IMF’s renewed focus on tracing Illicit Financial Flows to plug Nigeria’s fiscal leakages – MD

By Emma Ujah & Babajide Komolafe

Washington DC- The renewed absorption of the International Monetary Fund (IMF) connected tracing Illicit Financial Flows (IFFs) could plug Nigeria’s fiscal leakages, the Managing Director (MD)of the planetary institution, Ms. Kristalina Georgieva, has said. 

She spoke portion engaging with Civil Society Organisations (CSOs) astatine the ongoing 2025 Annual Meetings of the IMF and World Bank successful Washington DC.

He words, “We judge that for countries similar Nigeria, the IMF’s renewed absorption connected tracing Illicit Financial Flows could supply a blueprint for plugging the fiscal leakages that person agelong undermined gross procreation and sustainable growth”.

The MD warned of the increasing menace of illicit fiscal flows (IFFs) improvement which she said has go a large origin undermining the economical and fiscal stableness of nations crossed the globe.

According to the Fund, illicit fiscal flows — which see stolen nationalist funds, proceeds from transgression activities, and untraceable integer transactions — proceed to erode governance systems, drain nationalist resources, and cripple developmental efforts, particularly successful processing economies.

In a caller argumentation briefing, IMF officials noted that IFFs present travel successful “multiple dimensions.” These scope from outright embezzlement of taxpayers’ wealth to backstage funds channeled into amerciable ventures that endanger nationalist welfare. The integer economy, they added, has further analyzable the situation with cryptocurrencies similar Bitcoin providing an avenue for anonymous fiscal transactions.

She said, “You whitethorn person wealth conscionable plainly stolen — wealth that belongs to the taxpayers. You whitethorn person backstage wealth directed for transgression activities undermining the payment of citizens,” the Fund noted. “Now with integer money, transgression activities tin beryllium funded without being traced. This is simply a superior problem, and we person to instrumentality it arsenic such.”

IMF’s Strategy to Combat Dirty Money

In response, the IMF disclosed that it has strengthened its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework, pursuing a broad reappraisal successful 2023.

The Fund outlined 4 cardinal pillars guiding its existent strategy:

Mandatory Financial Surveillance:

She said “Following the money” has present go a compulsory portion of the IMF’s yearly Article IV consultations — the modular economical wellness cheque for subordinate countries. This ensures that the Fund routinely assesses each nation’s vulnerability to illicit flows and fiscal integrity risks.

The MD added that the IMF is embedding lessons from past experiences into its fiscal assemblage valuation tools to amended hint illicit transactions and vulnerabilities.

In addition, she said for countries seeking IMF fiscal assistance, immoderate programme plan volition present see circumstantial measures to code the occupation of illicit flows, peculiarly wherever specified challenges are deemed systemic.

Ms. Georgieva besides said the Fund was supporting subordinate countries done method assistance and grooming to alteration section authorities to detect, trace, and respond efficaciously to suspicious fiscal activities.

“We request to bid state authorities truthful they tin hint illicit fiscal flows, beryllium much alert, and enactment quickly” she stated, adding “Digital tools assistance successful tracking money, but they besides make caller avenues for evading oversight.”

Governance and the Way Forward

The MD emphasized that curbing illicit fiscal flows goes beyond fiscal systems to the precise halfway of governance and organization integrity.

Through its Governance Diagnostics initiative, the Fund was helping countries place structural weaknesses that let corruption and fiscal crimes to thrive.

“The governance diagnostic is not an audit,” the MD clarified, and that “It is astir identifying vulnerabilities successful the organization setup — the breeding grounds for problems — and proposing reforms to code them.”

She encouraged greater collaboration among authorities agencies, civilian nine organizations, and planetary partners successful tackling the menace.

Her words, “We inquire our teams to prosecute with civilian nine and non-government institutions due to the fact that they often cognize wherever the vulnerabilitie...