- * Economist Urges FG To Urgently Commence Property Ownership Verification Exercise
Nigeria Loses $18 Billion Annually To Money Laundering Through Banks
6,772 Billionaires In Nigeria Engage In Annual Tax Evasion
Only 914 Nigerians Pay Between N10m And N20m In Tax Yearly
By Celestine Okafor (Editor-in-Chief) @CeleOkaf11
Reactions have begun to trail the new EFCC's ultimatum to bank employees and other players in the nation's financial sector to declare their assets or face the full wrath of Nigeria's anti-corruption laws.
Experts who spoke to NIGERIAN NEWS-LEADER Newspapers on the new development are egg heads in the economic, business, and public finance management. They are deeply worried that if the government and its anti-graft agencies do not come down hard on corrupt elements, the nation's economy and its recovery efforts face a bleak future.
The new Executive Chairman of the Economic and Financial Crimes Commission (EFCC), Mr. Abdulrasheed Bawa, on Tuesday, said that his Commission expects all operators in the Nigerian financial system, especially bankers, to declare their assets latest June 1, 2021.
The EFCC Chairman dropped this hint when he spoke with journalists at the State House Presidential Villa, Aso Rock, Abuja, shortly after a meeting with President Muhammadu Buhari.
The EFCC boss said the move which is pursuant to the Bank Employees, ETC (Declaration of Assets) Act 1986, is part of measures to sanitize the nation’s financial system and block some of the loopholes currently being exploited by unscrupulous players in the sector to undermine Nigerian economy through money laundering and illicit financial flows allegedly perpetrated mostly by employees of Nigerian banks.
According to the EFCC, Section 1 of the Bank Employees, ETC. (Declaration of Assets) Act 1986 makes it mandatory for every employee of a Bank to make full disclosure of assets upon employment, and annually in subsequent years.
The law under Section 7 (1) stipulates that “It shall be an offense for an employee of a bank to own assets in excess of his legitimate known and provable income”.
The penalty for violation of the Act, as spelled out in section 7(2) includes imprisonment for a term of ten years; “Any employee guilty of an offense under subsection (1) of this Section shall on conviction be liable to imprisonment for ten years and shall, in addition, forfeit the excess assets or its equivalent in money to the Federal Government”
Bawa who also expressed worry about youth involvement in cybercrime, however, appealed to parents to take a special interest in the activities of their children. According to him, parents have a responsibility to ensure that they nurture their children with the right set of values to ensure that they are not easily swayed by the allure of easy money through fraud and cybercrimes. He added that youths must learn that there is no shortcut to enduring wealth.
Already, the new EFCC's ultimatum to bank employees and other players in the nation's financial institution is beginning to generate intense reactions, with most of the respondents giving a thumbs up to the EFCC's new measure.
A Development Economist and Chairman of Nigerian NewsLeader newspaper's Board of Economists, Juliet Nwabiani Okafor, however commended the new EFCC boss on his Commission's move. She said that the law also mandatorily requires public servants, both elected, appointed, recruited, and contracted government workers at all levels of government in Nigeria, to declare their own assets with the Code of Conduct Bureau (CCB). Even the affected public servants are required by law to declare all their assets and liability including that of their spouse who, in this case, is not a public officer and even those of their children under eighteen years.
The law also requires such public servant to declare his assets by swearing to an oath before a High Court judge nearest to his workplace before submitting the asset declaration form so filled, to the Code of Conduct Bureau. It is however noteworthy, that such public servant must declare his or her assets and liability on the assumption of office, at the end of his or her term of office and at the interval of four years or such other intervals as the CCB may determine from time to time, for public officers on continuous employment of the government.
Even in the case of a landed property asset, the public servant is required to provide detailed information, including but not limited to, the number of the landed assets, types of asset, address of the property, the value of the property so declared, and the date of acquisition of the property as well as income derivable from the properties where appropriate. Failure to declare those assets as required in the relevant provision of the law shall attract, on conviction, outright removal from office, disqualification from holding any public office, and outright forfeiture of such property acquired in abuse of office or dishonesty, to the government.
Juliet said the move by the EFCC will definitely curtail the prevalence of corruption in the nation's financial sector, especially among its operators. "It is just the right way to go. No economy survives on corruption. The major effect of corruption on any economy is that it distorts all economic principles. It affects the distribution of income, ruins productivity, and discourages hard work. It also degenerates hallowed social values and damages personal and public morality. In fact, it renders most fiscal and monetary policies useless.
"Even the Holy Book told us that anyone who doesn't work should not eat, and specifically, it admonished that by the sweat of our brow, we shall eat. Tell me any economy that condones corruption the way it is tolerated in Nigeria, both within the "developed" and "developing" nations of the world. As a bank establishment or a bank worker, you can not be minding other people's hard-earned financial deposits with your bank and at the same time pilfering those funds or appropriating it to yourself as your legitimate earning. It is criminal, immoral, and unacceptable in any sane society.
"A man begs to "apply" for a government or private sector job, a privilege for a very negligible few, then he or she is offered such job opportunity. Then he gets in there and corruptly enriches himself, and with that corruption proceeds, he gets everything money can buy. Name it: 'big estate to collect rent, big and expensive cars; sound education; tours the whole world on frivolous holidays, pays the public security like the police to guard him and his family members, and above all, even perverts justice.
"Corruption in Nigeria and in most African countries has become so endemic such that I will recommend that governments and the various anti-corruption establishments on the continent of Africa that are willing to tackle it, should start from the spending or expenditure angle. This approach should begin from the areas where these corrupt individuals channel their ill-gotten wealth. They often spend the money on land and housing investments, automobiles, parties, and all manner of lavish ceremonies, expensive educational institutions for their children and for themselves, and on international tourism and wasteful holiday fun.
"The government agencies that approve or license investments in key economic areas like land and housings from the ill-gotten wealth, should be compelled by the anti-graft bodies like the EFCC and the ICPC and other relevant regulatory institutions to get the financial or expenditure plan of that business investment proposal. The source of the funds for the finance of such investment package or business should be explicit. This is because before you start any big business, you need to have a Business Plan. So, as the individual is required to provide a business plan, he or she should also be made to provide the financial and expenditure plan of that proposed business investment. The expenditure plan should be forwarded to the anti-corruption agencies for scrutiny before operational approval or license is issued. Even when individuals buy expensive cars, they should be tracked down at the point of registration of such luxury vehicles. And if you throw money around so carelessly and openly in parties and at ceremonial events, the EFCC or the ICPC should be able to promptly go after you.
"I can assure you that if this is done, government and its agencies will begin to catch those thieves. That way, our country would have reduced corruption to the barest minimum. If you succeed with committing the corrupt act, you should not be allowed to also succeed with consuming freely what you have stolen from the public and from the system. That way, what you have stolen becomes useless, the corruption act will become a fruitless venture and less attractive or totally unattractive to anyone with criminal intents".
Juliet Nwabiani Okafor however advised the government to step up its anti-corruption war effort with the ongoing NIN registration exercise and also extend it to what she described as the property verification number (PVN). Besides, she urged the government to make it less cumbersome, especially for journalists, to have access to information regarding assets declared by any public servant in Nigeria. According to her, this is because journalists are the only professional members in the Nigerian society saddled by Section 22 of the Constitution of Nigeria with the responsibility to hold all levels of government and individuals accountable for their actions, at all times.
"We urgently need a Property Verification (PV) exercise. In this country, we have what I call the "Red Marker" department in the Federal Ministry of Works and Housing. They are the people that often use red markers to write on any building "STOP WORK", even if such building or construction work is under the ocean. What happens after such markings is a story for another day. That department in a government MDA should have an additional assignment. This is the best time for Nigeria to do a Property Verification Number (PVN) since the Buhari government is adjudged not to be a corrupt regime.
"Many Nigerians are even unaware that a public servant is not permitted by law to own any other business except farming. The law has made it explicit. But do we obey it? What do we see, for instance, virtually everyone working in the Ministry of Education at both the state and federal level, owns a private school. Those in the Lands department have become land speculators and so on. The same thing is replicated in virtually all aspects of governance. So, how do you expect such a national economy to make progress? Capitalism is not synonymous with stealing or corruption", Juliet stated.
Dr. Boniface Chizea, another renowned Economist and Economic and Business Consultant also hailed the EFCC move. But he warned the anti-corruption agency to exercise some bit of caution in other not act beyond its legal boundary in getting the bankers or public servants to declare their assets.
He told the NIGERIAN NEWS-LEADER Newspapers on Thursday that "Bankers and any other person in a position of trust should indeed declare their assets, but such law on asset declaration should not be discriminatory. The asset declaration has been in the law for those bankers to fully comply with, but it was observed in the breach. Nobody was keen all the years in implementing them. But l don't know how this law will work with the bankers because a banker can earn money and invest in other places. So how do you begin to hold them? Like the case of the Chairman of Zenith Bank, Jim Ovia, who made well over two billion nairas recently as dividends from his investment during the last AGM (Annual General Meeting) of the bank, so how do you track his earnings, his asset? I am in support of asset declaration by the bank workers but the whole thing is a bit dicey. The EFCC should be cautious about it so that it does not go beyond its brief.
However, the Executive Director, Civil Society Legislative Advocacy Centre (CISLAC) and Head, Transparency International - Nigeria, Comrade Auwal Ibrahim Musa Rafsanjani, welcomes the decision by the Economic and Financial Crimes Commission (EFCC), saying it is rightly in line with Sections 1 and 7 of the Bank Employees, etc. (Declaration of Assets) Act 1986, which compels Bank employees to make full disclosure of assets within fourteen days and provide a 10-year imprisonment sentence on a conviction for offenses of unjust enrichment, respectively.
The CISLAC boss stated that "It is imperative to note that the 1986 law was enacted to ensure adequate measures in sanitizing the nation’s financial system by helping to prevent money laundering and illicit financial flows (IFFs) through which terrorism is largely funded, to effectively tax bank executives, and to expose illegal financial transactions".
Rafsanjani said "the banking sector has been largely implicated in money laundering where they have been instrumental in the Initial entry or placement phase that involves the initial movement of an amount of money earned from criminal activity into some legitimate financial network or institution. This illicit act embedded into a legal trade has pervaded both the national and international business and banking industry with unabated vigor. Money laundering holds the potential to undermine socio-economic growth and development, political stability, democratic structure of the country, and good governance, with the resultant effect of instigating social and political unrest within the country such as the recent happenings in Nigeria.
"With respect to IFFs which include the movement of money across borders that is illegal from its source, transfer or use, the CBN has a duty to monitor and supervise the foreign exchange market in Nigeria and is empowered to issue regulations and guidelines to market participants and financial institutions, including the regulatory framework for the importation of capital.
"Despite the powers of and the checks that have been put in place by the CBN and other relevant institutions regulating the sector, it appears that the system is being manipulated as Nigeria loses between $15 – 18 billion annually to IFFs. While this has well-established roles in hindering economic development, Illicit financial flows are crucial to a variety of illegal activities that undermine global and national security, from organized crime to financing terrorism".
Rafsanjani maintains that his organization CISLAC, however, urges "other institutions like National security agencies who have a duty to counter these flows and are related to this context, to throw their full support behind this move by the EFCC, by using available instruments, one of which is the Bank Employees, etc. (Declaration of Assets) Act 1986. With the ongoing security crisis in the nation, there couldn’t be a better time for the introduction and implementation of this initiative".
The activist disclosed that on the aspect of tax evasion which is another form of corrupt practice, only 214 persons paid their taxes above N20 million in 2017, in a country as populous as Nigeria. According to Rafsanjani, the Vice President, Professor Yemi Osinbajo disclosed also that in 2017, only 914 Nigerians pay between N10m and N20m in tax yearly and while 912 reside in Lagos, the remaining two reside in Ogun state.
He also stated that the Federal Inland Revenue Service (FIRS) disclosed in 2018 that over 6,772 billionaires in Nigeria do not pay tax. This only buttresses the need to shore up efforts to ensure high net-worth individuals including banking executives, comply with their tax obligations.
"Only last year", Rafsanjani said, "a number of global financial institutions including Goldman Sachs, Wells Fargo, Citigroup, and JPMorgan, were issued fines for malfeasance ranging from money laundering breaches and facilitation of tax evasion, to close relationships with unsavory characters, following investigations".
From the foregoing, Rafsanjani counsels that the EFCC's directive on bankers "holds true benefits for reducing corruption in the banking sector and should not be perceived as a move to usurp or preempt the regulatory role of the Central Bank (CBN) but to complement it. This complementarity of roles is reminiscent of 2009, when the then CBN governor, Sanusi Lamido Sanusi (Muhammadu Sanusi II and former Emir of Kano) invited the EFCC to prosecute managing directors and their collaborating senior management of banks that were shown to represent significant systemic risk.
"The directive will more than anything else serve to strengthen and complement the regulatory role of the CBN, the assessment roll of the Auditor-General of the Federation on all public account records and oversight role of the National Assembly, as well as numerous existing anti-corruption instruments, including but not limited to the Declaration of Assets Act (1986), the Treasury Single Account policy for reducing the proliferation of bank accounts operated by ministries, departments and agencies (MDAs) towards promoting financial accountability among governmental organs; the Financial Transparency policy (2019); the Banks and other Financial Institutions Act; the Money Laundering (Prohibition) Act, 2011 (MLPA), Terrorism (Prevention) Act, 2011, Central Bank of Nigeria Anti-Money Laundering/ Combating the Financing of Terrorism (AML/CFT) Regulation, 2009 (as amended) and other AML/CFT Guidelines".
The CISLAC Executive Director advises that as the nation is confronted by one of the worst financial situations in Nigeria's history and also looks to improve revenue generation, "every right-thinking Nigerian must accept every effort by government agencies and citizens alike to actualize these expectations through legal and democratic measures. He said CISLAC, therefore, urges the CBN to back-up and support the efforts of the EFCC in complementing their shared responsibility of sanitizing the banking sector which, he said, is expected of institutions fighting one just course".
Rafsanjani also said CISLAC urges the "relevant National Assembly committees, particularly the Senate Committee on Banking, Finance, and other Financial Institutions and the House Committee on Banking and Currency, to discharge their oversight mandates effectively and efficiently. The EFCC should remain undeterred in its resolve to champion reforms that will be instrumental to driving the anti-corruption agenda of the current administration, and the Private sector players, especially the financial sector, should see themselves as partners in progress to foster good governance and development to the teeming population of Nigeria".
He added that his organization (CISLAC believe ), believes that national growth and development requires collective effort and we remain committed in our resolve to lend our voice and support to positive strides that have the potential to promote transparency and accountability and hold the interests of the citizens and the country at heart as it pertains to security, socio-economic development, and national prosperity", Rafsanjani stated. NNL.
