How excessive cash use drives money laundering, by GIABA

The Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA), says one of the major contributors to money laundering and other financial crimes in Nigeria and other West Africa countries is the excessive use of cash in payment and settlement of obligations.

GIABA is a specialised agency of the Economic Community of West African States (ECOWAS).

Speaking during the Joint GIABA–ECOWAS Gender Development Centre (EGDC) Regional Forum on Women and Transnational Organised Crimes, held in Lagos, the Acting Director of Policy and Research at GIABA, Dr. Jeffery Isima, said the practice of transacting with cash makes financial crimes difficult to combat.

On what GIABA is doing to tackle the scourge, he said: “What we are doing to deal with it is to first of all, help the Nigerian government, to enhance financial inclusion and cashless financing. We are helping to ensure that people will be able to do huge or massive transactions through electronic payments”.

Isima, who represented the GIABA Director-General, Edwin Harris, said many people involved in financial crimes wouldn’t want to be paid through the banks because it’s traceable.

 “That practice is difficult to measure the amount of money involved in this transaction,” he said.

He said human trafficking in West Africa is pervasive, evolving, and devastating. It is a crime that undermines development, erodes human rights, fuels illicit economies, and threatens regional stability.

For instance, according to the United Nations Office on Drugs and Crime (UNODC), in West Africa, children make up more than 75 per cent of trafficking victims in the sub-region.

 “A detailed study of West Africa describes the region where for trafficking of persons, child labour, and modern slavery is “most prevalent” on the continent,” he said.

Also speaking, Director/CEO, Nigerian Financial Intelligence Unit (NFIU), Ms. Hafsat Abubakar Bakari, said human trafficking remains one of the most lucrative forms of transnational organised crime globally.

 “According to ILO and UNODC estimates, forced labour and trafficking generate over 150 billion US dollars annually, placing it among the top revenue-generating criminal activities worldwide. Women and girls account for over 60 per cent of identified victims globally, with sexual exploitation and domestic servitude particularly prevalent in our region,” she said.

She explained that behind every trafficking victim lies a financial trail, payments for recruitment, transportation, forged documentation, accommodation and exploitation. These proceeds are laundered through bank accounts, mobile money platforms, informal value transfer systems, shell businesses and increasingly, digital and crypto-enabled channels.

 “For this reason, trafficking cannot be effectively tackled without integrating anti–money laundering and counter-financing tools into national and regional responses,” she said.

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Bakari said West Africa faces unique and intersecting vulnerabilities. Poverty, unemployment, displacement due to conflict and climate pressures, porous borders and entrenched gender inequalities continue to create fertile ground for traffickers.

 “Criminal networks exploit these conditions with sophistication, often recruiting victims through trusted community links, social media platforms and false promises of education or employment.

 “GIABA and Financial Action Task Force (FATF) typology reports have consistently shown that trafficking networks in the region rely heavily on low-value, high-volume transactions, the use of third-party accounts, frequently held by women and young people and weak customer due diligence in certain sectors. These patterns underline the importance of risk-based supervision and intelligence-led interventions,” she said.