13 March 2018, Sweetcrude, Abuja – Nigeria’s position on the prestigious Egmont Group remains precarious after President Muhammadu Buhari over the weekend failed to assent to the harmoised Nigerian Financial Intelligence Unit (NFIU) bill passed to him by the National Assembly on Thursday.
The Senate President, Dr. Bukola Saraki and speaker of the House of Representatives, Hon. Yakubu Dogara, had worked feverishly last week to pass the harmonized bill after it had stalled for several months in the legislature following disagreement between the anti-corruption committees in both chambers over the where to locate the NFIU.
The deadline to Nigeria to separate its National Financial Intelligence Unit from the EFCC lapsed on Sunday, without Nigeria signing a law that would have done so. The likely outcome of the meeting will be Nigeria’s expulsion from the group.
The decision by the Egmont group on Nigeria is expected to be made this week at Buenos Aires, Argentina, where it meets from Monday, March 12, 2018, until Thursday, March 15.
The Egmont Group, an international body of 155 Financial Intelligence Units that, according to its website, provides a platform for the secure exchange of expertise and financial intelligence to combat money laundering and terrorist financing.
Nigeria has been a member of Egmont Group since 2007, and the NFIU’s independence has been a matter of contention since around 2015. Egmont has felt that the Nigerian NFIU is not independent enough to act properly and there is the risk that the unit may, or already be subject to, political interference.
The Group had lost patience with Nigeria and suspended our Nigerian Financial Intelligence Unit because of what it termed the Economic and Financial Crimes Commission’s (EFCC) habit of leaking sensitive financial intelligence to the media even before charging suspects to court.
The EFCC had also refused to cooperate in efforts to grant the NFIU operational independence. The Egmont Group demanded that Nigeria amend the laws to either make the NFIU a separate corporate body or transfer it to the Central Bank of Nigeria in line with global best practice.
Nigeria runs the law enforcement model where our FIU is domiciled within the prosecutorial agencies, and since joining the Egmont Group has domiciled the NFIU within the EFCC.
In response to Nigeria’s suspension, the Presidency set up a committee, headed by Senator Chukwuka Utazi, the Chairman of the Senate Committee on Anti-Corruption, to reposition the NFIU and ensure that Nigeria is not expelled from the Egmont Group.
Its report was due to be submitted in August 2017, and after concerted civil society pressure as well as lobbying from the financial sector, both houses of the National Assembly passed bills towards the end of 2017 excising the NFIU from the EFCC.
Differences in the Senate and House of Representatives bills led to lawmakers entering into reconciliation. However differences in key blocs of both lawmaking houses, as well as the Presidency, stymied reform efforts.
Last minute efforts to push through the law led to both houses rushing a reconciled version of the bill through confirmatory votes less than a week to Egmont’s deadline.
Despite the National Assembly’s best efforts, the harmonized Bill has not been signed by President Muhammadu Buhari.
Multiple sources have indicated that the unwillingness by the Presidency to mirror the speed of the National Assembly with regards signing the bill and allowing it become law is rooted in the desire of certain elements at the highest level of government to retain the embedded NFIU within the EFCC as a ready political tool to wield against perceived political opponents of the current administration.
Nigeria’s possible expulsion, if it does occur, will be a devastating blow for the country’s international financial transactions, made worse by the country’s recent drop in Transparency International’s Corruption Perception Index. It will only burnish the image of Nigeria as a country associated with fraud, and illicit money transfers, aiding terrorist networks.
Nigerian financial institutions could be blacklisted, affecting their ability to issue payment cards for international transactions.
With the CBN’s tight regulation of the charges and pricing of domestic transactions, the international transaction portfolio of most banks is what has subsidized their card business thus far. This is the income that this suspension now threatens and it will become increasingly untenable for banks to continue to provide domestic electronic transactions under the current price regime.
With a suspension, banks will be forced to access offshore facilities at a premium, making such funds more expensive for them. As always, this added cost will be passed on to customers.
An expulsion could also affect individual Nigerians’ ability to take part in international transactions. Nigerians already suffer under significant, self-inflicted restrictions when spending abroad. First to be hit would be bulk traders and e-commerce firms who will be forced to rely on cash to import their goods, raising their risk profile.
This increased risk will be passed on to customers along the value chain, from wholesalers all the way to individual consumers.
It can also have an adverse effect on the fight against corruption as various checks will be taken out of the hands of Nigerian anti-graft institutions and they will become wholly dependent on foreign, sometimes non-cooperative bodies for such checks.
An expulsion by the Egmont Group would also mean that Nigeria will not have access to financial intelligence from sister agencies abroad. One of the key drivers of corruption in the country is the relative ease with which persons are able to launder vast sums of money outside the country.
This ability depends on foreign partners who would not be affected by an expulsion, and the ability to trace such monies is dependent on information from financial intelligence units abroad. Nigeria’s being cut of from that system makes it difficult to recover such funds.
In this article
- Central Bank of Nigeria
- Corruption Perception Index
- Dr. Bukola Saraki
- Economic and Financial Crimes Commission
- Egmont Group
- Hon. Yakubu Dogara
- National Assembly
- NFIU Bill
- Nigerian Financial Intelligence Unit
- President Muhammadu Buhari
- Senate Committee on Anti-Corruption
- Senator Chukwuka Utazi
- Transparency International