UNITY AND FAITH, PEACE AND PROGRESS

TYPOLOGIES REPORT ON

TERRORISM FINANCING IN

NIGERIA

DECEMBER 2023

A publication of the Nigerian Financial Intelligence Unit

The Nigerian Financial Intelligence Unit (NFIU) is the central national agency responsible for the

receipt of disclosures from reporting organisations, the analysis of these disclosures and the production of intelligence for dissemination to competent authorities. The NFIU is an autonomous unit, domiciled within the Central Bank of Nigeria and the central coordinating body for the country's Anti-Money Laundering, Counter-Terrorist Financing and Counter- Proliferation Financing (AML/CFT/CPF) framework.

No reproduction or translation of this publication may be made without

prior written permission.

Applications for such permissions, for all or part of this publication,

should be made to

The Director/Chief Executive Officer, Nigerian Financial Intelligence Unit

12, Ibrahim Taiwo Street, Aso Villa Abuja, Nigeria 1, Monrovia Street, Block 3, Wuse II, Abuja, Nigeria (e-mail: info@nfiu.gov.ng) © 2023 NFIU. All rights reserved.

Table of Contents

Acknowledgments. 5 List of Acronyms. 6 Chapter One: Introduction 8 1.1 Background 8 1.2 Report Objectives 10 1.3 Methodology 11 Chapter Two: Overview of Terrorist Financing in Nigeria, Legal and Institutional Framework in the Fight Against Terrorist Financing in Nigeria. 13 2.1 Terrorism Financing in Nigeria. 13 2.2 Types of Terrorism Financing in Nigeria. 14 2.2.1 Fund Raising.. 14 2.2.2 Movement of Terrorist Funds 19 2.2.3 Utilization of Terrorist Funds.. 20 2.3 Legal Framework in the Fight against Terrorist Financing in Nigeria. 21 2.4 Institutional Framework in the Fight against Terrorism. 24 2.5 National Strategies for Countering the Financing of Terrorism in Nigeria.. 29 2.6 Role of Regional and International Organizations 30 2.7 The Role of Informal Financial Systems in Terrorist Financing 31 2.8 Analysis of the Effectiveness of Existing Laws and Regulations in Preventing Terrorist Financing 34 Chapter Three: Typologies of Terrorist Financing, Analyses of Case Studies, Red flags and Indicators. .......36 Typology 1: The Use of Point-Of-Sale Agents (POS) to Finance Terrorism 37 Typology 2: The use of Automated Teller Machines for large cash withdrawals to finance terrorism 39 Typology 3: The use of online transactions for Terrorism Financing 41 Typology 4: The Use of Faith-Based Organizations to Finance Terrorism 43 Typology 5: Unauthorised Conduct of Arms Deal. 45 Typology 6: Large movement of cash by NGOs. 46 Typology 7: Kidnap for Ransom. 47 Typology 8: Use of Betting Platforms to move proceeds of Kidnapping for Ransom (KFR) 49

Typology 9: Kidnap for Ransom by Yan Bindiga. 51 Typology 10: Terrorism Financing through Menial Legal Activities. 53 Typology 11: Use of Proxy to receive funds on Behalf of a Known Terrorist 54 Typology 12: Use of Affiliates to Crowdfund for Terrorist Activities. 56 3.4 TF Trends and Patterns 61 Chapter Four: Conclusion and Recommendations 64 4.1 Conclusion 64 4.2 Recommendations 65 4.2.1 Policy Makers 65 4.2.2 Law Enforcement Agencies. 66 4.2.3 Supervisory Authorities 67 4.2.4 Reporting Entities 68 4.2.5 Security Agencies. 68 Bibliography 70

Acknowledgments

We extend our profound gratitude to all those who contributed to the successful completion of this report on the assessment of Terrorism Financing typologies in Nigeria. We would like to express our heartfelt appreciation to the following agencies for their unwavering support and contributions to the project:

Defence Intelligence Agency (DIA)

Department of State Services (DSS)

Federal Ministry of Justice (FMOJ)

Nigerian Intelligence Agency (NIA)

Nigeria Police Force (NPF)

Nigeria Security and Civil Defence Corps (NSCDC)

Office of the National Security Adviser (ONSA)

We are grateful for their valuable insight and expertise in combatting the fight against Terrorism and Terrorism Financing in Nigeria, and for their commitment and synergy in developing this report. We are also grateful for their contributions and invaluable feedback, which helped to shape this report.

Finally, we acknowledge the contributions of our team members, whose tireless

efforts and dedication made this report possible. Their commitment to excellence and professionalism was exemplary, and we are grateful for their contributions to this project.

Thank you all for your support and contributions to this report on terrorism financing

typologies in Nigeria.

Modibbo R. HammanTukur

Director/CEO Nigerian Financial Intelligence Unit

List of Acronyms

ACA Anti-Corruption Agencies ACCOBIN Association of Chief Compliance Officers of Banks in Nigeria AQIM Al-Qaeda in the Islamic Maghreb BHT Boko Haram Terrorist CBN Central Bank of Nigeria CMOS Capital Market Operators DIA Defence Intelligence Agency DNFBPS Designated Non-Financial Businesses and Professions DSS Department of State Services EFCC Economic and Financial Crimes Commission FATF Financial Action Task Force FI Financial Institution FDI Foreign Direct Investment FMOJ Federal Ministry of Justice GIABA Inter-Governmental Action Group Against Money Laundering in West Africa GTI Global Terrorism Index IDP Internally Displaced Persons INTERPOL International Criminal Police Organization ІРОВ Indigenous People of Biafra ISIL Islamic State in Iraq and the Levant ISIS Islamic State of Iraq and Syria ISS Institute for Security Studies ISWAP Islamic State in West African Provence KFR Kidnapping for Ransom LEAS Law Enforcement Agencies ML Money Laundering NACTEST National Counter-Terrorism Strategy

NC North Central NCTC National Counter Terrorism Centre NE North East NFIU Nigerian Financial Intelligence Unit NIRA National Inherent Risk Assessment NPF Nigeria Police Force NSA National Security Adviser NSAA National Security Agencies Act NSCDC Nigeria Security and Civil Defence Corps NW North West ONSA Office of the National Security Adviser PEPS Politically Exposed Persons POS Point-of-sale Res Reporting Entities SAR Suspicious Activity Report SEC Securities and Exchange Commission SS South-South SSS State Security Service STR Suspicious Transaction Report SW South West TF Terrorist Financing TFS Targeted Financial Sanctions UN United Nations

Chapter One: Introduction

1.1 Background Terrorism financing is a global menace that poses a significant threat to security, hinders economic development, and undermines financial market stability. The role of finance in terrorism cannot be underestimated. Without a steady flow of funds, terrorist organizations would struggle to sustain their operations as they rely on financial resources to acquire weapons, equipment, supplies, and services. Additionally, funds are crucial for maintaining their camps, supporting their members, and planning & executing attacks.

In Nigeria, terrorism financing is a pressing concern that demands immediate

attention. This report aims to shed light on the different types of funding employed by terrorist organizations in the country by focusing on the emerging trends associated with the Islamic State in West African Province (ISWAP), Boko Haram Terrorist (BHT) activities prevalent in the northeastern region, and the Ansaru terrorist/Boko Haram groups that dominate the northwest and north-central regions. Furthermore, the report will discuss the activities of the Indigenous People of Biafra (IPOB), militant groups, and cultists that pose significant challenges in the southeastern, southern, and southwestern zones of Nigeria.

To effectively combat terrorism, it is of paramount importance to disrupt the flow of

funds to these organizations. While cutting off the source of terror financing may not entirely eradicate terrorism, it can significantly impact the frequency and scale of attacks carried out by these groups. The Nigerian government has made efforts to curb the activities of such groups through legislative measures, utilizing the law as a tool to address these security threats.

However, despite these efforts, more needs to be done to effectively sever the various

sources of finance available to terrorist organizations in Nigeria. This report highlights the urgency for stronger measures and strategies to combat terrorism financing, emphasizing the need for collaborative efforts between the government, financial institutions, and international partners. By implementing robust

mechanisms to detect and disrupt illicit financial activities, Nigeria can make

significant progress in dismantling the financial networks that sustain terrorism within its borders.

The Nigerian Inherent Risk Assessment (NIRA) of Terrorist Financing 2022 found

that terrorist groups such as the Islamic State in West African Province (ISWAP), Boko Haram (BH), Yan Bindiga, and Yan Tadda are most active in the Northern regions, specifically the North East, North West and North Central. In contrast, the Indigenous People of Biafra (IPOB) are primarily active in the South Eastern region. These groups operate in rugged terrain and across porous borders, aided by arms trafficking, illegal mining, poverty, unemployment, and extreme inequality. The report also notes that these groups exploit gaps in Nigeria's borders with Cameroon, Niger Republic, and Chad, where illegal cross-border activities related to Terrorism and Terrorist Financing (TF) occur. Furthermore, the report found that, in 2020 and 2021, about 1,527 and 2,600 people respectively were killed by bandits in the North Central region. Similarly, more than 35,000 people have been killed in northern Nigeria since 2009, when Boko Haram launched its insurgency aimed at overthrowing Nigeria's secular government. The group also established an Islamic state with at least 1.8 million internally displaced persons in Adamawa, Borno, and Yobe States. While it is difficult to quantify the value of terrorism financing, it is estimated that over N364million ransom payments were made to various bandit groups as well levies/taxies imposed on communities in one State in the North West between 2019 to 2021.

FATF Immediate Outcome 9 mandates countries to put measures in place and ensure

that terrorist financing offenses and activities are investigated and persons who finance terrorism are prosecuted and subject to effective, proportionate, and dissuasive sanctions. Hence, identifying, assessing, and understanding terrorist financing (TF) risks is an essential part of dismantling and disrupting terrorist networks.

Consistent with Immediate Outcome 9 of the FATF, findings of the 2nd Mutual

Evaluation Report of Nigeria 2021, and findings of the 2022 NIRA report of Terrorist Financing, the NFIU leverages its powers under the NFIU Act 2018 to, among others, analyse and make both proactive and reactive financial intelligence reports on TF promptly available to law enforcement, security, and intelligence agencies; monitor and undertake studies and risk assessments on emerging trends and patterns on the financing of terrorism; and advise the Government, Law enforcement and security agencies on the prevention of terrorism and terrorism financing.

1.2 Report Objectives

The study aims to achieve the following objectives:

i. Identify the various methods and techniques employed for terrorist financing in Nigeria.

ii. Identify relevant indicators and red flags to assist financial institutions and DNFBPs and VASPs in monitoring and reporting suspicious transactions related to terrorism financing

iii. Enhance the understanding of law enforcement and security agencies on the mechanisms used to finance terrorism

iv. Identify the current terrorism financing trends and patterns in Nigeria

V. Enhance the understanding of terrorism financing risks among reporting entities, particularly financial institutions (FIs) and designated non-financial businesses and professions (DNFBPs).

vi. Provide policy recommendations that will safeguard the financial system and populace against terrorist financing.

vii. Educate the general public on precautionary measures to mitigate the risk of terrorist financing.

1.3 Methodology

This typology study on terrorism financing in Nigeria is initiated by the Nigerian Financial Intelligence Unit (NFIU) with cooperative efforts between the NFIU and the relevant stakeholders in the country.

This is a qualitative research study that relied heavily on the use of secondary source

data from a team set up by the NFIU that engaged experts from the Defence Intelligence Agency (DIA), Department of State Service (DSS), Federal Ministry of Justice (FMOJ), National Intelligence Agency (NIA), Nigeria Police Force (NPF), Nigeria Security and Civil Defense Corps (NSCDC), and Office of the National Security Adviser (ONSA).

The team studied data and information collected from meetings with the above-

mentioned stakeholders, accessed case studies from the NFIU database and the database of stakeholders above. The report also relied on the results of extensive analysis of academic publications and open-source documents. In the course of the study, the NFIU held several meetings with the working group members where expert opinions were shared and harnessed to aid the study.

The limitations encountered by the team include a lack of timely response and, in

some cases, no response at all from stakeholders. Others are:

1.3.1 Incomplete Records: Some stakeholders provided records that were not

exhaustive, leading to the need for the team to rely on available secondary data to fill in the gaps.

1.3.2 Varied Data Standards: Different stakeholders had different standards and

formats for data, which made aggregation and analysis challenging.

1.3.3 Time Lags: Some of the most recent incidents or cases might not have been

fully documented or processed by the time of the study, leading to potential under-reporting of certain trends or events.

1.3.4 Unreported Cases: In a country as vast as Nigeria, not all incidents of terrorist

financing might be officially reported or documented. This could be due to fear, lack of awareness, or remoteness of certain areas.

1.3.5 Differing Interpretations: Given the nature of the topic, there were instances

where stakeholders had different interpretations or categorizations of certain events or activities, leading to potential discrepancies in data.

These data gaps, while acknowledged, were mitigated as much as possible through

triangulation of data sources, expert opinions, and thorough review processes. However, they highlight the need for ongoing studies and efforts to continually update and refine data on terrorist financing in Nigeria.

Chapter Two: Overview of Terrorist Financing in Nigeria, Legal and Institutional

Framework in the Fight Against Terrorist Financing in Nigeria.

This chapter provides an overview of the types of terrorist financing activities in

Nigeria, including the sources and methods of funding. The chapter also examines the laws and regulations specifically targeting terrorist financing in Nigeria. Finally, the chapter provides an overview of the institutional framework, the national strategies and the role of national and international organizations in the fight against terrorism and terrorism financing.

2.1 Terrorism Financing in Nigeria

Terrorist financing constitutes a significant threat to Nigeria's security, stability, and economic development. It is a means through which terrorist groups raise, move and utilize the financial resources needed to fund their activities, such as recruitment of new members, training, payment of stipends to their fighters and acquisition of weapons.

Similar to the activities of the terrorist groups, in developing this report, the team

also considered the possible operations of lone wolf actors in Nigeria. However, information provided by law enforcement agencies and other competent authorities indicates that no activity has been observed relating to lone wolf actors in Nigeria.

Links with International Terrorist Groups

Due to factors such as porous borders and proximity to countries with active terrorist groups, Nigeria is exposed to terrorism financing threats emanating from other jurisdictions.

Groups like Boko Haram are known to have received funding internationally from

foreign terrorist groups like Al-Qaeda in the Islamic Maghreb (AQIM) and the Islamic State in West Africa Province (ISWAP). In addition, terrorist groups in Nigeria derive

their funding from sympathizers, contributions from diaspora members as well as

sales of souvenirs and cryptocurrency donations as in the case of IPOB1.

As part of their funds generating drive, the group also request for motorcycles and

recharge cards from the families of kidnapped victims to aid their movement from one place to another and to recharge their phones to contact their targets respectively. The prevalent use of motorcycles by terrorists operating in the West African region has highlighted the exposure of the country to TF activities. A study has shown the high rate in which terrorists acquire motorcycles from Nigeria. For instance, a branch of IS Sahel currently based in northern Tillabéri, and one of the borders between Nigeria and Niger, is used for smuggling motorcycles and other goods to armed groups². This indicates the movement of funds by international terrorist groups and the utilization of such funds in Nigeria.

Highlighted herein are some typologies on a number of ways terrorist organisations

operating in Nigeria in the course of their illicit activities have received varying degrees of support internationally.

2.2 Types of Terrorism Financing in Nigeria

2.2.1 Fund Raising Terrorist organizations have access to a wide range of funding sources including legal and illegal channels, making it difficult to track their financial activities. Unlike money laundering, which relies on illegally obtained assets, terrorist financing does not solely depend on such resources. Things become even more complex when funds come from legitimate sources, as it is challenging to establish the illegal intent of their activities³. In Nigeria, terrorist groups have been known to obtain funding from 1https://www.nfiu.gov.ng/Home/DownloadFile?filePath=C%3A%5CNFIU%5Cwwwroot%5Cdocuments%5CNTR- O(_N8CTXF 2 Eleanor Beavor, 2023. Motorbikes and armed groups in the Sahel: Anatomy of a Regional Market. Switzerland: Global Initiative Against Transnational Organized Crime. 3 Teichmann, F. M. J. (2019, May 7). Financing of terrorism through the banking system. Journal of Money Laundering Control, 22(2), 188–194. https://doi.org/10.1108/jmlc-07-2017-0026

local and external sources, including sympathizers, and criminal activities4. GIABA's

2020 Assessment of Counter-Terrorist Financing Capacities in West Africa identified seven ways terrorist groups raise funds in Nigeria including extortion, begging, smuggling, violent robbery, human trafficking, protection fees, and kidnapping for ransom, particularly by the ANSARU group. They also sell gold jewelry and precious metals obtained through raids, engage in livestock rustling, and abuse non-profit organizations, among other methods. They also sell seized land acquired through raids, engage in the transportation business, and trade in kola nuts and dry fish to raise money for their operations.

These extremist groups also engage in extortion and protection rackets as a means of

financing their activities. These groups often target local businesses, government officials and individuals, demanding regular payments in exchange for protection or refraining from violence. This creates an environment of fear and coercion, enabling terrorists to maintain a steady flow of funds. In the Lake Chad region for example, insurgents have tapped into this source, establishing control over major trade routes, fishing communities, and regional networks5. The income generated through these ventures, which include farming and trade, is estimated to be in the millions of dollars annually (Tijani et al., 2014, Institute for Security Studies, 2019). Even in areas under the control of recognized authorities, the civilian population often finds itself coerced into remitting taxes to insurgent groups as a means of guaranteeing their safety. This forced taxation further solidifies the financial base of these terrorist organizations, lending them an air of legitimacy in the process6. Inhabitants residing in areas where the population has been infiltrated by terrorist find themselves 4 Onuh, P. A., Obiefuna, A. S., Nnaji, D. I., & A. Ifem, L. (2021, January 1). Engagement in licit ventures by terrorist organisations and terrorism financing in the Lake Chad region. Cogent Social Sciences, 7(1). https://doi.org/10.1080/23311886.2021.1920708 5 Salkida, A. (April 26, 2020). How Boko Haram sustains operations through international trade in smoked fish. Humangle. Retrieved October 25, 2020, from https:// humangle.ng/how-boko-haram-sustains-operations-through- international-trade-in-smoked-fish/ 6 Onuh, P. A., Obiefuna, A. S., Nnaji, D. I., & A. Ifem, L. (2021, January 1). Engagement in licit ventures by terrorist organisations and terrorism financing in the Lake Chad region. Cogent Social Sciences, 7(1). https://doi.org/10.1080/23311886.2021.1920708

entrapped in a paradoxical predicament. They are faced with the potential threat of

violent retaliation from the militant group if they refuse to financially support them or disclose their activities to the authorities. Conversely, if they capitulate to compulsory levies imposed by the bandits or engage in work for them, they can be readily accused of sponsoring terrorism, an offense severely penalized under Nigerian law. This situation significantly contributes to the bandits' accumulation of multi- million-dollar illicit taxation7.

Additionally, insurgents, especially in the Lake Chad region, have also instituted

microfinance schemes for local residents, particularly young people, to aid their participation in farming and other economic pursuits. This provision of micro-credit serves a twofold purpose. On one hand, it allows insurgents to accrue interests on the loans provided, while also gaining additional proceeds related to security and farmland access provisions collected post-harvests8. Furthermore, these schemes secure loyalty among the local residents and facilitate the ease of recruiting fighters, strengthening the insurgents' influence and manpower in the region. Beyond financial services, the insurgents also provide other amenities such as clean water, sanitation facilities, health care, and Islamic education9.

Similarly, illicit trade and smuggling of goods such as drugs, arms and contraband

provide another significant source of revenue for terrorist organizations in the country. These groups often exploit porous borders to facilitate the movement of illegal goods across the region, generating substantial profits. The Islamic State's West Africa Province (ISWAP) has seized the opportunity to establish trade routes 7 Adeyemi Ibrahim. Ibrahim. (2022, October). Merchants Of Terror (1): Paying blood taxes, helpless communities sustain Nigeria's terrorists. PREMIUM TIMES. Retrieved March 28, 2023, from https://www.premiumtimesng.com/news/headlines/557418-merchants-of-terror-1-paying-blood-taxes-helpless- communities-sustain-nigerias-terrorists.html?tztc=1 8 International Crisis Group (2014). Curbing violence in Nigeria (II): the Boko Haram insurgency. Retrieved October 16, 2020, from https://www.ecoi.net/en/file/local/1091608/1226_1396951718_216-curbing-violence-in-nigeria-ii- the-boko-haram-insurgency.pdf 9 Institute for Security Studies (2019). Economics of terrorism in Lake Chad Basin. Retrieved October 24, 2020, from https://issafrica.org/amp/iss-

and furnish security for local farmers, fishers, and traders. The Institute for Security

Studies (2019) notes that even waged laborers are returning to contribute to the ISWAP-controlled economy. Livestock farmers find security in ISWAP's justice system, which metes out punishments for any transgressions against non-compliant civilians, even if the offenders are their own fighters (International Crisis Group, 2019). Herders pay a fee proportional to their livestock count. Specifically, for every 30 cows, one fully grown cow is given in exchange for a six-month guarantee of security and access to fertile pastures, a system known as Hedaya10 .

Recent development revealed renewed investment drive by terrorists specifically the

Islamic State of West Africa Province (ISWAP) in the real estate sector. This follows the directive of the head of province of ISWAP on the need for financial independence of IS- Province through boosting locally generated revenue amidst paucity of funds at the center. This directive translates to aggressive investment by the group in real estate, landed properties and farm houses. The motive is to create a legitimate front for the group where illicit funds will be laundered undetected.

Raising of terrorist funds can be classified into the following groups and categories11.

Group Subcategory Willing donors • Individuals (including foreign terrorist fighters and lone wolves) • Businesses • Non-profit organizations, charities, and associations Sale of goods and services • Legal products and services • Illegal products and services 10 Salkida, A. (April 26, 2020). How Boko Haram sustains operations through international trade in smoked fish. Humangle. Retrieved October 25, 2020, from https:// humangle.ng/how-boko-haram-sustains-operations-through- international-trade-in-smoked-fish/ 11 El Khoury, Chady, ed. 2023. Countering the Financing of Terrorism: Good Practices to Enhance Effectiveness. Washington, DC: International Monetary Fund.

Criminal activity Crimes • Committed by terrorists • Crimes committed by others Unwilling or defrauded donors • Individuals • Businesses • Non-profit organizations, charities, and associations Most of the categories and subcategories highlighted above are utilized by terrorist and their financiers in Nigeria. Terrorist organizations often resort to various criminal activities for funding, including ransom kidnappings, bank robberies, and imposition of taxes in areas they control. kidnapping for ransom has become one of the most prevalent methods of terrorist financing in Nigeria. The extremist groups, such as Boko Haram, Islamic State in West Africa Province (ISWAP), The Indigenous People of Biafra (IPOB) and other criminal gangs, abduct individuals, including high- profile targets and foreign nationals, and demand ransoms for their release12 . These ransom payments provide a steady stream of income for terrorist organizations, enabling them to fund their operations, recruit new members, and purchase weapons and supplies. A study revealed that Nigerians paid approximately 18.34 million dollars in ransoms from 2011 to 2020. In the first half of 2021 alone, with 2,371 kidnappings, ransom demands reached an estimated 23.84 million dollars. The African Centre for Constructive Resolution of Conflict (ACCORD) has noted that multiple terrorist organizations have pivoted towards abduction as a significant source of funding13. 12 Daily Trust (2021), "They are terrorists, not bandits", Jul 26, 2021, pp. 1-16. 13 The Authority. (2023, February). Terrorism Financing and CBN's Cash Limitation Policy in Nigeria. The Authority. Authority. Retrieved March 28, 2023, from https://authorityngr.com/2023/02/20/terrorism-financing-and-cbns- cash-limitation-policy-in-nigeria-2/

2.2.2 Movement of Terrorist Funds

Terrorist groups in Nigeria use various methods to finance their activities. This financing may be licit or illicit, may be in huge amounts or smaller amounts to transfer and receive funds. These methods may include cross-border cash smuggling via illegal bureau de change and other cash couriers14. Hawala, a traditional informal system of transferring funds without the use of banks, is widely used by terrorist groups in Nigeria to move funds across borders. Cash smuggling is another method used by terrorists to transfer funds, where cash is physically transported across borders. Front companies are also used to disguise the source of funding and to transfer funds to terrorist groups.

Virtual assets are also used to finance terrorist activities. The attributes of anonymity

and privacy inherent in the cryptocurrency system are what draw individuals, particularly those with illicit intentions, towards its use. The complete decentralization of cryptocurrency offers its own advantages of security and convenience for entities involved in activities such as drug trafficking, arms dealing, terrorist activities, money laundering, tax evasion, among others15. In the Nigerian context, the use of cryptocurrency is notably prevalent among IPOB. However, while IPOB has been observed to leverage cryptocurrency for their operations, it's essential to recognize that the appeal of cryptocurrency's attributes could make it a potential tool for other terrorist groups as well. Its decentralized nature and the anonymity it offer can be attractive for any group looking to raise funds discreetly.

Moving funds for terrorist financing can be domestic transfer, international transfers

through other jurisdictions (as transit countries), and directed movement from one jurisdiction to another (without going through another country). Movement of funds can also be made using the formal financial sector, the informal financial sector or 14 Maza, K.D., Koldas, U. and Aksit, S. (2020), “Challenges of combating terrorist financing in the Lake Chad Region: a case of Boko Haram", SAGE Open, pp. 1-17, doi: 10.1177/2158244020934494. 15 Majumder, A., Routh, M., & Singha, D. (2019, April 30). A Conceptual Study on the Emergence of Cryptocurrency Economy and Its Nexus with Terrorism Financing. The Impact of Global Terrorism on Economic and Political Development, 125-138. https://doi.org/10.1108/978-1-78769-919-920191012

through domestic trade, international trade, movement of cash or physical assets and

smuggling of cash or physical assets.16

2.2.3 Utilization of Terrorist Funds

Finance is an essential enabler for terrorist organizations such as Boko Haram, Ansaru, Islamic State West Africa and IPOB facilitating the procurement of weapons, food, training, and incentives for their fighters. Broadly speaking, utilization is the ultimate goal in the terrorism financing chain (raising, moving and utilizing). This is in view of the fact that, without the funds, the aim of the terrorists cannot be achieved. Thus, it is important to study and understand what the funds are used for as this will give insight on countering the financing of terrorism and terrorism itself.

It is worth noting that, in some cases, for instance, kidnapping, the raising process

coincides with the utilization process. This is considering the fact that kidnapping is means through which terrorists raise funds. But, also, funds earlier raised are used to fund kidnapping processes.

This study has observed that raising of funds is not limited to raising for commission

of terrorism acts but also other purposes, for instance, settling widows and families of dead members, purchase of luxury items, etc.

The proceeds of crime generated by ISWAP are largely deployed into the procurement

of arms and ammunition in furtherance of their illicit activities. The arms and ammunition are procured by arms merchant from the popular fish market in Libya between N400,000 to N500,000 for AK47. Consequently, they are concealed in trucks and transported by couriers through Cameroon, Chad and Niger Republics. 16 El Khoury, Chady, ed. 2023. Countering the Financing of Terrorism: Good Practices to Enhance Effectiveness. Washington, DC: International Monetary Fund

2.3 Legal Framework in the Fight against Terrorist Financing in Nigeria

Terrorist financing remains a critical challenge to Nigeria's national security and stability. With groups such as Boko Haram, the Islamic State in West Africa (ISWAP), Indigenous People of Biafra (IPOB), Yan Bindiga, and Yan Ta’adda operating within the country, Nigeria has experienced significant human and economic losses. As terrorist organizations rely on financial resources to maintain and expand their operations, understanding and addressing the legal and regulatory frameworks that target terrorist financing is crucial.

Nigeria has taken various steps to combat terrorist financing with key legal and

regulatory frameworks designed to prevent, detect, and prosecute such activities. Below is an overview of these frameworks:

2.3.1 Terrorism (Prevention and Prohibition) Act, 2022:

This Act criminalizes acts of terrorism and the financing of terrorism. It empowers law enforcement agencies to investigate, arrest, and prosecute individuals or entities involved in terrorist financing. The Act also provides for the freezing and forfeiture of assets linked to terrorism and terrorism financing. The Act makes robust provisions on the powers of law enforcement agencies and the powers of the Nigeria Sanctions Committee to identify and designate groups, individuals and entities as terrorists.

2.3.2 Money Laundering (Prevention and Prohibition) Act, 2022:

This Act criminalizes terrorist financing as a predicate offence to money laundering. It mandates financial institutions and DNFBPs to undertake robust customer due diligence measures, maintain records of transactions, and report suspicious activities to the relevant authorities when there is a suspicion of