Global Financial Integrity
Boko Haram developed from social unrest, poverty, and a strong disillusionment with the corruption of the Nigerian government. Today, the same factors make Boko Haram lethal.
Nigeria’s rampant corruption has left the nation unequipped to deal with security concerns, especially along porous borders through which Boko Haram receives immense support. A look at one of their videos reveals an immense amount of weaponry that is not only costly but very difficult to obtain.
Boko Haram is capitalizing on the destitute areas in the north of Nigeria to extract money from civilians, as well as financial opacity to receive funding from international criminal networks–including a $3M donation to Nigerian Islamist networks from Osama Bin Laden–and channel it towards arms acquisition from abroad: one of many examples of the inextricable link between financial concerns and national security.
Like many insurgencies, Boko Haram is thriving in a country with poor infrastructure and opaque financial institutions. Its main areas of operation, Borno, Yobe, Kano, and nearby northeastern states, are ranked as the poorest areas in Nigeria. Funding opportunities for Boko Haram, such as kidnapping for ransom, smuggling, and bank robberies arise because of poor security infrastructure and have provided local means for funding and recruitment.
But that is only half the story. High-level corruption and financial opacity breeds larger-scale funding and support opportunities, contributing to illicit financial flows facilitated by banks and corrupt individuals. Though Al Qaeda in the Magreb (AQIM) has reportedly provided Boko Haram with substantial funds and arms, other sympathizers have also chipped in. Apprehended Boko Haram members have admitted to using otherwise legitimate business profits to support Boko Haram and selling items abroad at inflated prices, and arms smuggling from other conflict areas like Libya is rampant. Fictitious real estate companies and charities have also been implicated in money laundering operations to send illicit funds throughout West Africa.
Not only is the financial system broken, but many government officials would prefer to keep it that way. Minimal oversight means “security votes,” unmonitored discretionary funds for government officials, are increasingly abused, and bank executives are using profits to finance their own subsidiaries instead of providing local, long-terms loans. This not only takes away critical capital from infrastructure and security projects, it also shelters the nation’s elite from the repercussions of devastating economic, social, and political realities.
An overwhelming level of instability cripples Nigeria, draining capital from local, regional and national sources and making it more difficult to combat groups like Boko Haram. The 2013 GFI IFF report calculated that $142 billion dollars left the Nigerian economy between 2002 and 2011. No African country loses more:
Unless issues of bad governance and systemic corruption are addressed vigorously and transparently, all other measures [to deal with Boko Haram] will be nothing but stop-gaps.
Nigeria’s faulty financial system drains money from where it is needed and lets in funds to those it should not. It will take a leader with keen eye for high-level corruption and a progressive outlook on the nation’s future to bring the nexus of these issues to light and tackle Boko Haram’s root causes.
Global Financial Integrity