Top government officials and financial experts have renewed calls for urgent and coordinated action to curb illicit financial flows (IFFs) from Nigeria, describing the trend as a major obstacle to national development, fiscal sustainability, and institutional integrity.
At the just-concluded National Conference on Illicit Financial Flows held in Abuja with the theme “Combating Illicit Financial Flows: Strengthening Nigeria’s Domestic Resource Mobilisation”, key speakers — Minister of State for Finance Doris Uzoka-Anite; Executive Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji; and a member of the Thabo Mbeki High-Level Panel on Illicit Financial Flows, Irene Ovonji-Odida, among others — offered strong perspectives on the implications of IFFs, the structural roots of the problem, and measures being implemented or recommended to address it.
The conference was convened to reinforce Nigeria’s commitment to tackling the financial leakages that weaken its fiscal base, drain national wealth, and compromise its ability to fund development priorities. It also served as a forum to assess current progress, foster collaboration among relevant institutions, and deepen understanding of the complex global and domestic mechanisms that sustain IFFs.
Delivering the keynote address, Ovonji-Odida, a respected voice on international finance and a member of the Mbeki Panel on IFFs, argued that Africa’s experience with illicit financial flows cannot be separated from the global political economy that has historically disadvantaged the continent. According to her, the current global system remains largely dominated by institutions and rules shaped by the West, often to the exclusion of African countries and other parts of the Global South.
She highlighted the fact that Africa is currently facing multiple global crises, including inflation, debt stress, inequality, the climate emergency, food insecurity, and various conflicts — all of which are compounded by fiscal vulnerabilities worsened by illicit financial flows.
Those, she said, are not merely the result of poor governance or corruption within African states but are linked to deeply entrenched global frameworks and practices that enable wealth extraction.
In her contribution, Nigeria’s Minister of State for Finance echoed similar sentiments but with a direct focus on the national context. She described illicit financial flows as a clear and present danger to Nigeria’s development ambitions, fiscal independence, and internal security. According to her, IFFs are not just technical issues to be handled by financial regulators but are threats that affect the entire structure of governance and the capacity of the state to meet the needs of its citizens.
She stated that illicit financial flows are a development challenge, a national problem, and a national security concern. These flows, often facilitated by corporate tax evasion, money laundering, trade misinvoicing, and base erosion, drain Nigeria’s economy of much-needed resources. The losses are felt across critical sectors, including healthcare, education, infrastructure, and job creation. The government, she said, is fully aware of the scale and impact of the problem and is determined to respond with decisive action.
Uzoka-Anite said that the Ministry of Finance has adopted a whole-of-government approach to addressing illicit financial flows. She noted that coordination across enforcement, regulatory, and policy institutions is key to tackling the problem effectively. According to her, the ministry is committed to working with relevant stakeholders — including the FIRS, law enforcement agencies, the judiciary, and international partners — to ensure a harmonised national response to financial crimes and systemic leakages.
She further stressed that tackling IFFs is essential to achieving the government’s agenda on economic transformation and fiscal sustainability. Nigeria, she explained, cannot afford to continue losing billions of dollars annually to illicit transactions and tax evasion, particularly at a time when public debt is rising and development needs are growing. She reaffirmed the federal government’s resolve to tighten loopholes, enhance regulatory oversight, and build institutional capacity to curb capital flight.
FIRS Chairman provided a comprehensive overview of the specific steps his agency is taking to address the problem. He said illicit financial flows through tax evasion, profit shifting, money laundering, and trade misinvoicing are not just violations of financial regulations but serious structural drains on the Nigerian economy. These practices, he warned, deprive the country of the revenue needed for inclusive development, weaken public trust in governance, and deepen economic inequality.
Adedeji acknowledged the scale of the problem, noting that Nigeria loses billions annually due to aggressive tax avoidance schemes employed by multinational corporations that exploit opaque global tax rules. He said this directly threatens the country’s fiscal stability and makes it more difficult to finance vital development programmes.
Ovonji-Odida explained that the world’s financial architecture is structured around powerful international institutions such as the G7, G20, NATO, the European Union, and the Organisation for Economic Cooperation and Development (OECD), which dominate rule-making in global finance, trade, tax cooperation, maritime commerce, and related sectors. The institutions, she asserted, are opaque, largely unaccountable to the Global South, and often serve the interests of the most powerful economies.
She cited a report by the Financial Transparency Coalition titled “Who Rules the Global Financial System?” which shows how rules in banking and other critical sectors are shaped by western-led coalitions and standard-setting bodies, with little or no input from African nations. This, she noted, results in a system that perpetuates the marginalisation of African economies and leaves them vulnerable to manipulations by multinational corporations, financial intermediaries, and legal professionals operating across borders.
Ovonji-Odida further stressed that key professions such as law, accounting, auditing, and banking have evolved within the context of Global North economies and exported their systems to the rest of the world.
These systems, she argued, are not neutral; they reflect specific interests and paradigms that often ignore or override the unique economic realities of African nations. This effectively undermines sovereignty in financial governance and perpetuates underdevelopment by enabling outflows of capital that should have been invested in domestic growth.
She concluded that the foundations of the current global financial system, built at Bretton Woods, continue to preserve the primacy of the United States dollar and reinforce western dominance through institutions such as the World Bank and International Monetary Fund (IMF). These institutions, in her view, uphold systems that deprive Africa of its rightful share in global wealth, not only through overt illicit activity but also via legitimate-seeming financial and trade arrangements that disproportionately benefit wealthier nations.
The FIRS boss pointed out that under President Bola Ahmed Tinubu’s Renewed Hope Agenda, Nigeria has committed to comprehensive fiscal reforms aimed at overhauling the tax system, modernising legal frameworks, and institutionalising transparency in revenue collection. He cited the recent assent to four tax reform bills on June 26, 2025, as a demonstration of the administration’s strong political will to create a more equitable and efficient tax system.
However, Adedeji cautioned that legal reform alone will not solve the problem. He argued that enforcement must be strengthened, digital compliance must be optimised, and trust between the state and taxpayers must be restored through fairness, predictability, and consistent communication.
To this end, he said the FIRS is implementing a deliberate, multi-dimensional strategy. This includes efforts to promote voluntary compliance through taxpayer education and system simplification. By doing so, the agency aims to create a culture where tax compliance is driven not by fear of punishment but by understanding and civic responsibility.
He revealed that the FIRS has launched an ambitious digital transformation programme, including the establishment of a new Tax Intelligence and Automation Department. This unit leverages real-time analytics, integrated third-party data, and anomaly detection to proactively identify illicit activity. He described this initiative as a shift from traditional enforcement to a model of digital vigilance.
As part of efforts to strengthen institutional coordination, Adedeji announced that FIRS has established the Proceeds of Crime Management and Illicit Financial Flows Coordination Directorate under the
Proceeds of Crime Act (2022). This unit is leading efforts in asset recovery, law enforcement support, judicial collaboration, and engagement with private sector actors and international development partners.
He also disclosed that Nigeria is currently reviewing its Double Taxation Agreements (DTAs) with various jurisdictions. Some of these agreements, he noted, contain outdated clauses that inadvertently enable profit shifting and capital flight. He said renegotiations have commenced to bring these treaties in line with present economic realities and to close legal gaps that multinational companies exploit to reduce their tax liabilities in Nigeria.
Adedeji acknowledged that the perpetrators of illicit financial flows are constantly evolving, using secrecy jurisdictions, beneficial ownership structures, and new digital tools to evade detection. He warned that Nigeria’s enforcement mechanisms must be equally agile, intelligence-driven, and globally coordinated to keep up with these threats.
He called on stakeholders to ensure that the conference did not end as a mere policy dialogue but resulted in concrete outcomes, including real-time data sharing, strong enforcement frameworks, and heightened accountability across institutions. He reiterated his agency’s commitment to leading the charge in reclaiming Nigeria’s fiscal sovereignty and ensuring that public resources are protected and used for the benefit of all Nigerians.
As the conference drew to a close, participants and speakers expressed a shared understanding that combating IFFs is not just about improving revenue collection but about safeguarding Nigeria’s future. They agreed that the fight requires political will, technical innovation, institutional coordination, and international support.
With Africa losing over $88.6 billion annually to illicit financial flows according to the United Nations Conference on Trade and Development (UNCTAD), and Nigeria believed to be losing up to $15 billion annually, the urgency for action is clear. Stakeholders at the Abuja conference reaffirmed that plugging these leaks is essential to achieving national development goals, reducing poverty, and building a more just and sustainable economic future.
The consensus is that the tools, frameworks, and knowledge already exist. What is required now is focused implementation and sustained commitment across all sectors.
