The effects of illicit financial flows on oil and gas revenue generation in Nigeria

Pages177-186
Date01 December 2020
DOIhttps://doi.org/10.1108/JMLC-07-2020-0081
Published date01 December 2020
Subject MatterAccounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime
AuthorBello Umar,Zayyanu Mohammed
The ef‌fects of illicit f‌inancial f‌lows
on oil and gas revenue generation
in Nigeria
Bello Umar
Department of Business Administration, Nile University of Nigeria,
Abuja, Nigeria, and
Zayyanu Mohammed
Department of Business Administration, Faculty of Management Sciences,
Nile University of Nigeria, Abuja, Nigeria
Abstract
Purpose The purpose of this study is to determinethe extent illicit f‌lows affect the oil and gas revenue
generationin Nigeria specif‌ically the activities concerningoil theft.
Design/methodology/approach A qualitative approach usinga systematic quantitative assessment
technique was used to select peer-reviewedarticles and reports that discussed crude oil theft in Nigeria. This
was followedby the use of empirical evidence and content analysis.
Findings Crude oil theft in Nigeria accountsfor 10% of illicit f‌inancial f‌lows (IFFs)from Africa annually
and this amountsto US$6bn annually.
Research limitations/implications Oil theft is a new subject area of public policy and academic
research; data, secondary literature and peer-reviewed journal articlesare limited. This paper was from the
public sectorperspective only.
Originality/value This study is one of the few worksto highlight the connection between crude oil theft
and IFFs.
Keywords Nigeria, Revenue generation, Crude oil theft, Illicit f‌inancial f‌lows
Paper type Research paper
1. Introduction
Developing nations have lost more thanUS$1tn to illicit f‌inancial f‌lows (IFFs) according to
estimates (Ortega et al.,2017).IFFs are illegal or illicit f‌inancial transactions or capital f‌light
because of criminal and commercial activities earned and transferred to benef‌it from the
proceeds (Gathii, 2019). The money does not return to its source, and hence, depleting the
resources that are meant to be available for development (Miyandazi and Ronceray, 2018).
IFFs are usually from f‌inancial crimessuch as corruption, organised crime, tax evasion and
mis invoicing (Bohoslavsky, 2018). Therefore, IFFs are f‌inances earned and transferred for
utilisation, it includes proceeds of corruption, tax evasion, tax avoidance and money
laundering; theseactivities lead to loss of revenue for the countries of origin (Lemaitre,2019).
Africa loses US$60bn annually to illicit f‌lows and Nigeria accounts for 68% of this
amount (Eme et al.,2015). President Muhammadu Buhari decried Nigerias loss of $157.5bn
to IFFs at the recently concluded United Nations General Assembly in 2019 at New York
(The Nation, 2019). Global Financial Integrity reiterated in their latest report a consistent
reoccurrence of IFFs to and from 148 developing countries because of commercial activities
with developed countries(GFI, 2019).
Illicit f‌inancial
f‌lows
177
Journalof Money Laundering
Control
Vol.24 No. 1, 2021
pp. 177-186
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-07-2020-0081
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1368-5201.htm

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