BY TAIWO OKUWOBI, LAGOS
Minister of Finance, Budget and National Planning, Zainab Ahmed, has raised alarm over illegal export of foreign exchange which if not properly checked could remain a big threat to the Nigerian economy.
She made this known recently at a virtual international conference on illicit financial flows and asset recovery.
According to Mrs. Ahmed, “In Nigeria and across the African continent, we continue to suffer various forms of illicit financial flows, including tax evasion and other harmful tax practices, illegal export of foreign exchange, abusive transfer pricing, trade mispricing, misinvoicing of services, illegal exploitation and under invoicing of natural resources, organised crimes and corruption.”
The minister noted that the impacts are traceable in every sector of the economy, particularly, given the ongoing COVID-19 pandemic.
The finance minister added that commercial activities account for approximately 65 percent of illicit financial flows across Africa.
“The resulting domestic revenue losses are significant, putting developing countries and the entire African region at risk of not achieving sustainable and inclusive development, especially in the wake of the coronavirus pandemic.
“Furthermore, we, in Africa, often find ourselves in a ‘race to the bottom’ to attract foreign direct investments (FDIs), as a result of the current international tax practices and treaties,” she added.
Mrs. Ahmed, however, noted that as one of the most affected countries of the world Nigeria has shown a strong commitment to addressing illicit financial flows through her participation in the Open Government Partnership and the significant progress made in her extractive industry.
“We have demonstrated that technology-enabled improvements in tax collection and compliance help deter tax crime and facilitate public trust”, she said.
The minister further urged multilateral organisations to develop specific rules and processes to manage and prevent illicit financial flows, adding that to eradicate this monster requires sustained cooperation between Africa and multilateral organisations
