The Executive Chairman of the Economic and Financial Crimes Commission (EFCC), Mr. Olanipekun Olukoyede, has called for the adoption of blockchain technology and artificial intelligence (AI) to track and recover the staggering $88.6 billion stolen from African countries annually through illicit financial flows (IFFs).

The Economic Impact of Illicit Financial Flows

Olukoyede incorporated insights from the recent high-level technical stakeholders meeting in Addis Ababa, held from May 28-30, 2024. Organized by the African Union Advisory Board against Corruption (AUABC) and the African Union Commission – Political Affairs, Peace and Security Department (AUC-PAPS), in collaboration with the GIZ Global Program on Illicit Financial Flows (GP-IFF), the meeting focused on establishing the Pan-African Asset Recovery Practitioners Forum.

In his keynote address at the Pan-African Conference on Illicit Financial Flows and Taxation, Olukoyede highlighted Africa’s profound economic loss from IFFs.

Over $88.6 billion is illicitly siphoned from the continent annually, funds that could otherwise be channelled towards critical infrastructure, healthcare, and education.” said the Chairman.

Additionally, the chairman highlighted successful recoveries, such as the repatriation of $311 million in 2020 linked to Nigeria’s former Head of State, Sani Abacha, from the United States. The infamous Abacha loot has seen multiple recoveries over the years. Recently, President Bola Tinubu expressed gratitude to France for returning $150 million stolen by the former Nigerian Head of State.
This recovery showcases the effectiveness of international cooperation in combating IFFs.

blockchain used in fighting financial crime

The Challenge of Illicit Financial Flows

Unfortunately, IFFs have long plagued African countries, undermining economic stability and development.

Olukoyede stated.  “Illlicit financial flows pose a grave challenge to Africa’s economic stability and development,”

According to him, addressing IFFs requires robust measures, including international cooperation and advanced blockchain technology. He recognized the pivotal role of the Stolen Asset Recovery Initiative (StAR), a partnership between the World Bank and the United Nations Office on Drugs and Crime (UNODC), in facilitating asset recovery efforts.

EFCC’s Strategies to Combat Illicit Financial Flows

Olukoyede’s key strategies to tackle IFFs include:

1. Collaboration

He noted that the recovery of $311 million from the Abacha loot, allocated to infrastructure projects like the Second Niger Bridge and the Lagos-Ibadan Expressway, exemplified successful international collaboration.

2. Stricter Legal Frameworks

Adopting advanced technologies such as data analytics, blockchain, and AI is vital in improving asset tracking and recovery efforts.

3. International Pressure

Olukoyede underscored the importance of strong advocacy and international pressure to ensure cooperation from tax havens and low-tax jurisdictions. Without this pressure, efforts to fight corruption would be ineffective.

“Technical, legal, and political hurdles complicate the process of tracing, freezing, and repatriating illicit funds,” Olukoyede noted. “Strengthening legal and institutional frameworks across African countries is essential to better combat illicit financial flows.”.

Conclusion

The EFCC Chairman’s recommendations highlight the critical need for enhanced collaboration, technological adoption, and international pressure to effectively track and recover stolen assets. By implementing these strategies, African countries can significantly reduce the economic drain caused by illicit financial flows and redirect these funds toward vital developmental projects.

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