The Executive Chairman of the Federal Inland Revenue Service (FIRS), Dr. Zacch Adedeji, has sounded the alarm over Nigeria’s staggering annual loss of $18 billion to illicit financial flows (IFFs)—a challenge he described as a direct threat to national economic stability.
Speaking at a national conference on Illicit Financial Flows organized by the FIRS in Abuja, Dr. Adedeji pointed to aggressive tax avoidance strategies by multinational corporations, often enabled by outdated tax treaties, as key drivers of the problem.
“Like many resource-constrained nations, we lose billions—$18 billion annually—through illicit financial conduits,” he said. “This is more than a policy issue; it’s a national emergency.”
To address the issue, the FIRS is actively reviewing and renegotiating Nigeria’s Double Taxation Agreements (DTAs) to close loopholes exploited for profit shifting and capital flight.
“Several of our treaties have become outdated and are now being misused. I’ve personally initiated renegotiations with various jurisdictions to modernize these agreements and better protect Nigeria’s economic interests,” Dr. Adedeji added.
As part of wider reform efforts, the FIRS has also established a Proceeds of Crime Management and Illicit Financial Flows Coordination Directorate. Backed by the Proceeds of Crime Act (2022), the unit is designed to work collaboratively with law enforcement, the judiciary, private sector actors, and global development partners.
Adding to the discourse, Irene Ovonji-Odida—member of the Mbeki High-Level Panel on Illicit Financial Flows—revealed that African countries lost an estimated $407 billion to IFFs between 2001 and 2010, with Nigeria among the highest contributors in West Africa.
She highlighted that:
- Trade mispricing accounted for 65% of the losses,
- Organized crime for 30%, and
- Official corruption and bribery for the remaining 5%.
Ovonji-Odida cautioned that unless African nations tighten regulatory frameworks, the region will continue to suffer from chronic underdevelopment.
Also speaking at the event, Minister of State for Finance, Dr. Doris Uzoka-Anite, emphasized that tackling IFFs requires coordinated action across all sectors of society.
“This challenge goes beyond the FIRS. It requires a whole-of-government and whole-of-society approach,” she stated.
She noted that the Ministry is implementing a comprehensive strategy anchored on three core pillars:
- Policy alignment,
- Legislative reform, and
- International cooperation.
The conference gathered top stakeholders from government, civil society, and international organizations—underscoring a collective commitment to curb financial crimes and strengthen Nigeria’s fiscal resilience.
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