What exit from Egmont Group would mean for Nigeria

The Egmont Group, an international body of 155 Financial Intelligence Units that provides a platform for the secure exchange of expertise and financial intelligence, are currently attending a three-day meeting from Monday, March 12 until Thursday, March 15, 2018. One of the discussions that are expected to come up during this meeting will be about Nigeria’s expulsion from the group.

This is because the deadline it gave to Nigeria to separate its National Financial Intelligence Unit (NFIU) from the Economic and Financial Crimes Commission (EFCC) elapsed yesterday, without Nigeria enacting a law that would have made this happen.

However, as part of the moves to ensure that Nigeria is not expelled from the Egmont Group, the Senate, on Wednesday last week hastily passed a bill to establish the NFIU as an independent entity from the EFCC. This bill is yet to be signed into law by the president of Nigeria, Muhammadu Buhari. This bill is expected to act as the central body in Nigeria responsible for requesting, receiving, analyzing and disseminating financial and other information to all law enforcement and security agencies and other relevant authorities in the country.

However, following the delay in passing this into law, the likely outcome of the Egmont Group meeting will be Nigeria’s expulsion from the group or a further extension.

What an exit from the Egmont Group means for Nigeria

 

Banks in Nigeria

Banks in Nigeria would not be left out of the pain as they could be blacklisted. This would affect their ability to issue payment cards such as the Visa and Master cards for international transaction.  The Central Bank’s tight regulation of both domestic and international transaction has already subsidized their card transactions and if Nigeria is expelled it will become increasingly untenable for banks to continue to provide domestic electronic transactions under the current price regime.

According to SBM intelligence, with a suspension, banks will be forced to access offshore facilities at a premium, making such funds more expensive for them. As always, this added cost will be passed on to customers.

Traders and e-commerce businesses

If Nigeria is expelled from the Egmont group, a lot of Nigerians would not be able to carry out international transactions such as paying for goods and services online or buying stuff abroad. Nigerians are already suffering the restrictions placed on using their cards abroad.

Bulk traders who prefer to make use of their cards for payments instead of traveling with cash would be exposed to a high risk of traveling with so much money. E-commerce platforms wouldn’t be able to carry out any transaction online as all their sales would be done based on payment of delivery and a lot of customers find it very risky to have a lot of cash with them.   

Fight against corruption

An expulsion would have an adverse effect on the fight against corruption which was made worse by the recent drop in the Corruption Perception Index.  This would also affect our international transaction greatly. According to Lagos-based geopolitical intelligence consulting firm SBM, various checks will be taken out of the hands of Nigerian anti-graft institutions and they will become wholly dependent on foreign, sometimes non-cooperative bodies for such checks. There will also be an increase in Money Laundry outside the country as Nigeria will not have access to financial intelligence from sister agencies abroad. This would make it difficult to recover looted funds.

Fight against corruption

An expulsion would have an adverse effect on the fight against corruption which was made worse by the recent drop in the Corruption Perception Index.  This would also affect our international transaction greatly. According to Lagos-based geopolitical intelligence consulting firm SBM, various checks will be taken out of the hands of Nigerian anti-graft institutions and they will become wholly dependent on foreign, sometimes non-cooperative bodies for such checks. There will also be an increase in Money Laundry outside the country as Nigeria will not have access to financial intelligence from sister agencies abroad. This would make it difficult to recover looted funds.

Nigeria’s impression internationally

All eyes are currently on Nigeria in how it has left this matter to the very bad end before the Senate quickly passed the bill without critically looking at it. It also shows the level of seriousness that Nigerian lawmakers place on issues like this after announcing the suspension since July 2017.