Mr. Olanipekun Olukoyede, the Executive Chairman of the Economic and Financial Crimes Commission (EFCC), has advocated for the adoption of blockchain technology and artificial intelligence to trace and reclaim $88.6 billion that African nations lose annually due to illicit financial flows (IFFs).
During his keynote speech at the Pan-African Conference on Illicit Financial Flows and Taxation, Olukoyede underscored the severe economic impact of these losses and the pressing need for sophisticated approaches.
Olukoyede highlighted that the $88.6 billion lost every year could be redirected to essential areas such as infrastructure development, healthcare, and education.
He referenced successful recoveries, including the repatriation of $311 million associated with Nigeria’s former Head of State, Sani Abacha, from the United States in 2020, as evidence of effective international collaboration.
Unlawful Financial Outflows in Africa
Illicit financial flows have persistently plagued African nations, exemplified by the repeated recoveries of the infamous Abacha loot.
“Illicit financial flows pose a significant threat to Africa’s economic stability and growth,” said Olanipekun Olukoyede.
“More than $88.6 billion is illegally extracted from the continent each year, money that could be invested in essential infrastructure, healthcare, and education.”
On November 3, 2023, President Bola Tinubu thanked France for repatriating $150 million stolen by a former Nigerian Head of State.
Olukoyede emphasized that these illicit flows greatly undermine Africa’s economic stability and development, calling for strong measures to address the problem.
He highlighted the importance of international collaboration, citing the Stolen Asset Recovery Initiative (StAR)—a partnership between the World Bank and the United Nations Office on Drugs and Crime (UNODC)—as crucial in these efforts.
Suggested Approaches
Olukoyede presented several pivotal strategies to combat illicit financial flows (IFFs):
Collaboration
Olukoyede stressed the significance of international collaboration, citing initiatives such as the Stolen Asset Recovery Initiative (StAR), a joint effort between the World Bank and the United Nations Office on Drugs and Crime (UNODC).
- These collaborative efforts have proven essential in reclaiming stolen assets.
- He mentioned the successful recovery of $311 million from the Abacha loot, which was directed towards infrastructure projects like the Second Niger Bridge and the Lagos-Ibadan Expressway, as evidence of effective international cooperation.
Stricter Legal Frameworks
Olukoyede emphasized the need for robust legal frameworks and capacity building to improve coordination at all levels—national, regional, and international.
- He advocated for the adoption of advanced technologies, including data analytics, blockchain, and artificial intelligence, to enhance asset tracking and recovery operations.
International Pressure
Highlighting the necessity of strong advocacy, Olukoyede argued that combating corruption would be ineffective without international pressure to ensure cooperation from tax havens and low-tax jurisdictions.
- He referenced insights from a recent high-level technical stakeholders meeting in Addis Ababa, held from May 28-30, 2024.
- Organized by the African Union Advisory Board against Corruption (AUABC) and the African Union Commission – Political Affairs, Peace and Security Department (AUC-PAPS), in collaboration with the GIZ Global Program on Illicit Financial Flows (GP-IFF), the meeting concentrated on establishing the Pan-African Asset Recovery Practitioners Forum.
Olukoyede pointed out the various challenges in asset recovery, noting the technical, legal, and political obstacles that complicate the processes of tracing, freezing, and repatriating illicit funds. He called for the reinforcement of legal and institutional frameworks across African nations to more effectively address IFFs.
“Technical, legal, and political hurdles complicate the process of tracing, freezing, and repatriating illicit funds,” Olukoyede stated. “Strengthening legal and institutional frameworks across African countries is essential to better combat illicit financial flows.”
Pan-African Conference on Illicit Financial Flows
The Pan-African Conference on Illicit Financial Flows (PAC) is the leading annual event organized by the African Union (AU).
- It convenes key stakeholders from across Africa to deliberate on matters concerning illicit financial flows and taxation within the continent.
- This conference acts as a hub for participants to exchange knowledge, strategies, and best practices aimed at tackling the issue of illicit financial flows (IFFs).
- Ultimately, the recommendations from the EFCC Chairman emphasize the urgent need for stronger collaboration, the adoption of advanced technologies, and increased international pressure to effectively trace and recover stolen assets.
By adopting these measures, African nations can significantly curtail the economic losses attributed to illicit financial flows and reallocate these resources to essential development projects.