The systemic challenges to the implementation of AML/CFT standards in Nigeria

It is not in dispute that Nigeria has demonstrated a strong commitment to the fight against ML/TF, but the problem has been ineffective enforcement.[1] In fact, the country has been adjudged as having the most elaborate legal framework on AML/CFT within the West Africa region by the Inter-governmental Action Group against Money Laundering in West Africa (GI ABA).[2] However, it is clear that a robust legal framework is simply not enough since effective implementation is of equal importance. The main obstacle to the effective implementation of the AML/CFT global standards in Nigeria has been its suitability to the social-cultural, political, and economic realities of Nigeria. A number of factors can explain why the imposed global AML/CFT standards have not been effective in Nigeria.

First, the interplay between corruption and money laundering has been one of the main obstacles to Nigeria’s AML/CFT legal framework. Corruption is inextricably linked to money laundering and provides the enabling environment for money laundering to thrive in Nigeria.[3] The reporting entities are susceptible to bribes to collude in money laundering by refraining from reporting suspicious transactions or by tipping off clients about investigations/[4] Corruption also exists in the judicial sphere. The discovery of huge sums of money in raw cash[5] [6] [7] in the residential apartments of some of the serving justices of the superior courts during the sting operation conducted by the Department of State Services (DSS) in October 2016 exposed the alarming level of judicial corruption.' 6 The rot in the judiciary reached its climax with the recent trial and conviction of the chief justice of Nigeria on April 18, 2019, by the Code of Conduct Tribunal on allegation of non-assets declaration (subject to appeal)/7

Another major challenge militating against effective implementation of Nigeria’s AML/CFT legal framework is the lack of political will to drive the process. As rightly pointed out by Brinkerhoff, successful anti-corruption efforts depend upon a strong political will.[8] In Nigeria, being connected to the ruling political class provides a safe haven to escape criminal prosecution.[9] A recent statement credited to the chairman of the current ruling party in Nigeria (the All Progressives Congress) tellingly stated, when welcoming new members to the party, that politicians’ sins are forgiven when they join the ruling party’.[10]

Closely associated with the lack of political will is the entrenched immunity' clause in section 308 of the Nigerian Constitution.[11] [12] The concept of immunity’ in section 308 of the 1999 Constitution was well elucidated by the Supreme Court in the case of Bola Tinubu v IMB Securities Ltd?- ‘The immunity clause is meant to provide a shield for the person of the President, Vice President, Governor or Deputy' Governor from frivolous or vexatious litigation in respect of personal or criminal proceedings that would distract him from the serious business of governance.’ However, this purpose is manipulated by the chief executives to promote injustice and impunity’. According to Asabor, the use of the protective shield of constitutional immunity as a legislative instrument in defence of corruption and money laundering by crooked public officials has attained an alarming scale and frequency.[13] Furthermore, when the corrupt officials leave public office and lose immunity, it is often too late to prosecute them as evidence is lost, and witnesses die or are otherwise unavailable. Given that the political elites are in the habit of abusing the constitutional immunity clause, it has negatively impacted on the fight against money laundering and needs to be reformed.[14] [15]

Another recent and growing trend which has been seen as the mockery of the administration of criminal justice system in Nigeria is the concept of pleabargaining as provided for under section 270 of the Administration of Criminal Justice Act, 2015.6 The concept of plea bargain has been criticised for being used to provide soft-landing for influential elitist law-breakers.[16] An illustration is the case of John Yusuf, a former assistant to director of the Police Pension Board.[17] Yusuf had been accused of embezzling N 32.8 billion. He entered into a pleabargaining agreement, consequent upon which he was sentenced to two years’ imprisonment or an option of paying N 750,000 as fine. As expected, he instantly paid the fine.[18] Another case is that of Lucky Igbinedion, the former governor of Edo State. Having been accused of looting approximately N 4.4 billion, he entered into a plea-bargain and was fined the sum of N 3.5 million whilst he forfeited three landed properties to the Federal Government of Nigeria.[19] In this way,[20]

a common goat or yam thief goes to jail while the white or blue collar criminal is given a mere symbolic sentence, most of which is easier served in pleasurably surrounding or offered the opportunity' of fines in lieu of incarceration.

The lack of synergy between investigative and law enforcement agencies has also been identified as one of the reasons why the AML/CFT legal frameworks have not been effective in Nigeria. The offence of money laundering is information driven, and the inability of the regulatory agencies to collaborate and harness meaningful information is detrimental to the effective implementation of the AML/CFT legal framework.[21]

Closely associated to lack of synergy is shoddy investigation and weak institutions leading to low conviction rates.[22] The typical practice in Nigeria is to arrest first and conduct trial on the pages of newspapers before looking for incriminating evidence against the accused, a practice which is usually counterproductive.

Lastly, the issue of poor standard of living is also a key factor militating against effective implementation of the AML/CFT legal frameworks in Nigeria. A poorly

The suspension of Nigeria from Egmont Group 243 paid civil servant has the tendency to compromise on integrity and consequently jeopardise the efforts to stamp out money laundering and other financial crimes.


This chapter has examined Nigeria’s AML/CFT legal frameworks and its ineffective implementation on account of corruption, weak institutions, political interference, and lack of political will. The chapter also considered the suspension of Nigeria from the Egmont Group, its implication and the legislative response culminating in the NFIU Act. It is believed that, with the enactment of the NFIU Act and Nigeria regaining its membership in the Egmont Group, the NFIU will resume its autonomous status with full benefits of being a member of the Egmont Group. It might even be able to promote a better synergy between law enforcement agencies in the area of financial intelligence gathering in Nigeria.

More generally, Nigeria’s AML/CFT legal frameworks have largely been influenced by the need to comply with global standards without due regard to its local peculiarities. Unless Nigeria tackles the myriad perennial struggles against corruption, which are reinforced by socio-economic conditions, the fight against ML/TF will be compromised. This chapter also advocates for inclusive participation and deliberation in the formulation of global standards and for the developed countries to shut their borders against illicit transfer of laundered funds from developing countries in order to make the global fight against ML/TF more effective.

  • [1] See Amobi, C., ‘Money laundering regulation in Nigeria: The problems with enforcement, the British connection and global efforts’ (2010) 21(6) European Business Law Review 827.
  • [2] GIABI, Anti-money Laundering and Combating the Financing of Terrorism Mutual Evaluation Report 2008 () 14.
  • [3] See Mugarua, N., ‘Uncoupling the relationship between corruption and money laundering crimes’ (2016) 24(1 ) Journal of Financial Regulation and Compliance 74.
  • [4] See Chaikin, D., ‘Commercial corruption and money laundering: a preliminary analysis’ (2008) 15(3) Journal of Financial Crime 269.
  • [5] In the course of the operation, the DSS claimed it recovered $800,000 (£645,200); see BBC News, ‘Nigeria seizes S800,000 in “anti-corruption raids” on judges’ (, 9 October 2016).
  • [6] Ibid.
  • [7] BBC News, ‘Nigeria’s top Judge Walter Onnoghen to Forfeit Bank Accounts’ (, 18 April 2019).
  • [8] Brinkerhoff, D.W. and Kulibaba, N.P., ‘Perspectives on participation in economic policy reform in Africa’ ( 1996) 31(3) Studies in Comparative International Development 123.
  • [9] Soriwei, F., ‘EFCC probes Buhari’s ministers for corruption’ (, 16 October 2016).
  • [10] Sunday, N., ‘Once you join APC, your sins are forgiven; Oshiomole says as PDP lambasts him’ (, 18 January 2019).
  • [11] Constitution of the Federal Republic of Nigeria 1999 (as amended).
  • [12] [2000] 7NWLR(Pt.767)581.
  • [13] Asabor, I., ‘Immunity in international law’ The Vanguard Newspaper (2 October 2002).
  • [14] GIABI (fn72) 14.
  • [15] By s.270, ‘Notwithstanding anything in this Act or in any other law, the prosecutor may receive and consider a plea bargain from a defendant charged with an offence either directly from the defendant or on his behalf; or offer a plea bargain to a defendant charged with an offence where the prosecutor is of the view that the offer or acceptance of a plea bargain is in the interest of justice, the public interest, public policy and the need to prevent abuse of legal process.’
  • [16] On the other side of the spectrum, arguments have been advanced in support of plea bargaining in that it saves time and resources for the state and helps in decongesting the courts’ criminal docket.
  • [17] Nnanna, O., ‘Beyond the thief and the judge’ 4 February 2013 (, 4 February 2013).
  • [18] The Court of Appeal Abuja Division increased the sentence; Yusuf will now serve a six-year prison sentence and pay a tine ot'N 22.9 billion (, 22 April 2018). Another disturbing example is former inspector general of Nigeria’s Police Tafa Balogun, who embezzled billions of Naira belonging to the Police Force and in 2005 was handed a six-month jail term for each of the eight counts as well as a fine of N 500,000 for each count. The terms were, however, to run concurrently. See , 2005.
  • [19] Federal Republic of Nigeria v Lucky Igbinedion (2014) LPELR 22760.
  • [20] Oyebode, A., 'Plea bargaining, public service rules and criminal justice in Nigeria’ (, 13 December 2010).
  • [21] Mugarura, N., The Global Anti-Money Laundering Regulatory Landscape in Less Developed Countries (Ashgate, 2012).
  • [22] Adeniyi, N.M., Zul Kepli, M.Y., and Mohd Yasin, N., ‘Money laundering: The paradox of deterrence mechanism’ (2016) 11(3) International Journal of Business, Economics and Lawn’s.
< Prev   CONTENTS   Source   Next >