Dynamics of Terrorism Financing in Nigeria

Nigeria, over the years, has been embroiled in various violent conflicts. These threats include the jihadist insurgency prevalent in the Northeast, gunmen attacks, banditry, and kidnapping. While there are ongoing efforts to combat terror in the country, a salient issue remains the myriad sources of terrorism financing, which has continued to sustain terrorism and other violent conflicts in Nigeria. Terrorism financing is the backbone of terrorist groups as they are used for arms purchase, recruitment of fighters and running terrorist organisations.

Terrorism financing has been identified to come from both legitimate and illegitimate sources. Legitimate sources are businesses that provide funds for terror groups. Some identified illegitimate sources of terrorism financing include money laundering, ransom kidnap, illegal arms trade, illegal mining, drug trafficking, taxation, levies and protection fees. According to a report, about $819,500 was paid to Boko Haram and its affiliates in the Northwest between 2019 and 2021 as ransom payments, levies and taxes.

Also, the financial sector has been exploited for terrorism financing. The use of financial sectors indicates the increasing capabilities of some terrorist groups. Over time, some clandestine groups have used money changers, Point of Sale (POS) devices, wire transfers, and Designated Non-Financial Businesses and Professions (DNFBPs) for their activities.

Nigeria has made efforts over the years to address terrorism financing. Among these efforts is the Federal Government’s draft and implementation of the National Counter Terrorism Strategy (NACTEST) to combat terrorist operations throughout the country. The enactment of Counter-Terrorism Financing (CFT) legislation to enhance Nigeria’s legal system for prosecuting terrorists and targeting terrorist funders has led to the identification and investigation of many persons for terrorist financing.

Despite these efforts, some organisations still obtain money from other national and international sources. Nigeria’s porous borders make financing by courier possible. The porosity and continuous instability in the Sahel nations make moving cash between countries easier.

Furthermore, according to the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), politicians’ alleged corruption and involvement in terror financing is also identified as a stone in the shoes of law enforcement agents to hunt prospective terrorist donors. This explains why just a few cases of terrorist financing have been brought before Nigerian courts.

While the international community has made efforts to close terrorist financing tunnels, efforts to combat the threat in developing countries have been hampered by the twin problems of corruption and money laundering. The address by President Bola Tinubu at the United Nations General Assembly iterated the need for assistance in combating terror financing in the developing world as a support to ongoing efforts.

Stemming from the increasing complexity and sophistication of terrorism financing through formal sectors, the Central Bank of Nigeria needs to deepen its crackdown on anonymous or autonomous sources of funds which could be linked to financing terror.

The Nigerian government must take a proactive approach towards the fight against corruption by investigating and prosecuting officials who have ties to financing terrorism. This could be through establishing an independent body for such investigations and prosecutions.