Effects of Money Laundering on the Economy of Nigeria

Abstract

The effects of economic crime can be more damaging than what analysts often describe especially in a developing country like Nigeria. For a long time, money laundering has become another terror threatening the growth of the economy such that it drags the wheel of governance and economic development. Beyond this general assessment, money laundering is a factor being considered in the National Budget, fight against terrorism and foreign relations between Nigeria and other nations. This paper considers holistic effects of money laundering on the economy of Nigeria. It adopts the doctrinal approach of methodology in researching available primary and mostly secondary sources of data in the analysis of various effects such as manufacturing of domestic products, socioeconomic, financial effects, political effects, oil and gas sector. The paper further considers many challenges encountered by the past and present administration in combating money laundering. It however suggests that government should take proactive measures to tackle the menace by daring to prosecute close political associates involved as a lesson to other persons that no stone will be left unturned in the fight against the menace.

Using Artificial Intelligence to Combat Money Laundering

“…Money laundering is a critical problem that significantly affects the socio-economic structure of a society. In developing countries, especially in African countries, about 80% of households do not use formal banking, which creates a problem as informal economic activities are often unregulated [16]. Therefore, unregulated sources of income significantly affect indigenous entrepreneurs.…”

“…As a result, they engage in unscrupulous activities that force genuine companies that pay taxes to the government out of the system, Financial institutions' involvement in illicit money laundering activities deteriorates their reliability, making it difficult for foreign investors to invest. For instance, in the 1980s and 1990s, many Nigerian banks were involved in money laundering, which led to their disintegration and liquidation, and many people lost their savings [16]. Foreign investors could not venture into Nigerian businesses because of liabilities created by money launderers.…”

Global Eradication of Money Laundering and Immunity for Legal Practitioners under the Nigerian Money Laundering Regulation: Lessons from the United Kingdom

“…These would greatly have impact on the Nigerian government and her economy. The laundering of proceeds of crime through clients account and legal practitioners encourages the evasion of taxes by money launderers which in turn reduces resources meant for the government to engage in infrastructural development and national security (Oluwadayisi & Mimiko, 2016).…”