Reps worry over UN’s report on $40.7bn annual capital flight

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4 years ago

The House of Representatives, on Tuesday, urged the Federal Government to develop an effective mechanism and strategy to prevent the persistent occurrence and address the menace of capital flight to the tune of $40.7 billion.

The resolution was passed sequel to the adoption of a motion sponsored by Hon Afolabi Olalekan, who expressed displeasure over the United Nations Conference on Trade and Development report that about $88.6 billion per year leave African continent through money laundering, tax evasion, diverted revenues, offshore investments and other forms of capital flights, with Nigeria accounting for an estimated 46 per cent of the total capital flight or $40.7 billion per year.

In his lead debate, Hon Olalekan observed that capital flight has been one of the unresolved and persistent macroeconomic problems plaguing the nation for over four decades.

“Ironically, Nigeria is ranked among the highest producers of crude oil in the world and earns a huge amount of foreign exchange from its exports but still falls short of capital to develop, maintain and upgrade her infrastructure due to the magnitude of capital flight from Nigeria when compared to accumulated domestic investments.

“The House further notes that the United Nations Conference on Trade and Development estimated that about $88.6 billion per year leave the continent through money laundry, tax evasion, diverted revenues, offshore investments and other forms of capital flights, with Nigeria accounting for an estimated 46 per cent of the total capital flight or $40.7 billion per year.

“The House is aware of the Central Bank of Nigeria (CBN) Bulletin in 2015 which shows that the net flow of capital flight from Nigeria from 1986 to 2015 was quite worrisome, with Nigeria losing a colossal sum of over $8.8 trillion.

“The House is worried at the alarming rate of foreign medical services being sought by Nigerians, both private individuals and government officials, which amounts to more than $6.5 billion based on the statistics released by the Ministry of Foreign Affairs in 2015, while expenses on foreign education amount to more than $3 billion based on estimates released by the Tertiary Education Trust Fund (TETFUND) in its 2014 annual report.

“The House is cognizant of the recent series of pleas by successive governments to foreign banks and other international financial institutions to release and repatriate stolen and diverted funds in millions of dollars stockpiled abroad by corrupt leaders.

“The House is concerned that capital flight exerts detrimental effects on both short and long term growth of the economy by reducing domestically available investible capital as it represents a foregone investment in manufacturing plants, infrastructure, social welfare, reduction of a country’s tax base and a contribution to the high debt profile, among others,” he stated.

To this end, the House urged Federal Government to partner with private institutions to go into public-private partnership contractual agreements to build world-class medical facilities in major cities in Nigeria or upgrade and equip the existing ones with adequate facilities based on build, operate and transfer by private investors in a way that will allow the investors to manage same for an agreed period.

The House mandated its Committee on Legislative Compliance to ensure implementation.