, Mr Charles Amudipe.

Others included; a team from Multichoice Nigeria led by Mr Umar Ibrahim and policemen from Lagos Command Headquarters, Ikeja.

Ojo said that the joint team conducted an anti-piracy operation at the premises of the culprit in Amukoko, Lagos.

According to him, the suspect was contacted on phone by a member of the operation team on the disguise of patronising him. “The suspect came out to meet the caller and in the process of discussion, he was apprehended.

“The suspect took the team to his resident. The squad paraded his one-room apartment and recovered his laptop and phones used in perpetrating the ungodly act. “He was arrested and brought to the copyright commission office for further investigation, ” he said.

Ojo said that, on getting to the commission’s office, the statement of the suspect was taken and the inventory of items seized from him taken. He said that investigation on the matter was still ongoing and if found guilty the suspect will be charged to court.

 


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NCC, Digital Encode Support NITRA Innovative Tech Forum On Post-COVID-19 Strategies

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The Nigerian Communications Commission (NCC), Nigeria’s telecommunications regulator and Digital Encode, Cybersecurity and Compliance advisory company, have indicated interest to partner with the Nigeria Information Technology Reporters Association (NITRA), the national umbrella body of ICT reporters, as it organizes a forum that will x-ray the industry’s future plans for ICT growth post pandemic era.

 

The event, slated to hold on October 15, 2020, will seek to discuss the needs for a fortified ICT sector after the COVID-19 era, and the level of preparedness of ICT stakeholders to embrace the challenge of being pivotal to the stability and growth of all other sectors.

 

A statement from NITRA National Secretariat in Lagos indicates that due to the pandemic and need to observe the COVID-19 protocol on social distancing, the event will be held via a Webinar.

 

This year’s theme, “Multi-stakeholder Approach To National Recovery Post-Pandemic”, is in line with the annual event’s generic theme, ‘NITRA Innovative Tech Forum’, a contribution by NITRA to the development of Information and Communication Technologies (ICTs) innovations and policies in Nigeria.

 

Prof. Umar Danbatta, executive vice chairman, NCC is expected to deliver the keynote speech at the event and will throw more light on Federal Government’s plans, programmes and policies on post-pandemic strategies using ICT.

 

Dr. Adewale Obadare and Dr. Seyi Akindeinde, founders of Digital Encode, while accepting to support the event expressed their readiness to offer their expertise in Cybersecurity for organisations to prepare against cyber- attacks with the new normal.

 

They will also highlight areas that are high risks that need fortification in terms of cybersecurity.

 

Speaking on the event, Mr. Chike Onwuegbuchi, national chairman, NITRA, noted that as the COVID-19 pandemic continues to leave its negative trails across the globe, economic reboot for countries will not only depend on how well they readapt to the new normal, but also more on their recovery plans.

 

According to him: “While the federal government has consistently expressed its willingness to set all policies in place to engender growth, and accelerated implementation of these policies, private sector firms have also shown great hunger for the task ahead in post-COVID-19 era.

 

However, the question that needs to be answered is whether all stakeholders are ready for the required task ahead.”

 

The event will also offer participating companies opportunities to publicize some of their individual efforts at contributing to reacting a soft landing or lifeline for SMEs and other ancillary companies as the pandemic threatens their survival.

 

Digital Encode is a multi-award winning and leading consulting and integration firm that specializes in the design, management, and security of business-critical networks, telecommunications environments and other Information Technology (IT) infrastructures.

 


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