PACAC Explains Why FG Turned Spotlight on Multinationals
The Presidential Advisory Committee against Corruption (PACAC) has explained why it is shifting the war against corruption in the country from politically exposed persons to multinationals.
According to the Executive Secretary of PACAC, Prof. Bolaji Owasanoye, Africa and indeed Nigeria losses more from Illicit Financial Flows (IFF) perpetrated by multinational corporations than from direct looting by politically exposed persons.
Owasanoye, while citing a report by the Tabo Mbeki Panel which noted that 70 percent of West Africa’s losses to IFF come from Nigeria, said no government would fold its hands and continue to watch foreign entities devour its economy. Though he could not put a figure to the actual amount Nigeria losses to IFF, however, a report last week claimed Nigeria losses over $50bn annually to this act.
Speaking on the level of preparedness for the 2nd Abuja IFF/AR International Conference on Combating Illicit Financial Flows and Enhancing Asset Recovery for Sustainable Development, which comes up this Tuesday and Wednesday in Abuja, Owasanoye said, “Whereas 30percent loss of Africa’s wealth is through direct looting by politicians, 70 percent are from Illicit Financial Flows, particularly by multinational corporations in the country and we have been dwelling on the 30 percent, but now we are shifting attention to this area to say we know what is going on”.
Last week, the Central Bank of Nigeria (CBN) funed four banks N5.8bn for allegedly assisting Telecom giant MTN to illegally repatriate $8.13bn to South Africa.
Speaking on the development, the PACAC Secretary alleged that aside MTN, a lot of multinational corporations are daily involved in the subtle and unscrupulous movement of monies earned in Nigeria, thereby leaving the nation grappling with the challenge of development.
“Now by the money leaving it meant that that money is not available for other uses. Manufacturers and other people who require foreign exchange suffer because somebody has taken the money on the pretence that it was borrowed and has to be repaid with interest.
“The other way Nigeria lost is that MTN was not properly taxed. It meant for those periods that they took money out on their books they would have under declared their profit because they have said that this was debt and not equity and since corporate tax is 30 percent, they would have consistently paid far less to us and so shortchanged us in the process”.
He added that other means through which these multinationals continue to defraud Nigeria include falsification of trade records, over and under invoicing, secret companies, tax evasion, profit shifting, exploitation of weak regulatory mechanism, overpricing intellectual property among others.
“So you wonder why some big companies keep saying, the Nigerian business environment is very harsh yet they remain, they keep saying business is not good but they are here because they have taking out their money in advance through spurious means and any government that is not sensitive to look at it very well would continue to struggle.
“It is an irony that foreign countries want to discuss our politically exposed persons who have looted money but when you start talking about IFF they become shy because it is their own companies, multinationals corporations that are involved”, he said.
Owasanoye stressed that as think-tank for government, PACAC through the conference has decided to create a platform to call attention to the anomaly, “educate Nigerians on what are Illicit Financial Flows and how they operate, look at how we can combat cross border flow of illicit assets, look at how to hold facilitators accountable, how to enhance asset recovery, how to manage recovered assets and how to do international cooperation.”
“Developed countries are not interested in this conversation because that is how they make money”, added.