Strengthening financial integrity in Nigeria: the national identification harmonization project

Published date13 June 2022
Date13 June 2022
Subject MatterAccounting & finance,Financial risk/company failure,Financial crime
AuthorOgochukwu Monye,Louis De Koker
Strengthening nancial
integrity in Nigeria: the
national identication
harmonization project
Ogochukwu Monye
Faculty of Law, Department of Business Law, University of Benin, Benin City,
Nigeria and La Trobe LawTech, La Trobe Law School, La Trobe University,
Victoria, Australia, and
Louis De Koker
La Trobe LawTech, La Trobe Law School, La Trobe University, Victoria,
Australia and Department of Mercantile and Labour Law, Faculty of Law,
University of the Western Cape, Bellville, South Africa
Purpose Nigeria needs to improve its national identication coverage to support improved anti-money
laundering and combatingof nancing of terrorism and proliferation (AML/CFT)measures. This study aims
to examine its ongoing identication harmonization project, which seeks to create a central database for
digital identication across designated entities. It identies the key stakeholders in the project, progress to
date as well as key challenges, especiallyrelating to the inclusivity and privacy and data protection concerns
of the currentscheme to provide national identication numbers.
Design/methodology/approach The authors apply a doctrinal research methodology and use the
Principleson Identication for Sustainable Developmentto identify and reect on key challenges.
Findings The national identication harmonization project and the ongoing drive to register National
Identity Numbers for Nigerians could provide valuable support for more effective and efcient AML/CFT
identity vericationand authentication. The project and processes, however, hold signicantrisks in relation
to data protection. These are exacerbated by the absence of a comprehensive data protection framework.
National identitydata can be vulnerable to political abuse and targeting by bad actors. National identitydata
systems must, therefore,be protected by clear, fair and comprehensive privacy and dataprotection rules and
appropriate and accountable governance mechanisms. While Nigeria is adopting and implementing the
relevant framework, the NIMCcan do more to advance data protection by supporting informed consent and
compliance by all participantsand publishing this information to build publictrust in the system. It can also
be disciplined about only collecting minimaland necessary personal data and printing only basic personal
details such as name and age on thegeneral multi-purpose ID card. The NIMC should furthermoreimprove
access to the national identicationnumber by streamlining the process of registration,including supporting
same day registration and on-the-spot card printing; setting up more registration points as well as mobile
registrationto cut down queues; and increasing the range of registration agents and points to includeschools,
police stations and health facilities. Consideration for social, cultural and religious norms is also vital to
appropriatelyaccommodate the variety of groups and culturesin Nigeria.
Research limitations/implications Research materials include government policy documents as
well as newspaperarticles and reports on more recent developments and experiencesthat are not yet reected
in more formal documents. The researchmaterials, however, reect both the intention of the government and
the reportedexperiences of those registering for a National IdenticationNumber.
Practical implications This study identies the practical steps that can be taken to enhance data
protection and increase the inclusivity of the measures to provide Nigerians with National Identication
integrity in
Journalof Financial Crime
Vol.29 No. 4, 2022
pp. 1137-1154
© Emerald Publishing Limited
DOI 10.1108/JFC-05-2022-0104
The current issue and full text archive of this journal is available on Emerald Insight at:
Social implications The recommendations thatare made are aimed at increasing the inclusivity of the
National IdenticationNumber scheme and at providing improved protection of personal data of applicants
for, and holdersof, these numbers.
Originality/value This study contributes to the policy discussion around the national identication
harmonization project by applying as a lens key elementsof the Principles on Identication for Sustainable
Developmentthat are relevant from a nancial integrity perspective.
Keywords Nigeria, Social inclusion, Data protection, Financial integrity, National identication
Paper type Research paper
1. Introduction
Identity is a complex concept and its meaningdiffers in different contexts (Financial Action
Task Force, 2020). This article focuseson ofcial identity, meaning the identity assigned to
a person for government or bureaucratic use. This term is preferred as another generally
used variant, legal identity, may incorrectly imply that millions of people whoare known
in and by their communities but who have not been assigned an ofcial identity, have
illegalor non-legalidentities(United Nations, 2021).
The 1989 United Nations (UN) Conventionon the Rights of the Child recognizes the right
to an identity starting from birth. In spite of such commitments, an estimated 1.1 billion
people lacked an ofcial identity as of October 2017 (World Bank, 2017). This impacts
negatively on their ability to access services and freely participate in social, political and
economic life and also undermines the efcacy of anti-money laundering and combating of
nancing of terrorism and proliferation (AML/CFT) measures. The UN has therefore
recognized as Sustainable DevelopmentGoal 16.9, the right to legal identication for all by
2030 (United Nations,2021).
Having ofcial identication is viewed by the UN as fundamental to national
development. It provides the foundational data and documents allowing for the unique
verication of citizensofcialidentity. It facilitates access to a variety of social, agricultural,
and nancial services. It equally offersa sense of belonging, and aids socio-economic, civic,
and political participation. With an efcient identication system, the government can
better foster the social safety net, nancial inclusion, good governance and transparency
(National Identication Management Commission [NIMC], 2017). AML/CFT objectives are,
for example, advanced when customers and beneciaries have easily veriable ofcial
The goal of achieving universal identication has therefore become a national objective
in many countries, including Nigeria. The World Bank estimates that this could add57%
of economic value to Nigerias GDP by 2030 as a result of increased tax revenue,
formalization, fraud reduction and nancial inclusion, with a third of this growth accruing
to individuals (Whiteet al., 2019).
1.1 Principles on Identication for Sustainable Development
National identication programmes have raised citizen concerns in the past. The failure of
an attempt to introduce an Australian identity card (Marshall, 1986;Bruce, 2010) and the
introduction and subsequent withdrawal of a UK national identication program (Beynon-
Davies, 2011) are cautionaryexamples reecting the need to address the concerns of citizens
in the design of a national identication programme. These concerns include data security,
for example the risk of misappropriation of national identity data (Uren, 2018). Data
integrity of some systems in the past was undermined by corruption. Processes must
therefore be designed with care to ensure that the identity data is and remains accurate. In

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