Curtailing Illicit Financial Flows Crucial To National Dev’t, Economic Sovereignty

Tosin Kolade
Jul, Tue, 2025

Economy/Business

Curtailing illicit financial flows crucial to national dev’t, economic sovereignty – Minister

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By Kadiri Abdulrahman

The Minister of State for Finance, Dr Doris Uzoka-Anite, says it is important to check the menace of Illicit Financial Flows (IFFs) to enhance national development and economic sovereignty.

Uzoka-Anite said this on Tuesday in Abuja, at the National Conference on IFFs organised by the Federal Inland Revenue Service (FIRS).

The conference has the theme, “Combating Illicit Financial Flows: Strengthening Nigeria’s Domestic Resource Mobilisation”.

According to her, IFF is a critical issue that continues to undermine our development efforts and weaken our economic sovereignty.

“The theme of this conference speaks directly to one of the most urgent challenges facing Nigeria today: the need to protect and retain the wealth generated within our borders.

“IFFs are the hidden drainpipes of our national wealth.

“They undermine revenue generation, erode tax bases, fuel corruption, and reduce the resources available for critical investments in health, education, infrastructure, and social protection.

“This gathering reflects a growing recognition that IFFs are not just a technical problem; they are a political, developmental, and national security concern,” she said.

The minister described IFF as a hydra-headed monster that must be eradicated.

“It takes various forms from terrorist financing to money laundering to corporate tax evasion.

“It is estimated that Nigeria loses 18 billion dollars annually to IFFs due to profit shifting, and aggressive tax avoidance practices by some multinational corporations transacting business in Nigeria.

“Huge sums of money are transferred out of the country which strips the country of resources that could be used to finance much-needed public services.

“This means fewer hospitals and schools, fewer police officers on the street, fewer roads and bridges. It also means fewer jobs,” she said.

The minister said that under the Renewed Hope Agenda of President Bola Tinubu, Nigeria was undergoing a strategic fiscal reform aimed at building a resilient, self-reliant economy.

She said that such an economy was driven, not by debt or aid, but by transparent, equitable, and efficient revenue generation.

“The recent assent to the four landmark tax reform bills by Mr President is unprecedented and marks a significant step forward in realising this vision.

“These laws aim to simplify our tax system, remove leakages, and improve taxpayers’ confidence.

“But laws alone are not enough, and that is why we are gathered here to align policy, enforcement and institutional efforts across board,” she said.

She said that the ministry of finance was fully committed to a multi-agency, multi-stakeholder approach in tackling illicit financial flows through policy alignment and legislative reform, transparency and disclosure, and digitisation and intelligence.

The Executive Chairman of FIRS, Dr Zacch Adedeji, said that the theme of the conference captured one of the critical challenges facing the Nigerian economy.

Adedeji said that there was an urgent need to safeguard national resources and build a resilient, equitable future.

“IFFs through tax evasion, profit shifting, money laundering and trade misinvoicing do not merely represent financial wrongdoing.

“ They constitute a structural drain on our economy, depriving us of the resources needed for inclusive development.

“Each unaccounted dollar undermines governance, erodes trust, and translates into lost infrastructure, inadequate public services, and deepening inequality.

“The scale of these flows, especially through aggressive tax avoidance by multinationals exploiting opaque global arrangements, continues to threaten Nigeria’s fiscal stability,” he said.

He said that Nigeria was losing billions annually through these illicit conduits, making this conference not just a policy dialogue, but a national imperative.

“Under President Bola Tinubu’s Renewed Hope Agenda, we have entered a new era of fiscal reform.

“The recent assent to four tax reform bills on June 26, signals this administration’s strong commitment to overhauling our tax system, modernising the legal framework and institutionalising transparency in revenue collection,” he said.

He said that the FIRS was responding with a deliberate, multi-dimensional strategy.

” First, we are championing voluntary compliance by promoting taxpayer education and simplifying systems. Our goal is to foster a culture where compliance is driven by trust, not fear.

“We are harnessing technology and intelligence. We have launched an ambitious digital transformation programme, including the establishment of a Tax Intelligence and Automation Department.

“With real-time analytics, integrated third-party data, and anomaly detection, we are building a tax system that is proactive, smart, and secure. This is not just about digital infrastructure but digital vigilance,” Adedeji said.

He said that combating IFFs demanded collective action.

In a keynote address, Mrs Irene Ovonji-Odida, Member, Africa Union High-Level Panel on IFFs, said that the world faced multiple global crises such as inflation, external debt and significant economic distress.

Ovonji-Odida said that there was also persistent inequality, a climate emergency, increasing hunger, multiple challenges to the very fabric of societies and major wars in many parts of the world.

“We are historically at a critical juncture and potential watershed moment, with deepening escalating geopolitical tensions.

“Major shifts in the global political-economy portend the rise of a new geopolitical order driven by BRICS+, challenging the unipolarity, Global North hegemony and extraction of wealth from Africa, and other Global South countries.

“The current global system is dominated by exclusive forums of, or led by, the West, such as G7, G20, NATO, EU, OECD BEPS, global international financial institutions, inter-governmental institutions and other global rule-making bodies.

“The current global economic system built at Bretton Woods maintains US unipolar primacy over the global political and financial system.

“Indeed, the global economic system plays a core role in the ‘underdevelopment’ of Africa via governance of its pillars that include trade, debt, banking, finance, taxation, ODA, and commercial diplomacy,” she said.

She said that, despite their rich endowment in natural, human, and other resources, developing countries faced significant financial gaps, which are estimated at $ 194 billion per year for Africa.

According to her, debt service for African countries in 2023 was projected at $ 68.9 billion, with 21 African countries at risk of debt distress owing a total debt of $ 644.9 billion to external creditors.

“African countries’ debt amounts to 24 per cent of their combined GDP as of 2021.

“Concurrently, Country Programmable Aid (CPA) for Africa plummeted to less than 50 per cent of Official Development Assistance (ODA) as of 2023.

A major factor preventing Africa from breaking out of this situation is the constant drain of resources out of the continent, through IFFs,” she said.

Ovonji-Odida said the nature of IFFs, with vested interests and technicalities, is highly secretive and difficult to track, particularly when involving complex transactions and intra-group trade within global conglomerates.

She said that the net result for governments is to resort to regressive tax measures.

“The transnational nature of IFF requires global action, coordination, and commitment of all countries,” she said. (NAN)

Edited by Joseph Edeh

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