By Dr. Wahab Shittu, SAN
“Terrorist financing is not merely a financial crime it is the lifeblood of extremism. Severing that lifeline demands more than freezing accounts; it demands intelligence, coordination, law, and relentless vigilance.”
INTRODUCTION
Nigeria stands at a critical juncture in its fight against terrorism. From the Boko Haram insurgency in the Northeast to the activities of bandits, separatist financiers, and transnational criminal networks, the common thread binding these threats is money. Without sustained financial supply lines, no terrorist organisation can recruit, arm, operate, or survive. The battle, therefore, must be fought in the boardrooms, banking halls, bureau de change windows, and digital wallets not merely on the battlefield.
This article, drawing on internationally accepted frameworks and the latest policy recommendations, presents a comprehensive roadmap of strategies the Federal Government of Nigeria must adopt and strengthen to decisively combat terrorism financing. These strategies go beyond traditional asset freezing to encompass proactive intelligence, legislative reform, private sector mobilisation, and robust international cooperation.
I. UNDERSTANDING THE TERRORISM FINANCING THREAT
LANDSCAPE
Terrorism financing in Nigeria operates through both formal and informal channels. Designated terrorist groups exploit legal businesses, non-profit organisations (NPOs), unregulated money transfer systems such as the Hawala network, Bureau De Change (BDC) operators, and increasingly, virtual assets and cryptocurrency platforms. These channels share a common vulnerability: inadequate oversight and porous regulatory frameworks that create gaps through which illicit funds travel with relative ease.
The Financial Action Task Force (FATF) the global standard-setting body on anti-money laundering and counter-terrorism financing (AML/CFT) has consistently flagged Nigeria’s exposure to terrorism financing risks, citing deficiencies in beneficial ownership transparency, supervision of non-financial businesses, and the capacity of law enforcement agencies to detect and prosecute complex financial crimes. For Nigeria to exit grey listing and, more critically, to protect its citizens, decisive, coordinated action is non-negotiable.
II. ENHANCED IDENTIFICATION AND ASSET FREEZING
The first and most immediate line of defence against terrorism financing is the swift identification and freezing of assets belonging to designated individuals and organisations. However, current practice in Nigeria often limits freezing measures to assets directly linked to a specific act of terrorism a dangerously narrow approach that allows financiers to shelter funds in adjacent accounts, family holdings, or front companies.
Targeted Financial Sanctions (TFS)
The Federal Government must strengthen its Targeted Financial Sanctions regime to ensure that all funds, financial instruments, and economic resources whether or not directly tied to a specific terrorist act are captured when a designation is made. This aligns with United Nations Security Council Resolutions 1267, 1373, and 1988, to which Nigeria is a signatory.
The scope of asset freezing must be broadened explicitly to cover assets owned or controlled by designated persons not merely those held in their name. Terrorist financiers are sophisticated actors who routinely obscure ownership through nominees, shell companies, and layered corporate structures. Regulators must be empowered and mandated to look through these structures.
Swift Intelligence-to-Action Pipelines
Intelligence agencies the Department of State Services (DSS), the National Intelligence Agency (NIA), and Military Intelligence must establish fast-track protocols with the Central Bank of Nigeria (CBN), the Nigerian Financial Intelligence Unit (NFIU), and the Economic and Financial Crimes Commission (EFCC) to ensure that actionable financial intelligence translates into asset freezing within hours, not weeks. The window between identification and action is precisely when terrorist financiers move funds to safety.
III. REGULATORY AND SUPERVISORY REFORMS
Regulation without effective supervision is merely paperwork. Nigeria must overhaul its supervisory architecture to ensure that high-risk sectors receive the oversight their risk profile demands.
Hawala and Bureau De Change Operations
Alternative remittance systems, particularly Hawala networks and Bureau De Change operators, remain among the most exploited channels for terrorism financing in Nigeria. Cash-intensive, lightly regulated, and operating largely outside the formal banking system, these channels provide convenient cover for moving funds across state and national borders. The CBN must significantly intensify its supervisory activities in this sector, including mandatory registration, transaction reporting thresholds, and real-time monitoring tools.
Beneficial Ownership Transparency
Nigeria’s Corporate Affairs Commission (CAC) has made some progress on beneficial ownership registers, but enforcement remains weak. Terrorist organisations routinely establish front companies to receive and disburse funds. The Federal Government must enact regulations requiring timely, accurate, and publicly accessible beneficial ownership declarations and must ensure that false declarations carry meaningful criminal penalties.
Virtual Asset Regulation
The rise of cryptocurrency and decentralised finance platforms presents a new and rapidly evolving frontier for terrorism financing. Nigeria has one of the highest rates of cryptocurrency adoption on the African continent, making this a particularly acute risk. The Federal Government, through the Securities and Exchange Commission (SEC) and the CBN, must fully implement FATF’s Standards on Virtual Asset Service Providers (VASPs), including mandatory know-your-customer (KYC) requirements, transaction reporting, and international cooperation obligations for crypto exchanges operating in Nigeria.
IV. PUBLIC-PRIVATE PARTNERSHIPS AND INFORMATION SHARING
No government agency can effectively combat terrorism financing in isolation. The private sector particularly commercial banks, microfinance institutions, insurance companies, and telecommunications firms sits at the front line of suspicious transaction detection. Mobilising this sector is therefore not optional; it is essential.
Two-Way Information Flow
Currently, information sharing is largely one-directional: financial institutions report to government agencies, which rarely share intelligence in return. This must change. The NFIU and relevant security agencies should establish a formalised mechanism to share sanitised intelligence on terrorism financing typologies, high-risk indicators, and emerging methods with the private sector. Banks that understand the threat are far better positioned to detect it.
Streamlined Suspicious Transaction Reporting
Nigeria’s current suspicious transaction reporting (STR) framework conflates terrorism financing reports with routine anti-money laundering reports, creating a volume problem that buries the most critical intelligence. Dedicated, fast-track reporting channels specifically for terrorism financing suspicions must be created, ensuring that such reports receive immediate, priority treatment by the NFIU and are escalated directly to security agencies without bureaucratic delay.
Private Sector Capacity Building
The Federal Government, in partnership with the Chartered Institute of Bankers of Nigeria and relevant professional bodies, must invest in sustained training programmes to equip compliance officers, bank staff, and non-financial designated businesses with the skills to recognise unusual transaction patterns particularly those with no obvious economic rationale that may indicate terrorism financing activity.
V. STRENGTHENING THE LEGAL FRAMEWORK
A counter-terrorism financing strategy is only as strong as the legal architecture that underpins it. Nigeria’s existing legal framework primarily the Terrorism (Prevention and Prohibition) Act 2022 and the Money Laundering (Prevention and Prohibition) Act 2022 represents significant progress, but critical gaps remain in implementation and judicial capacity.
Explicit Criminalisation and Predicate Offence Status
Terrorism financing must be unambiguously and specifically criminalised as a stand-alone offence in Nigerian law not merely as an ancillary charge to terrorism itself. Furthermore, it must be treated as a predicate offence for money laundering, enabling prosecutors to pursue financiers through multiple, reinforcing legal avenues and maximising the tools available to freeze, seize, and confiscate illicit assets.
Non-Conviction-Based Asset Confiscation
One of the most powerful tools available in international AML/CFT practice non-conviction-based (NCB) confiscation allows courts to seize assets derived from or intended for terrorist financing even when a criminal conviction is not secured. This is particularly vital in cases where suspects flee the jurisdiction or where criminal evidence standards are difficult to meet. Nigeria must strengthen its legal provisions for NCB confiscation and ensure judges are trained in its application.
Judicial Capacity and Expedited Prosecution
The Federal Government must invest in specialist training for judges and prosecutors handling terrorism financing cases, and should consider establishing dedicated financial crimes courts or chambers with the expertise and resources to adjudicate complex cases efficiently. Justice delayed in this context is not merely justice denied it is an operational subsidy to terrorist organisations.
VI. INTERNATIONAL AND REGIONAL COOPERATION
Terrorism financing is inherently transnational. Funds raised in Sahel countries transit through West African financial hubs; cryptocurrencies move through servers on multiple continents; hawala networks span Nigeria, the Middle East, and Europe. No domestic strategy, however well-designed, can succeed without robust international partnerships.
Cross-Border Financial Intelligence Exchange
Nigeria must deepen its bilateral and multilateral intelligence-sharing arrangements, including with Interpol, the Egmont Group of Financial Intelligence Units, the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), and key international partners. Real-time exchange of financial intelligence including information on suspicious transactions, account freezing actions, and emerging typologies is essential to tracing funds as they cross borders.
Mutual Legal Assistance Treaties (MLATs)
The Ministry of Justice must prioritise the conclusion, ratification, and active utilisation of Mutual Legal Assistance Treaties with key jurisdictions. MLATs are the legal backbone of international cooperation in terrorism financing investigations, enabling the compelled disclosure of financial records, extradition of suspects, and enforcement of confiscation orders across borders. Nigeria must also ensure that its domestic agencies have the trained personnel and resources to execute international requests promptly.
VII. SPECIALISED TRAINING AND DATA ANALYTICS
The modern terrorism financier is sophisticated. They use layered corporate structures, trade-based money laundering, cryptocurrency mixers, and complicit professional gatekeepers including lawyers, accountants, and real estate agents. Combating this requires equally sophisticated human capital and technological capability.
Capacity Building Across the Security Architecture
The Federal Government must launch comprehensive, regular, and mandatory training programmes for law enforcement officers, intelligence analysts, financial investigators, and prosecutors on the latest terrorism financing methodologies. Specialist units within the NFIU, EFCC, DSS, and Nigeria Police Force financial crimes units must be equipped, adequately staffed, and insulated from political interference.
Leveraging Data Analytics and Artificial Intelligence
Nigeria’s large financial sector generates enormous volumes of transaction data daily. Manual review of suspicious transaction reports is wholly inadequate to capture the full picture. The Federal Government, in partnership with the private sector and international technical assistance providers, must invest in advanced data analytics platforms and AI-driven transaction monitoring systems capable of identifying suspicious patterns, network connections, and anomalous behaviours at scale reducing dependence on individual bank officers spotting suspicious activity amidst millions of daily transactions.
SUMMARY OF RECOMMENDED ACTIONS
Recommended Action
Lead Agency / Actor
1) Broaden targeted financial sanctions to cover all assets owned or controlled by designated persons
CBN / NFIU / OFAC-equivalent
2
Establish fast-track intelligence-to-asset-freezing pipelines (within 24 hours)
DSS / NIA / NFIU / EFCC
3
Intensify supervision of Hawala networks and Bureau De Change operators
CBN / NFIU
4
Enforce comprehensive beneficial ownership registration and verification
CAC / FIRS / NFIU
5
Implement full FATF Virtual Asset Service Provider (VASP) regulations
SEC / CBN
6
Create two-way intelligence-sharing mechanisms with the private sector
NFIU / NSA / CBN
7
Establish dedicated terrorism financing STR fast-track reporting channels
NFIU / CBN
8
Criminalise terrorism financing explicitly as a predicate offence for money laundering
National Assembly / AGF
9
Enact and enforce non-conviction-based asset confiscation provisions
AGF / Federal High Court
10
Establish specialised financial crimes courts or chambers
National Judicial Council / FGN
11
Deepen cross-border financial intelligence exchange via Egmont Group, Interpol & GIABA
NFIU / NIA / Min. of Justice
12
Conclude and operationalise Mutual Legal Assistance Treaties with key jurisdictions
Ministry of Justice / AGF
13
Launch mandatory CFT training programmes for law enforcement and prosecutors
NFIU / NPS / EFCC / DSS
14
Deploy AI-driven transaction monitoring and data analytics platforms
NFIU / CBN / Private Sector
The above recommendations are based on internally accepted counter-terrorism frameworks including FATF Recommendations, UN Security Council Resolutions 1267, 1373 and 1988, and the provisions of Nigeria’s Terrorism (Prevention and Prohibition) Act 2022 and Money Laundering (Prevention and Prohibition) Act 2022. The recommendations are intended to guide policy making in Nigeria.
CONCLUSION
Terrorism financing is not an abstract, technical problem it is the engine of violence, displacement, and insecurity that costs Nigerian lives every day. The Federal Government’s response must be as determined, sophisticated, and coordinated as the threat itself. Piecemeal, reactive measures are no longer sufficient.
The six-pillar framework outlined in this article spanning asset identification and freezing, regulatory reform, public-private collaboration, legal strengthening, international cooperation, and technological capability offers a coherent and comprehensive blueprint. It is aligned with global FATF standards and draws on the best practices of jurisdictions that have successfully degraded terrorist financing networks.
The cost of inaction is measured not in policy documents, but in lives. Nigeria has both the obligation and the opportunity to cut off the oxygen supply to terrorism and the time to act decisively is now.
Dear readers, we really need your support to keep on serving you with authoritative, truthful, and juicy stories everyday. For your support, please reach out to the editor @gavelinternational66@gmail.com