Nigerian Financial Regulator Propose Use of Blockchain and AI in Combating Illicit Financial Flows

As most African countries explore advanced solutions to recover stolen treasuries and funds, the Nigerian authority seeks to take the opposite route. 

The chairman of the Nigerian Economic and Financial Crime Commission (EFCC), Olanipekun Olukoyede, has urged the government to leverage the power of blockchain and artificial intelligence (AI) to recover over $88.6 billion stolen from African countries year after year.  

Pan-African Leaders Explore Ways to Address IFF

The official lamented that the stolen resource has exposed African countries to poverty and economic challenges. Speaking at the Pan African Conference of Illicit Financial Flows and Taxation, Mr Olukoyede suggested various approaches to address the region’s challenges. 

The conference aims at addressing the illicit financial flows (IFF) that stifle economic development in the region. Occasionally, tax cheats, corruption, terrorist financing, and trade barriers contribute to IFF. 

The IFF challenges have deprived African countries of investing in critical infrastructure for social amenities.  Mr Olukoyede recognized the exemplary work done by the Nigerian regulators in recovering over $311 million from the former head of state, Sani Abacha.

The executive noted that confiscating Abacha assets demonstrates that Africans were willing to collaborate to address the IFF menace.  The official lamented that IFF has been a critical concern in Africa for years. 

Olukoyede regretted that IFF dwarfed the African economic growth and stability. He restated that millions of funds have been stolen from Africans yearly.  

Most stolen funds are invested in foreign countries, demanding that African countries to liaise with international bodies such as the Stolen Asset Recovery Initiative (StAR) to recover the stolen funds.

He recognized the exemplary work done by the World Bank in collaboration with the United Nations Office on Drugs and Crime (UNODC) in mitigating IFF. 

Nigeria EFCC Chair Calls for Use of AI and Blockchain to Address IFF

In November 2023 Nigerian President Bola Tinubu applauded the France government for returning $150 million stolen by Abacha. From the millions lost in IFF, Olukoyede advised the Africans to develop effective measures to address the illegal transfer of funds.

In his speech, the EFCC chair encouraged the African countries to strengthen their relationship and address IFF. He explained that successful collaboration between the African countries would lead to the recovery of stolen funds.

The official projects that the recovery of stolen funds would finance ongoing projects such as the Second Niger Bridge and the construction of the Lagos Ibadan expressway. Apart from collaboration, Olukoyede advised the African leaders to develop stringent rules to bridge the gaps between regional and international governance. 

To enforce the rule of law, Olukoyede advised legislators to embrace advanced technologies such as blockchain, AI, and data analytics to trace the movement of stolen funds. 

Olukoyede believes that advanced technologies will allow lawmakers to identify illicit fund transfers quickly. Beyond this, Olukoyede encouraged African leaders to form advocacy groups in partnership with international bodies to fight corruption. 

Nigeria Seeks to Embrace Crypto-Friendly Policies

Citing a recent proposal at a meeting in Addis Ababa, Olukoyede was for the idea of forming a Pan-African assets recovery practitioner forum. The proposed forum aimed at converging African leaders to deliberate factors undermining asset recovery. 

Olukoyede noted that technical, legal, and political issues have undermined Africans’ efforts to trace and freeze stolen funds. He encourages the legal and institutions to collaborate to address IFFs.

At the Pan African Conference on Illicit Financial Flows (PAC), Olukoyede called for active participation in addressing IFFs. The official encourages the African leaders to share knowledge and expertise on addressing IFFs. 

Olukoyede’s statement came when Nigeria grew interested in investing in blockchain and AI technology. In late May, the Nigerian National Information Technology Development Agency (NITDA) revealed plans to reorganize the Nigerian Policy Steering Committee. 

The proposed restructuring is aimed at enabling the committee to support the implementation of the Nigerian National Blockchain Policy. The NITDA  proposed restructuring to allow Nigeria to to cope with market trends in blockchain technology. 

Also, the agency seeks to push for mainstream adoption of blockchain and crypto technologies.