N
igeria faces a complex threat landscape from various terrorist groups, as highlighted in the 2022 National Inherent Risk Assessment on Terrorist Financing. These groups utilize diverse funding methods, complicating counter-terrorism efforts. For example, Boko Haram funds its activities through foreign donations, extortion, ransom, and trade in goods such as dried fish, while the Islamic State West Africa Province (ISWAP) exploits a cash economy through kidnapping and illegal levies. Disrupting the financial flows supporting terrorist groups in Nigeria is an essential element of reducing violence and promoting security. Identifying these financial flows requires specialists using data to identify and predict illicit transactions. Financial intelligence constitutes an essential component of this counterterrorism toolkit.
In Nigeria, the organization leading this work is the Nigerian Financial Intelligence Unit (NFIU). Its processes are disrupting these illicit financial channels by monitoring cash economies, illicit trade, and digital transactions. Recently, our work identified a Point of Sale (POS) agent and nine others linked to a terrorist leader, highlighting the evolving methods used to move illicit funds. A spontaneous disclosure from a foreign financial intelligence unit triggered the investigation, revealing that the POS agent had received significant transactions from the other subjects, most of whom were also POS agents. Others owned businesses such as mobile phone shops, pharmacies, and provision stores. One of the individuals was even a public servant with a law enforcement agency, underscoring the complexity of terrorist financing networks. Analysis showed that some transactions included narrations suggesting payments were made on behalf of a known associate of the terrorist leader. Further scrutiny uncovered that one of the subjects had financial ties to an individual already flagged in a separate terrorism financing case. This interconnection reinforced concerns about an extensive and coordinated financial network supporting terrorism. In response, the NFIU promptly disseminated intelligence to law enforcement agencies, enabling investigations into terrorism and terrorist financing.
In 2022, Nigeria released the National Strategy for Countering Terrorism Financing, which outlines Nigeria's tech-driven and collaborative approach to restrict terrorists' funding access. In the report, key actions include intelligence sharing, financial oversight, private sector collaboration, and international cooperation. These strategies enhance Nigeria’s adaptability to counterterrorism challenges and provide valuable global insights, which the NFIU is operationalizing.
Leveraging Financial Intelligence in an Informal Economy
The National Financial Inclusion Strategy, updated by the Central Bank of Nigeria in 2016, found that 41.6% of adults were excluded from Nigeria’s financial services. A 2018 survey by Enhancing Financial Innovation and Access indicated that 36.6 million adults, or 36.8% of the adult population, remained unbanked. Consequently, many rely on informal systems like hawala—an informal, traditional money transfer system rooted in the trust of a vast network of money brokers—and trade-based money laundering, which escape traditional oversight. The extensive use of cash and diverse commercial activities across Nigeria heighten risks related to money laundering and terrorist financing, particularly in conflict zones like the northeast, where groups such as Boko Haram and ISWAP are especially active.
Nigeria is also a source of illicit financial flows linked to corruption and drug trafficking. To address these challenges, the NFIU collaborates with domestic law enforcement and regulatory bodies, utilizing data analysis tools like GoAML—an anti-money-laundering system for financial intelligence units—for processing suspicious transaction reports. The NFIU also uses its internally developed computer system called the Crime Records Information Management System (CRIMS) to collect operational data on suspects from various agencies, enhancing their ability to combat these risks. Non-traditional threats in Nigeria, such as those described above, often involve financial methods that bypass conventional banking systems. The 2023 Nigerian Terrorist Financing Typology Report highlights how informal indigenous money saving systems like Esusu, Adashe, and Ajo could support extremist groups. Additionally, barter transactions in the agricultural sector complicate tracking, as terrorists frequently use commodities such as livestock and grains, leaving no digital trace.
Financial intelligence is essential for uncovering these networks by identifying anomalies in data, such as unusual cash withdrawals or transfers. For example, the NFIU flagged a transaction from a company to a European arms corporation, prompting a terrorist funding investigation. The NFIU also launched the CRIMS in 2020 to aid 36 law enforcement agencies in analyzing terrorism financing related to Boko Haram, which is also in line with the United Nations Security Council Resolution 2349.
In 2024, the NFIU began working with the emerging technology and innovation sector, which focuses on utilizing technologies like blockchain, AI, and big data to combat financial crimes. A significant case involved two individuals, who used their cattle business for illegal arms trading linked to terrorist financing. Their monitored communications and transactions through CRIMS led to their arrest and disruption of their financing network, followed by sanctions from the UN National Security Council for supporting Boko Haram activities.
Enhancing International Cooperation in Disrupting Terrorist Financing
Disrupting terrorist financing in Nigeria relies on strong internal coordination and international partnerships. A significant case involved a disclosure from a foreign financial intelligence unit regarding a crypto currency transaction connected to Islamic State in Iraq and Syria (ISIS) in which two Nigerians received $19,900 and $9,900, respectively. The NFIU linked the two individuals together and identified their connections to other terrorism financing suspects operating in Northeastern Nigeria. This underscores the value of international intelligence in domestic investigations.
Additionally, Nigeria works with West African partners through the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) to monitor cross-border transactions, contributing to the 2016 Terrorist Financing in West and Central Africa report. Membership in organizations like the Financial Action Task Force and the Egmont Group enhances Nigeria’s access to vital intelligence on terrorism financing trends.
Following UN Security Council Resolution 2349 in March 2017, a regional task force was formed with financial intelligence units from several West African nations to address financing linked to Boko Haram and ISIS. This task force aims to strengthen financial surveillance and disrupt illicit financing networks. The Egmont Group's Regional Group promotes cooperation among financial intelligence units to tackle money laundering and terrorist financing. For instance, a joint operational project focuses on cross-border terrorist financing risks in the Middle East and North Africa, which helps to enhance understanding of vulnerabilities and how multinational terrorist organizations share resources across regions. This type of collaboration allows Nigeria to refine its anti-money laundering and counterterrorism financing measures to align with international standards.
Conclusion
With regional and international support, Nigeria is bolstering efforts to combat terrorism financing. Initiatives like the joint regional task force in the Lake Chad Basin and participation in global platforms such as the Egmont Group underscore the importance of collective action. However, further progress requires targeted actions. First, enhancing regulatory oversight of informal financial systems such as Esusu, Adashe, and Ajo through better monitoring and reporting mechanisms can help identify illicit transactions. Second, leveraging technology and cross-sector collaboration can improve intelligence gathering on non-traditional threats, including barter-based transactions in the agricultural sector. Finally, strengthening international cooperation through deeper intelligence-sharing agreements and capacity-building programs will reinforce Nigeria’s ability to detect and disrupt illicit financial flows that sustain terrorism.
This article was collectively written by employees of the Nigerian Financial Intelligence Unit.
