INTRODUCTION
Public sector accounting is the system of accounting that involves recording and
maintenance of books of accounts by the government authorities on their financial
performance. There are three categories of organizations normally working in any
environment: public, private and non-profit concerns.
Conceptual review
Betta Edu was suspended with immediate effect while Nigeria’s anticorruption agency
carries out a “thorough investigation” of all ministry financial transactions,” presidential
spokesman Ajuri Ngelale said in a statement. It said the investigation would extend to the
entire framework of Nigeria’s social investment programs.
Negative impact of money laundering in Nigeria’s economy
Money laundering has significant negative impacts on Nigeria, as it undermines the
country's economic stability, financial integrity, and overall development. Here are some
of the key consequences of money laundering in Nigeria:
Economic Distortion: Money laundering distorts economic activities by injecting illicit
funds into the economy. This can lead to inflation, as the increased money supply without
corresponding economic growth can drive up prices.
Weakened Financial Institutions: Money laundering poses a threat to the stability of
financial institutions. When these institutions are used to facilitate illicit financial flows,
it erodes public confidence in the banking system and can lead to a loss of trust in
financial institutions.
Reduced Foreign Direct Investment (FDI): The presence of money laundering activities
can deter foreign investors. Investors are generally hesitant to engage in business
environments where there is a high risk of corruption, financial crime, and weak
regulatory frameworks.
Impact on International Reputation: Money laundering tarnishes a country's international
reputation. Nigeria may face sanctions and restrictions in international financial markets,
making it more challenging to access global capital and engage in international trade.
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Corruption and Governance Issues: Money laundering is often linked to corruption, and
both issues are intertwined. Corrupt practices can thrive when illicit funds are being
moved through financial systems, leading to weak governance and a lack of transparency.
Social Consequences: Money laundering can exacerbate income inequality and contribute
to social unrest. As illicit funds flow into certain sectors, such as real estate, it can drive
up prices and create barriers to affordable housing for the general population.
Security Concerns: Illicit financial flows often contribute to the financing of criminal
activities, including terrorism and organized crime. This poses a serious threat to national
security.
Regulatory Challenges: Effectively combating money laundering requires robust
regulatory frameworks and enforcement mechanisms. Nigeria may face challenges in
implementing and enforcing anti-money laundering (AML) and counter-terrorist
financing (CTF) measures.
Strain on Law Enforcement: Money laundering activities can overwhelm law
enforcement agencies, diverting resources away from other critical areas. This strain can
hinder the ability to combat other forms of crime and maintain overall public safety.
Objectives of government accounting
The objectives of Government accounting include the following:
1. Provide evidence of stewardship
Rendering stewardship is being able to account transparently and diligently for resources
entrusted. Public Sector operators are constrained to display due diligence and sense of
integrity in the collection and disposal of public funds.
2. Assisting, planning and control
The future is full of risks and uncertainties. Mapping out plans prevents an organization
from drifting from the right direction. Plans of actions provide the focus of activities
which are being pursued. The circumstances which are not seen are built into plans so as
to avoid or at least reduce corporate failure. Public Sector establishments should act in
accordance with the ‘mandate theory’ of governance.
3. Ensuring objective and timely reporting
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The users of information on Public Sector Accounting are in a hurry to bridge their
knowledge gaps of what the Government of their country is doing. They definitely value
quick and accurate statistics to evaluate the performance of Government.
4. To ascertain the authenticity of transactions and their compliance with the
established laws, regulations and statutes
Public Sector disbursements should accord with the provisions of the Appropriation Acts
and Financial Regulations. There should be due authorizations for all payments so as to
avoid the commission of acts of misappropriation.
From section 88, sub-section 2, “expose corruption, inefficiency or waste in the
execution or administration of laws within its legislative competence and in the
disbursement or administration of funds appropriated by it.\
The Economic and Financial Crimes Commission (EFCC) detained a former
Minister of Humanitarian Affairs, Disaster Management and Social Development, Sadiya
Umar-Farouq, for questioning over allegations of corruption in the handling of N37.1
billion social intervention funds during her tenure.
Mrs Umar-Farouq arrived at the headquarters of the commission in Abuja in honour of an
earlier invitation over the pending case.
The commission detained Mrs Shehu after raiding NSIPA’s office in the Federal
Secretariat, Abuja, on 2 January. She was held for questioning till the following day
when she was released on bail.
Mrs Shehu, who was recently suspended by President Bola Tinubu, was responsible for
overseeing the Conditional Cash Transfer Programme during President Muhammadu
Buhari’s administration. She was replaced with Akindele Egbuwalo, in an acting
capacity.
The EFCC also summoned Mrs Umar-Farouk for questioning over the case, but she
requested a rescheduling of the appointment.
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When the news of the ongoing EFCC investigations started filtering out linking her to
one of the officials at the centre of the alleged scam, Mrs Umar-Farouk tweeted to deny
any wrongdoing.
Denial of the allegation
“I remain proud to have served my country as a minister of the Federal Republic of
Nigeria with every sense of responsibility and will defend my actions, stewardship and
programmes during my tenure whenever I am called upon to do so,” she had posted on X.
A former Minister of Humanitarian Affairs, Disaster Management, and Social
Development, Sadiya Umar-Farouq, has denied knowing a contractor, James Okwete,
who was arrested by the Economic and Financial Crimes Commission for allegedly
laundering N37bn.
She also said she served as a minister with every sense of responsibility and would
defend her actions whenever called upon to do so.
Umar-Farouk made the rebuttal on Monday in a message posted on X (formerly Twitter).
This is as the Human Rights Writers Association of Nigeria called for the prosecution of
all those involved.
The PUNCH and other news agencies had exclusively reported that details of an
ongoing EFCC probe revealed that N37bn was transferred from the Federal
Government’s coffers and sent to 38 different bank accounts domiciled in five legacy
commercial banks belonging to or connected with Okwete.
Responding to the development, Umar-Farouk said, “There have been a number of
reports linking me to a purported investigation by the Economic and Financial Crimes
Commission into the activities of one James Okwete, someone completely unknown to
me.
Sunday PUNCH had reported that the EFCC uncovered N37bn allegedly
laundered in the Ministry of Humanitarian Affairs under former minister, Umar-Farouk.
Details of the ongoing probe exclusively obtained by Sunday PUNCH revealed that the
money was transferred from the Federal Government’s coffers and sent to 38 different
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bank accounts domiciled in five legacy commercial banks belonging to or connected with
the contractor, Okwete.
Meanwhile, competent EFCC sources confirmed to The PUNCH that Okwete was
arrested by operatives of the anti-graft agency and is currently detained at the
commission’s headquarters, Jabbi, Abuja over the ongoing probe.
Conclusion
To address these issues, Nigeria needs to strengthen its regulatory and legal
frameworks, enhance international cooperation, and improve transparency and
governance across sectors. The implementation of effective anti-money laundering
measures is crucial to mitigating the impact of money laundering on the country.
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