Every emerging third-world nation needs help in getting their products to world markets. They also need investment capitalization dollars coming into the nation so they can increase their business endeavors and grow their economies. Indeed, there are huge risk issues when investing in foreign emerging markets, but there is also the potential for huge rewards and profit too. One nation on the World Map of emerging nations is Nigeria. It is an oil rich country and has a lot going for it.
Nigeria also has a bad stigma due to the email scams and international banking wire transfer fraud coming from criminal elements from within their nation. What is so unfortunate is that many business people in the United States and elsewhere have been introduced to the nation of Nigeria through these emails fraud phishing scams. Now, it is very unlikely that US Businesses will be willing to invest in Nigeria or take on Nigerian Business Partners.
Therefore, the country of Nigeria has developed a horrible reputation in the world and this is going to affect their future growth. Trust is critical when working with overseas business vendors or partners, without it the business investment monetary flows slow to a trickle and this hurts the future potential. One question on many people’s minds in considering this issue is: Will Nigerian economic development and Public Relations Teams be able to mind the fence and restore faith and trust in that country?
Would you trust someone from Nigeria as a vendor for your company? Would you trust someone who told you they were a Nigeria Official that wanted to offer you an investment opportunity? Think about that, see the problem there?
The price of a ton of wheat has jumped to $350 from $200 last year
Global wheat prices are falling Friday ahead of the signing of a deal that would allow stranded wheat to leave Ukraine for a hungry world including Nigeria where bread prices have surged
The price of a ton of wheat has jumped to $350 from $200 last year.
This follows an announcement by Turkey which says it’s brokered a deal with Russia to unblock exports of grain from Ukraine through the Black Sea. The deal is due to be signed in Instanbul this afternoon by both countries and the UN secretary-general.
The Russian defence minister is already in Istanbul to sign the deal.
Read also: Nigeria’s fish, wheat imports from Russia tumble 83%
Ukraine is one of the world’s largest grain suppliers to the world but Russia which invaded Ukraine in January has been blocking its main seaports.
The global shortage of wheat has sent bread prices surging in Nigeria and the rest of the world, threatening hunger and people’s revolution in some countries.
Although Ukrainian officials at the talks caution against optimism claiming Russia cannot be trusted, diplomats are hopeful.
“We don’t trust Russians at all,” said Oleksiy Honcharenko, a Ukrainian negotiator.
The deal will involve Ukrainian vessels guiding grain-carrying ships through mined waters and Russia agreeing to allow the vessels safe passage along the Black Sea.
Under the deal, Turkey would inspect the vessels and provide guarantees to Russia that the Ukrainians would not be ferrying in weapons via the route.
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ABUJA — Nigerian bread makers suspended production from Wednesday to protest against soaring prices of ingredients such as flour and sugar, bakers associations said.
Prices of staples such as bread, maize and rice have risen since the start of this year, helping to propel inflation to its highest in more than five years in June.
The Master Bakers Association of Nigeria (MBAN) and smaller Premium Breadmakers Association of Nigeria (PBAN), which together have 700,000 members, want the government to stop charging a 15% levy on imported wheat, and to be issued licenses to import sugar.
PBAN also wants its members to gain access to low interest loans from the central bank available to some small- and medium-sized businesses, its president Emmanuel Onuorah said.
MBAN said its members had stopped work on Wednesday for a week while PBAN will suspend production from Thursday for four days.
“We had no option than to shut down for those days to draw government attention to our plight,” Jude Okafor, the MBAN national secretary told Reuters.
The impact was not yet immediately apparent on the streets of Lagos on Wednesday, where shops were still stocked with fresh bread.
Mr. Onuorah from PBAN said bakeries were making losses, which was no longer sustainable.
Global wheat prices have risen since Russia invaded Ukraine in February, affecting countries like Nigeria that import most of their wheat. Russia and Ukraine are major wheat exporters.
Mr. Onuorah said the price of a 50 kg bag of flour had risen 7.4% since June and by more than half this year to 29,000 naira ($70).
The price of diesel has also soared nearly threefold this year.
The Ministry of Industry, Trade and Investment spokesman did not respond to calls and messages for a comment. — Reuters
Nigerian tech companies are grappling with the aftermath of a Kenyan court account freeze order and a decision by a Texas court to jail the founders of Ping Express over money laundering.
The charges on the four tech companies are the most money laundering allegations the tech ecosystem in Nigeria has seen in a month and could have ramifications for the image of startups in the country looking for investors abroad.
Experts say that henceforth many startups will be compelled to focus on strengthening lax Know-Your-Customer (KYC) and anti-money laundering (AML) practices.
KYC refers to due diligence that banks and other financial institutions must perform on their customers before doing business with them to prevent corruption, identity theft, financial fraud, money laundering and terrorism financing, according to Fraud.net.
“AML and KYC requirements are more or less the same globally. I however opine that with the many finance and technology innovations, they should be reviewed and scope broadened to include all emerging, and continuously emerging innovations,” said Evalyn Gachoki, a fintech law practitioner.
While Anslem Oshionebo and Opeyemi Odeyale, Nigerian founders of Ping Express, a Texas-based fintech company, pleaded guilty on Saturday to failing to adequately guard against money laundering in a court in the Northern District of Texas, Flutterwave, Korapay, and Kandor are battling for access to their accounts frozen by the Asset Recovery Agency (ARA) of Kenya.
Flutterwave is the most affected, with 56 accounts it has with Guaranty Trust Bank (29 accounts), Equity Bank (17), and Ecobank (six) all frozen. The 56 accounts held about $56 million.
Korapay Technologies had one of its accounts with $249,565 frozen, while two accounts worth a combined $126,841 belonging to Kandor Technologies also suffered the same fate.
Although the tech companies insist that they followed due process and every KYC practice, experts say cases of money laundering usually happen because someone may have ignored KYC.
“I’d argue poor KYC exposes them to fraud and non-compliance on AML,” said Victoria Crandal, a tech PR expert and founder of No Filter PR. “Fintechs prioritise growth and user experience and KYC becomes an after-thought. This partly explains the fraud within MTN’s PSB and possibly FW (Flutterwave) alleged AML problems in Kenya.”
Victor Asemota, chairman of Edo Innovates, has a slightly different opinion. According to him, KYC is not a fintech problem because the government owns identification. Since fintechs do not control identification, they have to prioritise KYC.
“We have helped MTN do AML on their mobile payments platforms for a decade. They take it extremely seriously; same with Flutterwave. Misunderstanding by regulators of settlement occurs. Tech glitches are a reality,” Asemota said.
Other experts say anti-money laundering issues arise when tech startups try to outsmart the regulator. For example, merchant transactions are facilitated through merchant category codes (MCC).
An MCC is a four-digit number used by credit card companies to classify businesses. A business that sells both services and products will typically reflect the business type that makes up the dominant amount of sales. Businesses can request additional MCC for a different part of a business. For example, a pharmaceutical store that has a grocery store in one location would likely have different MCCs within the same building.
Every merchant has a unique ID and every transaction has a code. There are codes that when merchants are initiating transactions, they raise a red flag, like gambling, and pornography. Usually, the Nigerian Interbank Settlement System (NIBSS) is supposed to know when a merchant is making a particular transaction.
However, there are cases of abuse. Merchants that want to help people move funds would simply change the code from which the transaction is originating and use another code that diverts attention. While some companies often get away with it, others do not.
The anti-money laundering policy is usually strong in many countries including Nigeria where the Nigerian Financial Intelligence Unit is in charge of Anti-Money Laundering/Combating the Financing of Terrorism; however, there are jurisdictions where the enforcement is stricter.
Kenya happens to be one of them, according to several people knowledgeable about the issue. Patrick Ngugi Njoroge, governor of the Central Bank of Kenya, said at a conference organised by Visa in April that the country was intensifying compliance as part of measures to strengthen the financial system of the country.
The country, in September 2021, gazetted the Proceeds of Crime and Anti-money Laundering Bill, which seeks to amend the current Proceeds of Crime and Anti-money Laundering Act, 2009.
The bill expands the definition of “reporting persons” under the Act. This will now include advocates, notaries, and other independent legal professionals who are sole practitioners, partners, or employees within professional firms so that the obligations to monitor complex unusual, suspicious, large, or other transactions and to report any transactions that constitute or may be related to money laundering as provided under Part IV of the Act apply to them.
The bill also seeks to give the centre the authority to interrupt a transaction for not more than five working days where there is evidence of suspicious activity taking place. This will allow the centre adequate time to investigate the transaction.
The bill also seeks to introduce provisions that will limit the right to privacy enshrined in the Constitution of Kenya, 2010 in relation to the prevention, detection, and investigation of money laundering and financing of terrorism.
According to a legal compliance professional who spoke to BusinessDay on condition of anonymity, the existing Kenyan anti-money laundering law allows ARA to hold on to the funds in the frozen accounts pending when it has concluded investigations. This could mean 45 days at the lower court and 90 days at the higher court.
“This whole area is confusing, to be honest. The startups are not entirely guilt-free. But it’s not as simple as Nigerian founders doing fraud. They are not that stupid. The reality is there are a lot of loopholes in corridors outside of their control. KYC is set by the government mostly.
BVN, NIN, and ID cards all come from the government. If the government doesn’t tighten up its process, people will take advantage and the result will reflect on the fintechs processing value,” said Henry Ojuor, founder in residence with Startupbootcamp, a global startup and innovation accelerator for startups, corporates, and governments.
Read also: How to Leverage Happy Customers to Promote Your Brand
Kaliba Bilala, a tech expert, told BusinessDay that enforcement often depends on the regulatory focus of the jurisdiction in cross-border payments.
“Despite the strides achieved by Nigerian fintech firms, you can hardly get public data on their activities from the CBN or NIBSS.
The incentives driving Nigerian fintechs, and possible lax domestic regulations, may not be tolerated in jurisdictions that are strict. The allegation against the affected firms is not unique to Nigerian fintech, and dare I say, not borne out of envy,” said Bilala.
While the companies continue to proclaim their innocence, a bigger challenge they face is how to access the funds in those accounts.
For companies like Flutterwave, the more days the funds spend in ARA’s custody, the worse the anger of merchants they have to deal with.
“These funds do not belong to these companies. They are given to them by merchants, and there is a limit to how long a patient can be patient with you,” the compliance officer said.
Kandon Technologies, in its statement, described itself as a liquidity management startup offering treasury solutions, alternative trading, and related financial services. The company said it has facilitated transactions for a host of its partners doing legitimate businesses and it has records of these transactions, which are available and can be verified.
“As a company, we have always adhered to applicable regulatory requirements in our transactions and engaged with regulatory bodies to stay compliant,” the company said. “We pledge to continue working with regulatory bodies and all relevant stakeholders to prove our innocence and straighten the records.”
Korapay, on its part, said it deposited the funds in its freshly opened bank account as a capital requirement from the Central Bank of Kenya (CBK) for obtaining a payment service provider and remittance operator licence. In line with the CBK requirements, this amount was left untouched pending the granting of the licence. The company claimed that the $250,000 deposit is the only transaction carried out on that account to date.
One of the options being explored by the companies includes filing a legal action asking the court to compel ARA to put the funds in accounts or assets that yield interest and allow them access to the interest to enable them to fulfill their obligations to their merchants.
Evalyn Gachoki said government agencies like ARA need to engage fintech experts, regulators, and stakeholders towards identifying gaps, if any.
“Anti-money laundering laws were created way before fintech was birthed. The laws should be reviewed to incorporate the many solutions technology has introduced into finance,” Gachoki said.
A Nigerian man, Olamilekan Idowu Fatade has been extradited to the United States of America on Thursday, to face prosecution on fraud and aggravated identity theft charges.
According to a statement by the Department of Justice, US Attorney’s Office, Southern District of New York on Friday adding that his repatriation was in connection with “fraudulently obtain and attempt to obtain millions of dollars of medical equipment, laboratory products, computer equipment and hardware, and other merchandise from suppliers of such merchandise across the United States by impersonating, among other individuals, procurement officials of U.S. state and local governments and educational institutions.”
It was also revealed that Fatade will be presented before US Magistrate Judge James L. Cott. The case is assigned to U.S. District Judge Valerie E. Caproni.
Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation made the announcement on Saturday.
Williams said: “Fatade Idowu Olamilekan is alleged to have carried out a sprawling criminal scheme to fraudulently obtain medical equipment and other merchandise. Olamilekan allegedly identified U.S. procurement officials, including the Chief Procurement Officer for New York, to then impersonate them and use their credentials to request millions of dollars in equipment shipments from various suppliers without advance payment. Olamileken has now been extradited to the U.S. for his alleged attempt to illegally profiteer from the worldwide pandemic.”
In addition, Driscoll said: “We allege Olamilekan impersonated state procurement officials during the height of the pandemic and stole critically-needed medical equipment that was in high demand and short supply. Fraud can have immediate and direct impacts on people, and we remain determined to bring those who commit it to justice.”
It was reported that from at least in or about 2018 through at least on or about September 14, 2020, during the coronavirus pandemic in 2019, Olamilekan impersonated the Chief Procurement Officer of New York State in an effort to fraudulently obtain medical equipment, including defibrillators. He engaged in the following conduct to carry out his criminal scheme:
He also identified procurement officials to impersonate, by using used aliases and a Lithuanian web hosting company to register email accounts with domains that had slight variations from the legitimate email accounts used by procurement officials in order to “spoof” or impersonate those officials’ email accounts (the “spoofed emailed accounts”).
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In total, Olamilekn registered and used deceived email accounts impersonating at least (i) eight different procurement officials of state and local governments in California, Illinois, Minnesota, New York, North Carolina, Pennsylvania, Texas, and Vermont; and (ii) three procurement officials of educational institutions located in Georgia and New York.
These were among other criminal charges levelled against Olamilekan which include the spoofed email accounts to send emails impersonating the procurement official and seeking quotes for medical, laboratory, and computer equipment from targeted suppliers.
He also received a response from a targeted supplier, he provided the supplier with a purchase order containing the forged signature of the impersonated procurement official and an address for a warehouse located in the United States for delivery and storage of the equipment purchased.
Olamilekan, a 40-year-old resident of Lagos, Nigeria, is charged with one count of wire fraud, which carries a maximum penalty of 27 years in prison, one count of interstate transportation of stolen property, which carries a maximum penalty of 17 years in prison, and 12 counts of aggravated theft, which carry a mandatory minimum penalty of two years in prison to be run consecutively to any other sentence imposed.
The maximum and minimum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
