By Chimezie Godfrey
Nigeria has scored below expectation on the Financial Secrecy Index 2020, according to Civil Society Legislative Advocacy Centre (CISLAC) and members of the Tax Justice and Governance Platform in Nigeria.
According to the 2020 global financial secrecy Index report released on Tuesday in Abuja, Nigeria ranks 33 out of 133 jurisdictions with a secrecy score of 70.
The Executive Director, CISLAC, Auwal Ibrahim Musa Rafsanjani lamented that it is worrisome that Nigeria has again scored below expectation on the Index.
“In 2018, the Financial Secrecy Index placed Kenya among the top 30 countries with high secrecy by ranking 27% out of 100 and a secrecy score of 80. Angola took the spot in the 2019 index as the most secretive jurisdiction with a high score of 80 while Ghana scored 52 as the least secretive jurisdiction on the continent.
“Nigeria is the largest economy on the African continent with approximately 200 million people. It boosts of high imports and robust trade, thanks to its teeming population; and one of Africa’s largest oil and gas producers, with over two million barrels per day. The country also has the largest oil and gas reserves in Sub-Saharan Africa, with an estimated 37 billion barrels of oil and 188 trillion cubic feet of gas.
“Due to a poor compliance regime, weak institutions, and a lack of transparency , the country’s tax to GDP ratio remains six (6) percent, making it one of the lowest in the world.
“In the 2020 global Financial Secrecy Index released at 18:00 today, Nigeria ranks 33 out of 133 jurisdictions with a secrecy score of 70. Indicators such as legal entity transparency and integrity of tax and financial regulation are the worse hit from the analysis, followed closely by ownership registration; with international standards and cooperation with most improvement.”
Rafsanjani said that the Financial Secrecy Index ranks jurisdictions according to their secrecy and the scale of their offshore financial activities, adding that is a politically neutral ranking, which is a tool for understanding global financial secrecy, tax havens or secrecy jurisdictions, and illicit financial flows or capital flight.
He pointed out that Africa remains on the spotlight due to illicit financial flows such as corruption, money laundering tax evasion and avoidance, amongst other financial crimes.
“It is estimated that Sub-Saharan African countries lost over $1trillion in capital flight between the 1970s and 2010; and recently, the Nigerian Extractive Industries Transparency Initiative (NEITI) estimated that Nigeria loses $15-16bn annually to illicit financial flows.
“The Nigeria government made commitments that it will unveil a Beneficial Ownership Register for companies to be domiciled with the Corporate Affairs Commission.
“This promise has not been met and NEITI, in response to the delays and in compliance with the requirements of Extractive Industries Transparency Initiative (EITI), opened a beneficial ownership register for the oil and mining industry in January 2020.
“So far, much still needs to be done such as passing the amended Company and Allied Matters Act (CAMA) which empowers the CAC to operate a publicly available online platform for beneficial ownership,” he stressed.
He further said that the Petroleum Industry Bill (PIB), which seeks to improve disclosure and transparency in the industry, is yet to be assented to by the president resulting in monumental loses in the sector that could have been avoided.
The Human Rights Activist in collaboration with other CSOs recommended that there should be counter-measures against jurisdictions and their economic actors that refuse to cooperate, regardless of their economic power.
He a second thought on AfCFTA should be considered, while on corporate tax transparency, he stressed that the OECD must address the major flaws of current standards on country-by-country reporting towards the new Global Reporting Initiative (GRI) tax standard.
“Governments must follow the lead of major companies that are now voluntarily reporting such data, and make publication mandatory.
“The Financial Action Task Force must add public registration of beneficial owners and legal owners of all legal vehicles to its binding recommendations,” he stressed.
The statement was signed by a group of civil society organizations which includes Civil Society Legislative Advocacy Centre (CISLAC), Tax Justice Governance Platform, OXFAM in Nigeria, Action Aid, Nigeria Labour Congress (NLC), Christian Aid and Centre for Democracy and Development (CDD).No tags for this post.