Africa leaders must tackle $88bn illicit financial flows without stifling NGOs, UN warns

 

The United Nations has urged governments across Africa to strengthen efforts to combat illicit financial flows estimated at $88 billion annually while avoiding anti-money laundering and counter-terrorism financing regulations that could unnecessarily restrict civil society organisations.

 

Ben Saul, United Nations Special Rapporteur on the Promotion and Protection of Human Rights while Countering Terrorism, gave the warning at the 3rd Africa High-Level Civil Society Conference on Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) in Abuja.

 

The conference, organised by Spaces for Change (S4C), the Special Control Unit Against Money Laundering (SCUML) of the EFCC, and Civic Advisory Hub (CAH), brought together delegates from more than 30 countries under the theme “Implementing FATF Recommendation 8 Correctly: Practices, Lessons Learned and Opportunities for Reform.”

 

Saul said the 2023 revision of the Financial Action Task Force (FATF) Recommendation 8 clarified that only non-profit organisations identified as vulnerable to terrorist financing risks should be subject to targeted measures.

 

“Most non-profit organisations do not pose any risk of terrorist financing at all,” he said.

According to him, countries should adopt risk-based and proportionate approaches rather than impose blanket regulations on the entire non-profit sector.

 

He warned that excessive registration, reporting and monitoring requirements could divert resources away from humanitarian, development and peacebuilding activities.

 

The UN official also expressed concern over the growing trend of banks denying services to non-profit organisations because of perceived compliance risks, making it more difficult for humanitarian groups to operate.

Saul further cautioned against the misuse of counter-terrorism regulations to suppress civic space, noting that effective implementation of FATF standards requires collaboration between governments and civil society organisations.

 

“Civil society engagement can reduce unnecessary regulation and strengthen the effectiveness of compliance measures,” he said.

 

 

Also speaking at the event, Harry Erin, Director, Special Control Unit Against Money Laundering, at the Economic and Financial Crimes Commission, said Nigeria had demonstrated that compliance with global anti-money laundering standards should strengthen institutions rather than stifle legitimate civil society activities.

 

According to him, FATF Recommendation 8 does not require governments to regulate every non-profit organisation indiscriminately but instead demands that countries identify only organisations genuinely vulnerable to terrorist financing abuse and apply proportionate, risk-based measures.

 

He said, “The Financial Action Task Force has made it abundantly clear that Recommendation 8 is not about regulating or restricting all non-profit organisations. Rather, it calls on countries to identify the subset of organisations that may be vulnerable to terrorist financing abuse and to apply focused, proportionate and risk-based measures. Equally important, countries are expected to protect legitimate charitable and humanitarian activities from unnecessary disruption.”

 

Erin stressed that civil society organisations remained indispensable partners in humanitarian intervention, healthcare, education, women empowerment, assistance to internally displaced persons and peacebuilding across Africa.

 

He disclosed that Nigeria’s inter-agency collaboration involving the EFCC, SCUML, the Nigerian Financial Intelligence Unit, the Office of the National Security Adviser, the Corporate Affairs Commission and civil society organisations enabled the country to conduct a comprehensive National Terrorist Financing Risk Assessment of the non-profit sector.

 

According to him, the assessment replaced broad assumptions with evidence-based analysis, allowing regulators to focus on genuinely vulnerable organisations while allowing the vast majority of legitimate charities to operate without unnecessary regulatory burdens.

 

“This experience has reinforced an important lesson. Effective implementation of FATF Recommendation 8 depends on trust. Trust between regulators and civil society. Trust between government and development partners. Trust built through transparency, consultation, information sharing and mutual respect,” he stated.

 

He added, “Nigeria’s reform journey demonstrates that compliance with international standards should never be viewed as an end in itself. Rather, compliance should translate into stronger institutions, greater transparency, enhanced public confidence and more effective protection of our citizens from the threats posed by terrorists and terrorist financiers.”

 

 

In her remarks, Victoria Ibezim-Ohaeri, executive director of Spaces for Change, said Nigeria’s reform journey demonstrates that trust, collaboration and evidence-based policymaking are essential to implementing FATF Recommendation 8 effectively while protecting legitimate civil society activities.

 

She added that lessons from Nigeria’s experience are increasingly being shared with other African countries seeking to strengthen compliance frameworks without undermining civic freedoms.

 

 

 

Ibezim-Ohaeri attributed Nigeria’s progress to sustained political commitment, improved collaboration between regulators and civil society, and reforms that replaced confrontation with dialogue.

 

“Today actually marks the 10th year of our AML-17 advocacy journey in Nigeria. Today, July 15.So looking back over these 10 years, we have seen progress. We have seen shifts, policy shifts. We’ve seen legislative shifts. We’ve seen also crisis shifts in the way NPOs are being governed, and their operations also endear.

 

“Ten years ago, discussions between government and civil society were often defensive. There was no meeting point. Today, we have stronger collaboration, greater trust and meaningful participation by civil society in shaping reforms. These are lessons worth sharing with other African countries,” she said.

 

Ibezim-Ohaeri added that Nigeria’s experience had already begun influencing reforms in several West African countries, describing the country’s journey as evidence that meaningful compliance could be achieved through cooperation rather than confrontation.

 

“What we are trying to say is that there are lessons that have been learned that are worth sharing and also some outcomes that we are seeing that are worth replicating in other countries and we want to use this platform to share those lessons and those outcomes with other countries. And finally, before I wrap up, I would like to also mention why we are here is one of the opportunities to have this conversation we are having on African soil,” she concluded.

 

Also speaking, Board Chairman of Spaces for Change, Samuel Diminas, said Africa continued to lose over $88bn annually through illicit financial flows despite improvements in anti-money laundering frameworks.

 

“These are not abstract numbers. They represent schools that remain unbuilt, hospitals left unequipped, and opportunities denied to millions of Africans. Our task is to strengthen the integrity of our financial systems while safeguarding the civic space that holds those systems accountable,” he said.