Business & Economy - News - May 21, 2021

Why Nigerian govt. is reviewing oil, gas, tax waiver policies

Says foreign governments benefiting from illicit financial flows from Africa should return same with interests

The Nigerian government is currently reviewing legacy transactions in the country’s oil and gas industry as well as tax investment credits and  waivers to curb illicit financial flows, Chairman, Independent Corrupt Practices and Other Related Offences Commission (ICPC), Bolaji Owasanoye, has said
canvassed the payment of interests on stolen funds by benefiting foreign nations as part of measures to redress the menace of Illicit Financial Flows (IFFs).
Owasanoye, who spoke at the International Conference on IFFs and Asset Recovery, held in Abuja on Thursday, said foreign governments benefitting from IFFs from African countries should be made to deduct  the loans to the affected countries  from the illegal funds in their possession.
Also, the return of whatever is the outstanding amount from the IFFs should be returned with interests to the continent.
African countries are reputed to be the biggest victims of IFFs as a result of illegal movements of funds from their economies  abroad.
“Africa is the biggest victim of IFFs. If you evaluate what the continent has lost against what African counties owe, Africa should be a net creditor to the world,” Owasanoye said.
“The foreign governments can decide to deduct the loans given to African countries from all the money taken from the continent, there will still be a substantial amount to return to Africa.
“Whatever is the balance should be returned with interests, as they have been used to develop their economies over there.
“The money should be placed in an Escrow account, and a regional development bank that knows how to manage money should be in charge of such funds,” he added.
The ICPC Chairman called for a workable framework to reduce the timeframe for the repatriation of identified stolen funds and assets.
He decried the huge loss suffered by the continent due to long and tedious processes to return stolen funds, which usually take several years to complete. 
Besides, Owasanoye said there were on-going efforts by the Federal Government to block illicit outflows of funds through the review of international transactions that enable IFFs.
“We (Nigerian government) are reviewing the legacy transactions in oil and gas, tax investments credits and use of waivers in Nigeria to close loopholes that facilitate IFFs.
“For instance, a lot of damage can be done through confidentiality clauses in loan agreements, oil and gas contracts, and others. The review will prevent dodgy politicians from taking money out.” 
A member of the Thabo Mbeki Panel on IFFs out of Africa, Souad Aden Osman, said efforts to stop IFFs were more critical now than ever due to the huge level of poverty and underdevelopment in Africa.
In her lead presentation titled “Common African Position on Asset Recovery (CAPAR), Osman, of the Coalition for Dialogue on Africa (CoDA),  urged African countries to mount a coordinated effort against IFFs, by taking action and speaking with one voice to recover stolen funds.
“CAPAR is the bedrock for technical instrument for negotiating for funds taken from the continent to be returned. It recommends efficient recovery and unconditional return of stolen assets with due respect to our sovereignty,” she said.
CAPAR, she added, recommended the deployment of recovered assets for the good of the citizens of the affected countries and not be allowed to be re-stolen.
“The recovery and return of stolen assets must be applied for the development of the country.
“We should be mindful that the identified assets are at the risk of retransfer, unless frozen by destination countries,” Osman said.
The Chairman, African Union Advisory Board Against Corruption (AU-ABC), Luis Andriamifidy, identified some of the challenges the Council face in repatriation of IFFs.
They include the matter of sovereignties of the countries involved, a common legal framework to be adopted, and how to proceed with court processes, especially on admissibility of evidence, among others.
Andriamifidy, who emphasised the need for a policy dialogue to ensure a common Africa position, called for a strong advocacy approach both within and outside the continent. 
The Commissioner of Anti-Corruption Commission of the Republic of Sierra Leone, Francis Ben Kaifala, lamented the issue of cultural differences and how assets recovery has not taken roots in many African countries, unlike Nigeria and Kenya.
Kaifala revealed that in two years his organisation recovered over $3 million in cash, excluding other assets and properties, like cars, houses, among others, which was more than what they country achieved in 18 years.
He stressed the importance of developing a common legal assistance would reduce the resources spent in chasing after IFFs by African countries. 
Kaifala also recommended training, development of pressure system on international bodies, streamlining of recovery processes to make them less cumbersome, and a proper framework for the discovery and disposal of assets as part of measures to address the problems  of IFFs.
In her lead presentation during the second plenary session, a member of the United Nations High Level Panel on IFF (FACTI Panel), Irene Ovonji-Odida, expressed the hope that the conference would result in an increased understanding of IFFs and commitment to action needed to curb the menace. 
Speaking on “Financing Sustainable Development by Stemming IFFs: the FACTI Report in Perspective”, Ovonji-Odida revealed the cost of financial integrity gaps.
FACTI, she noted, discovered that $1.6 trillion, about 2.7 percent of global Gross Domestic Product, was lost in money laundering by criminals; between $500 and $600 billion lost to tax havens by corporations and  Base erosion and profit shifting (BEPS), while between $20 and $40 billion was lost to bribes to public officials in developing countries, and $7 trillion private wealth hidden by banking secrecy in advanced countries.
These loses, she said, were responsible for fiscal deficits, regressive taxation, criminality, low public trust, and weak rule of law, among others.
On FACTI Panel’s recommendations, Ovonji-Odida mentioned an overhaul in the international tax norms and institutions, in addition to a corporate tax vision, including reforms on transparency; a domestic structure; law and enforcement mechanism to be reformed with increased transparency and more dynamic response to emerging risks.
The Chief Executive Officer, Pan-African Lawyers Union (PALU), Don Deya, said that sustaining political will was key to the issue of IFFs.
Deya suggested the reformation of international tax laws and institutions, while calling on investigative journalists and whistleblowers to put pressure on  IFFs beneficiary countries.
Executive Director of Tax Justice Network Africa, Alvin Mosioma, said the problem was the lack of political will to concretise and transfer talk to action on the issue of IFFs.
He aligned his recommendations with FACTI and stressed the need for more political support; creation of accountability mechanism for leaders both globally and nationally; and increased capacity building for countries.
He charged African governments to organise and present a united front against IFFs which is adversely  affecting the development of the continent.
On his part, a reporter with Agence ECOFIN, Togo, Fiacre Kakpo, said Africa needed to take the bull by the horn by asking the international community to stop IFFs if they are not truly encouraging it.
Kakpo suggested that Africa insists on accurate tax information, while ensuring that all loopholes in tax laws were plugged.

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