THE NFIU CONTROVERSY

The authorities must intervene quickly to ensure that the country is not suspended

The suspension in July, 2017 of Nigeria from the Egmont group, following failure to grant operational autonomy to the Nigerian Financial Intelligence Unit (NFIU) was bad news for the financial sector. With the pending expulsion, Nigeria may be denied access to some foreign sources of funds hitherto relied on for funding our deficit budget in addition to other grants and aids. There is also the risk of other agencies like the Financial Action Task Fund (FATF) blacklisting and categorising Nigeria as a non-cooperative territory which will further put the country under intense financial pressure. The authorities must intervene quickly to resolve whatever the problems are so that Nigeria is not suspended.

The NFIU is currently domiciled in the Economic and Financial Crimes Commission (EFCC) as a department while Nigeria was accused of divulging confidential information and constant leakage of sensitive intelligence to the media, contrary to the global best practices. But suspension could impact the fight against insurgency and terrorism as support from international agencies and organisations may be affected if we are perceived not to pay attention to antimoney laundering and terrorist financing.

The Egmont Group, the highest inter-governmental association of intelligence agencies in the world with membership by 152 countries, provides a platform for sharing criminal intelligence and financial information bordering on money laundering, terrorism financing, proliferation of arms, corruption, financial crimes, economic crimes, etc.

Nigeria was fully admitted into the coveted body in 2007 after operational admittance in 2005, in what was considered one of the biggest achievements of the Olusegun Obasanjo administration. Some of the agencies that benefit from the activities of the group include the Central Bank of Nigeria (CBN), Nigerian Customs Service, Independent Corrupt Practices and Related Offences Commission (ICPC), the EFCC, Nigeria Immigration Service (NIS), Federal Inland Revenue Service (FIRS), and the Securities and Exchange Commission (SEC), among other relevant governmental agencies.

The country’s membership paved the path for the removal of Nigerian banks from the blacklist of international finance. The blacklisting had prevented the banks from engaging in correspondent banking with foreign institutions and also denied Nigerians access to foreign credit cards. The country’s expulsion could affect the use of Visa and Mastercard credit and debit cards issued by Nigerian banks. It could also affect the international ratings of Nigerian financial institutions, restricting their access to some big-ticket international transactions.

With these implications from an impending expulsion which could happen at the next meeting of the group likely to hold next month (March), news that the Senate and House Committees on Anti-Corruption are unable to harmonize their different versions of the NFIU bill, due to its domiciliation, is a very worrisome development. While the Senate Committee wants the agency removed from the EFCC, to the Central bank of Nigeria, to avoid further interference in its operations, the House Committee believes such a move would amount to a fundamental relocation, with changes that would not avert the expulsion. The House therefore prefers that the agency remains in the EFCC with financial and operational autonomy.

Already, the agency has been granted independent status, with a budget estimate, albeit a measly N800 million (from the N2.9 billion it requested for) for its 2018 expenditure, a step in the right direction. It is however necessary for both committees to quickly find a common ground so as to quickly transmit the harmonised bill to the President for assent, to give legal backing to the independent status of the unit, which is still within the EFCC. It is also necessary that the country realises that this is one agency which it cannot afford to starve of funds, as financial intelligence gathering, home and abroad remains a resource intensive venture.

THE COUNTRY’S EXPULSION COULD AFFECT THE USE OF VISA AND MASTERCARD CREDIT AND DEBIT CARDS ISSUED BY NIGERIAN BANKS. IT COULD ALSO AFFECT THE INTERNATIONAL RATINGS OF NIGERIAN FINANCIAL INSTITUTIONS