Money Lauundering In Nigeria

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According to Ayodeji Aluko Mahmood Bagheri (2012), “Money laundering is indeed a global phenomenon which undermines the economic and political stabilities of States.” The development and economic of the country can be affected by money laundering. Although money laundering is becoming a global issues over the last decade, but it actually bring more critical impact to the developing country by negative impact on the financial stability, the economic development and lastly the political development of the most of the developing countries. The phenomena of money laundering not only occur in developing countries but also in the developed countries. There are several impacts of money laundering on economic and financial stability in developing countries,…show more content…
Laundered money eventually flows into the international financial system and in the course of this process; countries that integrate in to the global financial systems are exposed to the phenomenon of money laundering. There is case in Nigeria between 1980s and 1990s, an estimated amount of $100 billion was corruptly exported from Nigeria while more than $1 trillion illicit funds flowed into the US annually through the international financial systems and this includes the proceeds from drug trafficking and other forms of economic and financial crimes. The reputation of the financial system of Nigeria is the lowest during that period and this was the primarily down to the damaging status of the nation’s financial system attributed to the negative impact of economic and financial crimes. All the foreign investment were stalled. Therefore, the financial institutions in the country relied overwhelmingly on the ill-gotten capital drained off by corrupt political office holders. Hence, these financial institutions were unable to endure the tests of market competition and as a result, many of them disintegrated. (Bagheri,…show more content…
In year 2006, about 25 and 35% of all domestic businesses in South Africa did not pay income tax, and that a large number of individuals were not registered as taxpayers. These businesses and individuals would then need to launder the income that they received, and/or hoard this income to avoid being detected by. As a result, government revenue was reduced due to tax evasion, therefore impeding service delivery. (Bagheri, 2012) In my opinion, although Malaysia had money laundering issues but it haven’t reach the critical stage like in the African region. This is because the economic system of Malaysia is different with African. Besides, Malaysia had also implemented the Good and Services Tax (GST) and all the business and company in Malaysia must registered as the taxpayers. Therefore, the situation in South Africa is less possible happens in Malaysia. Furthermore, the corruption in Malaysia is getting worst. Therefore, the reputation of financial system of Malaysia is getting worst. In my opinion, I think the authorities should take action the avoid Malaysia towards to the situation of Nigeria during 1980s and 1990s. Besides, if Malaysia compare to the neighbor country Singapore which is less corruption than Malaysia, the reputation of financial system and the economy of Singapore is much better than

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