The Nigerian Financial Intelligence Unit (NFIU) has issued a warning over suspicious transactions totaling N48 billion transferred from Nigerian banks to Dubai and Hong Kong between January 2021 and September 2024.

According to a recently released NFIU report, 401 suspicious transaction reports (STRs) were linked to both regions during this period, with Dubai accounting for the larger share of the funds despite fewer transactions.

A detailed breakdown of the report shows that 185 STRs connected to Dubai amounted to N29.6 billion, while 216 STRs traced to Hong Kong were valued at N18.6 billion.

The report highlights a dramatic increase in suspicious transactions over the three-year period. In 2021, only two STRs valued at N42 million were reported. By 2024, this figure had skyrocketed to 202 STRs with a combined value of N32 billion.

Regulatory Loopholes and Shell Companies

The NFIU attributed this alarming trend to several factors, including complex regulatory loopholes, the proliferation of shell companies and offshore accounts, and weak enforcement mechanisms in both Dubai and Hong Kong.

In response to these findings, the intelligence unit has issued a strong warning to Nigerian financial institutions, urging them to enhance their due diligence processes to prevent potential money laundering and terrorist financing activities.

"The NFIU finds it pertinent to issue this advisory to relevant stakeholders to employ enhanced due diligence in the detection, deterrence, and prevention of abuse of the financial system through these hotspots," the report stated.

The agency warned that Nigeria could be plunged into a financial crisis if the situation is left unchecked, emphasizing the critical importance of reporting suspicious transactions and activities flowing from these jurisdictions.

"Reporting suspicious transactions and activities flowing from these jurisdictions is critical to protecting the Nigerian financial system and contributing to the global fight against money laundering, terrorist financing, and proliferation financing," the NFIU added.

This warning comes at a time when Nigeria's financial sector is already facing significant challenges, including currency volatility and regulatory scrutiny. Financial experts have noted that strengthening anti-money laundering frameworks is essential for maintaining the integrity of Nigeria's banking system and its standing in the international financial community.