Nigeria faces Uphill Struggle to Exit Financial Action Task Force ‘Grey Listing’ but Critical Action Must be Swift to Deliver 9-Point Plan says Counter-Corruption ThinkTank

Nigeria placed on FATF grey List: February 2023 

The announcement by the Financial Action Task Force (FATF) that Nigeria has failed to meet its international obligations to reduce money laundering and terrorism financing, and other financial crimes, and has been grey-listed is not welcome news, but the Nine-Point Plan agreed with the FATF gives the newly elected Nigerian Government a real opportunity to prove its counter-corruption credentials and tackle the corruption that plagues every level of the public sector.

The FATF grey-listing is a matter of grave concern to all the dedicated men and women, at every level of the Nigerian Government and the organised private sector, who struggle against the problems of corruption every day.

Nigeria is currently 150th out of 180 on the recently published Corruption Perceptions Index 2022, scoring 24/100 (where 0 is very corrupt and 100 is very clean). Nigeria suffers from corruption at every level of government including contract fraud, money laundering and bribery. It is estimated that corruption costs the Nigerian people $billions per year.

Addressing the corruption that is endemic at every level of the Nigerian government will be challenging but tackling corruption and successfully exiting the FATF grey list is essential so that the Government can deliver social change and a successful, resilient and sustainable economy.

Failure to do so would leave Nigerian businesses both at home and overseas at risk of far greater scrutiny and financial consequences as foreign companies and governments seek to protect their interests from corruption and corrupt actors.

Counter-corruption training and education is critical to delivering the FATF Nine-Point Plan, so that public sector officials and elected politicians are equipped with the knowledge they need to be able to prevent, detect, investigate and prosecute corruption in all its forms. In the long term, such training and education will empower the Government to work towards the eradication of corruption and the opportunities that corrupt actors take advantage of.

The Centre of Excellence in Integrity (the SARCOE), the pan-African counter-corruption thinktank based in Stellenbosch, is equipped with the skills and expertise to develop and deliver real life practical university-accredited training courses to professionals in the public and private sector, covering anti-money laundering, counter terrorist financing, and the conduct of risk-based due diligence.  The SARCOE’s experts can also help design, implement and monitor appropriate anti-money laundering programmes.

Professor Lee Marler, Co-Founder and Director of the SARCOE said, “It is critical that if Nigeria is to exit its current grey-listing quickly, then the efforts of the Government to eradicate corruption are backed up by specialist training that includes anti-money laundering, counter terrorist financing and investigative techniques that equip key personnel with the capacity and capability to enable them to deliver the Government’s counter-corruption strategy.”

This training will ensure that the knowledge exists within organisations so that they fully conform with the requirements of the relevant anti-money laundering and counter terrorist financing regulations as well as other financial crimes, and enable the Government and regulatory authorities to improve the integrity compliance and counter-corruption environment in Nigeria.

Professor Lee Marler, Co-Founder and Director at SARCOE said, “The grey-listing by the FATF is not unexpected, but the impact on Nigeria is likely to be significant.  Private and public sector organisations will be subject to far greater due diligence, the cost to Nigerian companies of doing business both at home and overseas will increase as commercial partners, insurers and the financial sector manage their exposure to increased risk, and all this will have a negative impact on GDP and the economy.”

Professor Marler continued, “Two key areas of consideration are the infrastructure deficiencies in the oil production industry and rising insecurity. Economic growth is being hampered by low oil production output due to a variety of factors, but corruption in the industry plays an important part in slowing investment and development.”

Security is being hampered by an upsurge of gang, cult and ritual violence in addition to piracy and oil theft in the Niger Delta area. In the first half of 2022, 7,222 people were killed and 3,823 abducted because of 2,840 violent incidents during this period.

The SARCOE, in its commitment to developing international cooperation to counter corruption has already embarked on broad-based consultations with associates, partners and other stakeholders across the African continent to utilise bilateral and multilateral channels to combat this scourge that is limiting the potentials of great economies and societies such as Nigeria, South Africa and other nations across Africa.