On December 19, 2022, a federal high court convicted the director general of the Labour Party’s Presidential Campaign Council, Doyin Okupe, for breaching Nigeria’s Money Laundering Act.
Okupe was found guilty of 26 out of a 59-count charge brought against him by the Economic and Financial Crimes Commission (EFCC). The sentence was either a two-year prison term, or an option of a fine totalling ₦13 million. Naturally, Okupe chose to pay the fine and won’t be seeing a day in jail. However, he’s resigned from his position in the LP campaign.
His resignation brought praise from different quarters, even from critics. As you well know, a Nigerian politician resigning from office is as common as a flying pig.
Okupe’s brush with the law is a good opportunity to explore why money laundering is such a big issue in Nigeria.
What’s money laundering?
Think about how you take your clothes to the dry cleaner for laundry. Why do you do it? Because your clothes are dirty and you want them clean. That’s the same thing with money laundering.
Money laundering is the illegal process of making large amounts of money generated through criminal activity — like drug trafficking — appear to have come from a legitimate source.
Why’s money laundering frowned upon?
If the reason above isn’t enough, let’s provide more. If business earnings were legitimate, hiding the source of one’s wealth wouldn’t be necessary. The nature of people involved in this act means any association with money laundering brings great reputational stain. Think Pablo Escobar here.
These shady characters explore many creative ways to use businesses and even respectable institutions like churches to launder money.
Money laundering can also have negative effects on an economy because criminals bypass financial institutions and this can impact both growth rates and money demand.
And if that’s not enough, think of the second order effects. The proceeds of laundered money fund even more criminal activities. Drug dealers use it to buy more weapons, politicians use it for vote-buying and the vicious cycle of crime keeps spinning.
How’s Nigeria fighting money laundering?
President Olusegun Obasanjo inaugurated the Independent Corrupt Practices Commission (ICPC) in 2000 to deal with corruption in the public sector. There’s also the EFCC, established in 2003, whose responsibilities include combating money laundering. In 2011, President Goodluck Jonathan signed a new Money Laundering Act which made KYC requirements mandatory. This means banks must identify and verify the identity of customers, especially politically exposed individuals.
Also, transactions exceeding ₦5 million for individuals and ₦10 million for corporate bodies are to be made through a banking system. The bank must report anything higher to the Nigerian Financial Intelligence Unit (NFIU).
The NFIU is an autonomous unit, domiciled within the Central Bank of Nigeria (CBN) and the central coordinating body for the country’s Anti-Money Laundering, Counter-Terrorist Financing and Counter-Proliferation Financing (AML/CFT/CPF) framework. It’s responsible for the receipt and analysis of disclosures from reporting organisations.
What’s the punishment for money laundering?
If Okupe’s conviction is anything to go by, the EFCC is more than happy to go after you if you launder money.
Section 18(3) of the Money Laundering Act says: “Any person guilty of the offence of money laundering shall be liable upon conviction to imprisonment for a term of not less than four years but not more than fourteen years or a fine not less than five times the value of the proceeds of the crime or both.”
While debate rages on about whether the punishment is fitting enough, it should, hopefully, act as a deterrence to anyone who doesn’t want to follow the straight and narrow path.
