Nigeria's reputation as one of Africa's economic powerhouses is blighted somewhat by a surge in international and inter-state financial crimes, marked by high rates of money laundering, cybercrimes, currency counterfeiting and other financial infractions.
This paradox of economic growth – the World Bank projects Nigeria's economy to expand by 3.5% in 2025 despite global uncertainties – and a widening spectrum of financial fraud has triggered a surveillance overdrive across the West African nation over the past few months.
The Economic and Financial Crimes Commission (EFCC), Nigeria's primary financial fraud watchdog, has already arraigned a suspect arrested in March at Murtala Muhammed International Airport in Lagos, the country's economic hub.
According to court filings, the flyer allegedly failed to declare US $578,000 in cash, resulting in four charges, including money laundering and counterfeiting.
Shuaibu Idris Miqati, who heads the Lagos-based financial intelligence advisory firm Time-Line Consult Ltd, sees the trend as reflecting the inherent disadvantages of an almost open and interconnected global economic system.
"International air travellers being routinely intercepted with undeclared cash while leaving or arriving in Nigeria suggests that loopholes remain, although prevalence was higher in previous years," Miqati tells TRT Afrika.
"There are signs of exacerbating corruption and a crime network whose reach now extends beyond Nigerian shores."
Systemic factors
Nigeria's customs regulations prohibit cash carry-on exceeding $10,000, which means anyone wanting to breach the limit has to employ one or more of multiple illegal options.
Arrests, particularly at airports, frequently involve travellers attempting to move money from illegal activities such as human trafficking, drug smuggling and illegal mining.
Money laundering typically refers to the offence of concealing the origins of ill-gotten money, often through complex banking transfers or commercial transactions. These methods are not only illegal but also damaging to the economy.
"Transactions outside the purview of the banking system undermine the economy. When a significant portion of financial dealings goes unreported, economic indicators like GDP become skewed, affecting taxation, planning and economic policies," explains Miqati.
Laundering also enables kleptocracy or political looting and fuels organised crime, including racketeering, human and drug trafficking, cybercrime, tax evasion and terrorism.
Central Bank of Nigeria, the country's apex bank, has launched a campaign against currency smuggling while promoting financial inclusion.
Inflation hedging
So, why do individuals and even business entities risk smuggling hard currencies despite sophisticated airport surveillance systems?
Miqati points to Nigeria's prevailing inflationary crises, including erosion of household and business incomes, as a driving factor.
"There is an increasing tendency to 'invest' in foreign currencies, which some people see as a stable defence against domestic inflationary pressures," he tells TRT Afrika.
Money mules, who physically transport illicit money across borders, often employ both official and unofficial means to evade airport security.
At Lagos airport, EFCC personnel zeroed in on the suspect arrested last month when he declared only half of the $578,000 cash he was carrying from Johannesburg in South Africa. A search of his belongings revealed an equal amount in US dollars concealed in multiple packets.
Enhanced surveillance
In March, Nigerian border security and financial intelligence reported a breakthrough in the crackdown on money laundering when a traveller was intercepted with $1.154 million and 135,900 Saudi riyals in undeclared cash at Mallam Aminu Kano International Airport, the busiest in northern Nigeria. The undeclared cash was hidden inside packs of imported date palm.
The case has since been handed over to the EFCC for further investigation and legal proceedings.According to Nigerian financial law, the offender's conviction would likely lead to the forfeiture of the entire quantum of undeclared cash to the federal government.
Experts like Miqati believe Nigeria's financial system could face more daunting challenges from money laundering and other economic crimes as criminal networks get smarter and find newer ways to dodge surveillance.
By Mazhun Idris,
TRT Global
