Curbing illicit financial flows requires risk-based, technology-enabled AML enforcement – Onokevbagbe
Nigeria must adopt a risk-based approach to anti-money laundering (AML) enforcement, strengthen inter-agency data coordination, and leverage technology to detect illicit financial flows (IFFs) more effectively, according to legal scholar Iguehi Rosemary Onokevbagbe, whose recent research explores how regulatory frameworks can strengthen financial-system resilience.
She argues that the country’s current AML framework is largely compliance-driven rather than risk-informed – a gap that enables corruption networks and weakens investor confidence.
Onokevbagbe, a certified anti-money laundering specialist (CAMS) and former In-House Counsel at the Central Bank of Nigeria, is the author of “Addressing Illicit Financial Flows in Nigeria: The Role of AML/CFT/CPF Frameworks,” published as Chapter 9 in The Resilience of the Nigerian Financial System: Legal Issues, Prospects and Challenges and now available on SSRN.
The study examines how weaknesses in anti-money-laundering (AML), counter-terrorist-financing (CFT), and counter-proliferation-financing (CPF) enforcement enable capital flight, corruption, and revenue loss in emerging markets.
“Nigeria has made legislative progress through the Money Laundering (Prevention and Prohibition) Act 2022 and the Terrorism Prevention and Prohibition Act 2022,” Onokevbagbe told BusinessDay.
“However, enforcement remains fragmented. A coherent, risk-based supervision model that links the CBN, NFIU, EFCC, ICPC, and other agencies through real-time data sharing would significantly strengthen financial-system integrity.”
She emphasised that IFFs erode investor confidence, reduce fiscal space for infrastructure, and compromise governance outcomes. According to her, the regulatory architecture must evolve from reactive compliance to proactive risk management grounded in technology and analytics.
Read also: How illicit financial flows stunt Africa’s growth
Her paper calls for:
Data interoperability between regulators and law enforcement agencies;
Technology-driven monitoring using AI for anomaly detection;
Formal inter-agency coordination frameworks to improve information sharing; and
Capacity building across supervisory and judicial institutions to ensure consistent enforcement of AML/CFT/CPF obligations.
“Illicit financial flows are not only an economic issue, they are a governance issue,” she added. “A credible enforcement system that ensures transparency, accountability, and cross-border cooperation is critical for sustainable development.”
She also highlights closer alignment with FATF recommendations, enhanced beneficial-ownership transparency, and clearer supervision of virtual-asset activities as priorities for the next phase of reforms.
Onokevbagbe is currently pursuing her LL.M. in regulation, compliance, and sustainability at the University of Illinois College of Law, continuing research on regulatory innovation and financial integrity. Her contributions underscore how developing economies can leverage data governance and policy coordination to combat financial crime while promoting inclusive growth.
“Policy coherence and regulatory integrity will define Nigeria’s ability to safeguard its financial system from systemic risks,” she said. “The goal is a resilient financial ecosystem where integrity and innovation reinforce, not undermine, each other.”
The Resilience of the Nigerian Financial System: Legal Issues, Prospects and Challenges (2025) features essays by leading legal scholars and practitioners, including Prof. Fabian Ajogwu, SAN, Hon. Justice (Prof.) E.A. Taiwo, O.M. Atoyebi, SAN, Dr Tukur Galadima, Ebaide Queen Omiunu, and Iguehi Rosemary Onokevbagbe, among others – published in honour of Mr Kofo Salam-Alada, a respected legal and regulatory leader who served as Director of Legal Services at the Central Bank of Nigeria and made significant contributions to Nigeria’s financial system governance.
