Two West African countries register sound progress in fighting money laundering

Ghana and Nigeria are making tremendous progress and achievement in the fight against the twin crimes of money laundering and terrorism financing (ML/TF), a news release from the Inter-Governmental Action Group against Money Laundering in WestAfrica (GIABA) has said.

According to the release from the GIABA Information Centre in Nigeria on Friday, Ghana has made significant progress in improving its Anti-Money Laundering and Counter Financing Terrorism (AML/CFT) regime hence the Financial Action TaskForce (FAFT) has excluded the country from its list of countries with deficiencies in AML/CFT regime.

Initially, FAFT - global standard setting body for anti-money laundering and combating the financing of terrorism - blacklisted Ghana due to the country’s lack of progress in improving its AML/CFT regime and also called on member countries to consider the risks and be cautious in doing any transaction with Ghana.

Following this, the release said Ghana developed an Action Plan to address the strategic deficiencies identified in its AML/CFT regime, with the support of FATF and GIABA, an arm of ECOWAS mandated to clean the sub-region of the twin crimes of Money Laundering and Terrorism Financing (ML/FT).

In October 2010, Ghana made a political commitment to implement the Action Plan within one year.

W/African civil society capacitised to battle money laundering, financing terrorism

The Intergovernmental Action Group against Money Laundering in West Africa (GIABA) will be organizing a regional sensitization workshop for Civil Society Organizations (CSOs) on AML/CFT in the Senegalese capital of Dakar on 6 and 7 August 2012. 

A statement from the sub-regional agency says the objectives of the workshop are to sensitize civil society organizations on AML/CFT issues and related implications in the West African sub-region; to get members of the civil society actively committed to their role as champions against these twin scourges by spreading the message at grassroots level; to establish links and a solid network of CSOs engaged in the fight as a means of sharing experiences and knowledge within the sub-region; and finally, to build the capacity of CSOs and empower them to take ownership of the fight against ML/FT.

“The fight against money laundering and the financing of terrorism is a collective responsibility of all stakeholders geared towards the protection of the economies and financial systems of member States,” the statement says. “GIABA acknowledges the contribution of the civil society in mass mobilization and in the decision-making process.”

West Africa real estate sector soiled by money laundering

Real estate activities are increasingly being used for money laundering purposes in West Africa, said the latest report of the Intergovernmental Action Group Against Money Laundering (GIABA).

Director General of GIABA, Dr Abdullahi Shehu

In the sub-region, financial crimes are generating wealth generally derived from the scourge of corruption, smuggling, confidence trick and the use of forgeries and drug trafficking, among others.

“In the West Africa region both the real estate and banking sectors are also used for the purpose of money laundering, which also affects cross-border transfer of funds,” GIABA points out in its 2011 report.

According to the report, other practices serving the purposes of illegal enrichment include, “the illegal use of companies and Designated Non-Financial Businesses and Professions (DNFBPs)”, the excessive utilization of the insurance and micro-finance sectors, stock-exchanges and securities, casinos and other sectors of betting and games of chance.

“Factors facilitating the proceedings of money laundering prove to be the vulnerability of states rather than the extent of threats. This accounts for the lack of capacities to decisively tackle the scourge of money laundering, preventive measures, political commitment and sanctions,” says GIABA.

GIABA further indicates that despite considerable efforts to curb money laundering in the region on the national, regional and international level, there remain major legal and constitutional challenges, aggravated by the lack of autonomy of some institutions, and the absence of effective national strategies to fight against money laundering.

‘Corruption remains a challenge in W/Africa’

Officials of economic and financial departments in the member states of the West African Institute for Financial and Economic Management have made strong recommendations to stamp out corruption and fiscal indiscipline in government circles.

The senior public officials from Nigeria, Ghana, Liberia, Sierra Leone and The Gambia say there is the need to enforce and strengthen legislations by various governments with the aim of tackling fiscal indiscipline and perennial corruption in the sub-region.

“Corruption remains a challenge in the effective utilization and management of public funds within the West African sub-region,” they say, adding that the adoption of best practices of good governance, transparency and accountability are precondition for the achievement of rapid economic growth, sustainable development and poverty reduction.

Investigative institutions and judicial arm of governments must be truly independent and capable of prosecuting culprits, they state in a communiqué they established after their two-week regional course on public financial management held at the Paradise Suites Hotel in Kololi from 19 to 30 March this year.

W/Africa Needs Good-Governance to Fight Against Poverty

Economic development and the fight against poverty can only effectively be enhanced under an environment of good governance and transparent management of public finances, Gambia’s Central Bank Governor has told West African financial and economic professionals.

“The centre piece of good governance in public resource management is transparency and accountability,” Governor Amadou Colley said on Monday at the commencement of a two-week regional course on public financial management: budgeting, planning and performance organised by the West African Institute for Financial and Economic Management (WAIFEM).

Cross section of participants

He told the course participants, drawn from Nigeria, Ghana, Liberia, Sierra Leone, and The Gambia, that the central element of transparency in the management of public resources is the question of the rules of engagement relating to the bid process for public contracts.

“These should be clearly defined and publicised for the information of all interested parties,” he said.

However, Hon. Colley noted with pride that a good number of countries in the sub-region have embarked on this path by enacting a Public Procurement Act to provide a clear framework.

W/African Central Banks look at new currency control mechanism

Central Bank officials from the sub-region are charting out a new direction of maintaining qualitative banknotes and currency management that will ensure the durability and protection of national currencies from counterfeiters and other deficiencies. Held at the Paradise Suites Hotel in Kololi, the five-day workshop that commenced yesterday, brought together senior central bank officials from The Gambia, Nigeria, Ghana, Sierra Leone and other countries to study and dilate on the New Challenges in Currency Management, New Directions in Banknote Design, Security Features Against Counterfeiting, Forecasting the Demand for Banknotes, and Country Case Studies on Currency Management. Organised by  the West African Institute for Financial and Economic Management (WAIFEM), in collaboration with Dela Rue, under the theme: "Banknote and Currency Management and Forecasting in Central Banks", the workshop would not have been more appropriate given the fact that member countries' economies remain predominantly cash-based, reflecting the preference of economic agents, the weakness of the legal system to enforce contracts, and the level of development of payments in member countries. "Thus, this maiden workshop could not have come at a more auspicious time, given the problems of currency management in our countries and the urgent need to chart a new direction consistent with best practices, in order to engender greater efficiency and minimize the cost of printing and minting currency," WAIFEM Director-General Prof Akpan H. Ekpo, said in his opening remarks on the occasion. No central bank function is more visible than currency management, Prof Ekpo says, adding that a currency's integrity and efficient supply are unequivocal everyday indicators of a well-functioning central bank. "In the eyes of the people, this integral central bank function should be efficient, meet demand and also present minimal issues which may damage the reputation of the country. Of particular concern is the issue of counterfeiting, which is as old as money itself, and continues to present a potential danger to national economies and financial losses to consumers. "Worse of all, recent developments in photographic and computer technology, as well as printing devices, have made the production of counterfeit money relatively easy, thereby increasing the potential threat." Currency management is a critical aspect of central bank's functions, says Hon. Amadou Colley, Governor of the Central Bank of The Gambia, while delivering the keynote address on the occasion. "The integrity of the currency and efficient supply of banknotes are indicators of a well-functioning central bank, especially in preponderantly cash based economies such as ours," he said, "adding that issuing and destroying cash, maintaining note quality and guarding against counterfeit notes is a complex business and is increasingly costly." Some organizations have responded to this growing trend by outsourcing currency sorting, he also notes. The International Organization for Standardization (IOS) certification, he explains, ensures that minimum international quality standards are adhered to in the systems and procedures followed in an organization. "Here, quality implies doing right things the right way, first time and every time," he said. Touching on key elements in Banknote Design, Hon. Colley said: "For currency managers, note designs present a series of interlocking challenges. New designs must win public acceptance, incorporate requisite security features and meet durability and machine processing standards. Fitness standards for currency in circulation must be set and monitored whether currency sorting is carried out in-house or outsourced. "The proliferation of Automated Teller Machines (ATMs) has had a considerable impact and sharpened the focus for both commercial and central banks. The growing network of ATMs has also affected the composition shift from lower denomination notes to higher denomination notes. "The banks do not find it commercially viable to stock the machines with lower denomination notes because they run out sooner and increase both the capital cost and operating costs." The CBG Governor also dilated on the demand for banknotes, saying efficient and effective currency management commences with a strategic analysis of the currency life-cycle. However, he observed, strategic management of currency "is impossible" without accurate forecasts of the demand for banknotes. "The long lead time involved in banknote production makes it vital from cost and reputational point of view that central banks forecast the demand for banknotes as accurately as possible," he said, adding: "Indeed, the benefits of accurate forecasting are obvious. It encourages more efficient procurement and reduces stockholding costs. In other words, a disciplined, balanced approach to currency management reduces opportunity losses and thus enhances the smooth functioning of the banking system." Other speakers on the occasion included Mr Morf Ulrich of Orell Fussli Security Printing Limited and Mr Ehi E. Ekoyomon, MD/CE, Nigerian Security, Printing & Mining Plc. Source: The Point