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The International Monetary Fund (IMF) has expressed deep concern over the scale of Illicit Financial Flows (IFFs) from Nigeria, warning that the trend is worsening the country’s revenue challenges.
IMF Managing Director, Ms. Kristalina Georgieva, raised the alarm during the ongoing 2025 IMF–World Bank Annual Meetings in Washington D.C., emphasizing that the Fund will intensify efforts to trace and curb illicit financial activities draining Nigeria’s public finances.
“We believe that for countries like Nigeria, the IMF’s renewed focus on tracing Illicit Financial Flows could provide a blueprint for plugging the fiscal leakages that have long undermined revenue generation and sustainable growth,” Georgieva stated.
She described IFFs including stolen public funds, proceeds from criminal enterprises, and untraceable digital transactions as a major global threat to financial and economic stability.
According to Georgieva, these illicit flows continue to erode governance systems, drain public resources, and cripple developmental efforts, particularly in developing economies.
Digital Economy Complicating the Challenge
IMF officials noted that IFFs now manifest in “multiple dimensions,” from outright embezzlement of public funds to private monies diverted into illegal ventures. The rise of cryptocurrencies and other digital financial platforms has made tracing such transactions increasingly difficult.
“Now with digital money, criminal activities can be funded without being traced. This is a serious problem, and we have to take it as such,” Georgieva added.
Stronger Global Anti-Money Laundering Framework
To combat the growing menace, the IMF disclosed that it had strengthened its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework following a comprehensive review in 2023.
The Fund has now made “following the money” a compulsory part of its annual Article IV consultations, which serve as economic health checks for member countries. This ensures that every nation’s exposure to illicit flows and financial integrity risks is routinely assessed.
Georgieva further revealed that IMF-supported programs will now include specific measures to address illicit flows, particularly in countries where such challenges are systemic.
“We need to train country authorities so they can trace illicit financial flows, be more alert, and act quickly. Digital tools help in tracking money, but they also create new avenues for evading oversight,” she said.
Governance and Institutional Integrity
The IMF chief stressed that addressing IFFs goes beyond the financial sector, touching on the very core of governance and institutional integrity. Through its Governance Diagnostics Initiative, the Fund is helping countries identify structural weaknesses that enable corruption and financial crimes.
“The governance diagnostic is not an audit. It identifies vulnerabilities in institutional setups the breeding grounds for problems and proposes reforms to address them,” Georgieva explained.
She urged greater collaboration among government agencies, civil society organizations, and international partners, commending countries like Sri Lanka and Kenya for embracing joint frameworks to tackle financial crimes and strengthen governance.
