The Manufacturers Association of Nigeria (MAN) and the Nigerian Revenue Service (NRS) have called on corporate organisations to enhance compliance, transparency, and governance systems to combat illicit financial flows (IFFs) and safeguard the economy from revenue leakages.
Call for Action at Lagos Event
The appeal was made during the Regional Sensitisation and Engagement Programme on Illicit Financial Flows for Corporate Entities under the Proceeds of Crime Act (POCA) 2022, held at MAN House in Lagos. Speaking at the event, MAN Director-General Segun Ajayi-Kadir, represented by the Director of Membership Services, Joseph Emoleke, emphasised that illicit financial flows are not merely legal issues but economic challenges with direct implications for manufacturers and the broader productive sector.
Economic Impact of Illicit Financial Flows
Ajayi-Kadir noted that IFFs weaken investment inflows, pressure exchange rates, increase production costs, and reduce investor confidence. He cited estimates from the United Nations Conference on Trade and Development (UNCTAD), indicating that Africa loses between $80 and $90 billion annually to IFFs, with Nigeria historically accounting for about 66 percent of the losses concentrated in West Africa. “Manufacturing is, by nature, a long-term commitment. Investors do not build factories on uncertainty. Serious producers cannot compete sustainably where rules are inconsistently applied or where illicit operators enjoy advantages unavailable to compliant businesses,” the DG said.
Support for Transparency with Business-Friendly Regulations
Ajayi-Kadir added that manufacturers support efforts to improve transparency and corporate governance but stressed that regulatory systems must remain clear, predictable, and business-friendly. “Compliance systems should be designed to isolate illicit actors while enabling legitimate businesses to operate efficiently,” he said, noting that manufacturers already contend with high energy costs, logistics bottlenecks, foreign exchange pressures, and expensive financing.
NRS Highlights Scale of the Problem
Also speaking, Head of Liaison with Anti-Graft and Law Enforcement Agencies at the NRS, Idris Abdullahi, described illicit financial flows as a major threat to Nigeria’s economy and called on businesses to be active partners in addressing the challenge. Abdullahi said the NRS currently serves as the coordinating agency for the fight against IFFs in Nigeria, noting that estimates show Africa loses about $88.6 billion annually to illicit financial flows, with Nigeria accounting for about 65 percent of the total. “It is quite a challenge to our economy and it is a monster we must deal with,” he said.
Undermining Domestic Revenue and Competition
Technical Consultant to the NRS, Adedayo Kayode, said illicit financial flows undermine domestic revenue mobilisation, distort competition, and weaken regulatory institutions. The programme aimed to sensitise corporate entities on their roles in curbing IFFs and ensuring compliance with the Proceeds of Crime Act 2022.
