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Nigeria lost $129bn to illegal financial outflows – Report

By BusinessNews Staff on December 14, 2013

A report by a United States-based organisation that promotes financial accountability, Global Financial Integrity, has ranked Nigeria as one of the top countries in the world with illicit financial outflows and tax evasion valued at $129bn in the past decade.

The report entitled, ‘Illicit financial flows from the developing countries: 2001-2010,’ made available to our correspondent on Thursday, showed that the developing world lost $859bn in illicit outflows in 2010, an increase of 11 per cent over 2009 figure.

According to the report, the capital outflows stemmed from crime, corruption, tax evasion and other illicit activities.

The report stated that developing countries lost $5.86tn to illicit financial outflows from 2001 to 2010.

China topped the list with a loss of $2.74tn, followed by Mexico ($476bn), and Malaysia ($285bn).

Saudi Arabia ($210bn), Russia ($152bn) and the Philippines ($138bn) were ranked fourth, fifth, and sixth, respectively, while India ($123bn), Indonesia ($109bn) and United Arab Emirates ($107bn) completed the top 10.

The report stated that illicit financial flows had increased in every region of the developing countries.

A breakdown of the loss showed that Africa accounted for 23.8 per cent, followed by the Middle East and North Africa with 26.3 per cent. Developing Europe, Asia and the Western Hemisphere accounted for 3.6, 7.8 and 2.7 per cent, respectively.

“The report presents four different methodologies for estimating illicit financial flows from developing countries, including the methodology used in the Global Financial Integrity’s previous research, and encourages scholars and experts to weigh in which best estimates illicit financial flows,” GFI explained.

According to the report, trade mis-pricing was found to account for an average of 80 per cent of the cumulative illicit flows from developing countries over the period 2001-2010 and is the major channel for the transfer of illicit capital from China and Mexico.

The Director, GFI, Raymond Baker, said, “Astronomical sums of dirty money continue to flow out of the developing world and into offshore tax havens and developed countries’ banks.

“Developing countries are haemorrhaging more and more money at a time when rich and poor nations alike are struggling to spur economic growth. This report should be a wake-up call to world leaders that more must be done to address these harmful outflows.”

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