CASH DOMINANCE A CHALLENGE TO ANTI- MONEY LAUNDERING EFFORTS - GIABA'S SHEHU
By Babajide Komolafe
The dominance of cash in the economy of West African states is a major challenge to anti-money laundering efforts, says Abdullahi Shehu, Director-General, Inter-Governmental Action Group against Money Laundering in West Africa (GIABA).
The group was established in 1999 by the Authority of Heads of State and Government of the ECOWAS to protect West African economies and financial systems against money laundering and terrorism financing.
'You know the economy of some West African states are cash-based and because of that, it poses a great challenge to us', he said in an interview with Vanguard in Lagos.
He said for this reason, the recent limit imposed on cash transactions in Nigeria is commendable but should be complemented with other measures that would make alternative payment channels attractive and efficient.
He said: 'I will like to use this opportunity to commend the government of Nigeria for this and in particular the CBN of this initiative putting a threshold on cash withdrawal.
Now, I am not saying that the amount that has been suggested - N150,000- is justified or not. Apparently, given the need for cash in Nigeria, that amount will appear unrealistic but I can be honest to say that it is a laudable policy and we sincerely commend the Nigerian government.
It is actually when it has been tested that the CBN will come to reality whether that threshold is realistic or not but all the shouting by people that it is not realistic, we really need to move because we need people to use the new modern payment system.
'Again, this is the challenge, it means therefore that the authorities have to make the system efficient, the ATM machines, the credit cards and other non-cash payments must work efficiently and that cuts across other requirements in the society.
You need stability in power supply in most cases to be able to have the credit card to work, you need also to build confidence in the minds of the people that when they use their credit card, they will not be defrauded, you also need to strengthen the capacity of the financial institutions to provide these services.
He said other challenges of combating money laundering in the region include low capacity of member-states in terms of resources. 'You know that all our member-states are low capacity states and what we mean by low capacity states is that they have small resources that are competing for priority and therefore they face a challenge of the adequate personnel in place who will deal with these issues, having adequate remuneration for this personnel both in the investigative, prosecution and judicial arms.
We need people who are competent, who are trained, who are professionals, who will act with integrity in doing their job. Now, besides that you also need resources in terms of equipment for the law enforcement, for the prosecutors etc.
Even for the court, you need to build court systems that are efficient, provide modern court recording facilities for the judges and provide incentives for the judges to work with without difficulties including the provision of adequate power supply because it is an incentive for someone to work under very good condition.
Another challenge has to do with the perspective of the society and sometimes the media do not accurately report these issues.'