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Capital Flight and the Politics of Betrayal: When Leaders Stop Believing in Their Own Economy

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Capital Flight and the Politics of Betrayal: When Leaders Stop Believing in Their Own Economy

BY BLAISE UDUNZE

 

 

 

Nigeria’s economy is bleeding, not from the absence of money, but from the silent, systemic outflow of capital that should be building industries, creating jobs, and stimulating innovation. Instead, wealth is fleeing into the vaults of local banks, offshore accounts, and speculative government instruments that promise easy returns but deliver little to the real economy.

 

 

 

This quiet drain known as capital flight has become one of Nigeria’s most understated yet devastating economic tragedies. It reflects not only a lack of investor confidence but also the failure of the banking and financial ecosystem to function as a true engine of growth. The role of banks in any healthy economy is to mobilize deposits, lend to productive sectors, and finance businesses that create value. Yet, in Nigeria, this cycle has broken down.

 

 

 

The country’s major banks, flush with liquidity, increasingly prefer to invest in risk-free government securities rather than lend to manufacturers, farmers, or entrepreneurs. The ease of earning double-digit interest from government bonds has turned banks into passive rent collectors rather than drivers of development. This behavior represents a form of internal capital flight with money technically within the system but practically locked away from the economy’s productive veins.

 

 

 

Beyond domestic hoarding, Nigeria faces a more pernicious form of external capital flight. Each year, billions of dollars exit the country through legal and illicit channels, draining investment, depleting foreign reserves, and eroding confidence in the nation’s economic future. Government and independent estimates suggest that Nigeria loses between $17 billion and $18 billion annually through illicit financial flows (IFFs), roughly 20 percent of the $88.6 billion that Africa collectively loses each year. That amount could have built schools, hospitals, and industries capable of employing millions.

 

 

 

The story of capital flight from Nigeria is not merely an economic tragedy; it is a moral one, the tale of a nation betrayed by its own custodians and courted by foreign accomplices who profit from its dysfunction.

 

 

 

Nigeria’s political elite have long mastered the art of wealth extraction. Through inflated contracts, misappropriated public funds, and dubious foreign investments, billions leave the country yearly. Yet, for many politicians, local investment is a risk they refuse to take. Their mansions rise in Dubai, London, and New York while their home constituencies languish in neglect. From shell companies in the British Virgin Islands to luxury real estate in the UAE, Nigerian politicians have woven a global web of concealed wealth shielded by secrecy jurisdictions and weak local enforcement. The irony is stark, as those who control Nigeria’s wealth have no faith in the economy they manage. Their lack of confidence in their own governance is perhaps the strongest indictment of their rule.

 

 

 

The aristocracy and business elite are not blameless. Nigeria’s high society, traditional rulers, business moguls, and political patrons have continued to move funds abroad under the guise of “diversification” or “investment security.” In reality, it is the same cycle of extraction and expatriation, where profits earned from domestic monopolies or state patronage are rarely reinvested at home. Instead, they are laundered into foreign banks, luxury assets, and offshore trusts. This unrestrained financial migration deprives the nation of growth capital and erodes public confidence, reinforcing a psychological colonization with the belief that nothing of value can thrive in Nigeria.

 

 

 

The problem, however, is not purely internal. Foreign corporations and their local collaborators play a significant role through aggressive tax avoidance and profit repatriation schemes. By exploiting loopholes in Nigeria’s weak fiscal systems, multinationals shift profits to low-tax jurisdictions, a process known as transfer pricing, which is draining billions from the economy each year. To make matters worse, global consulting and legal firms help structure these outflows, acting as enablers of corruption while hiding behind the veil of legality.

 

 

 

Capital flight thrives where institutions are weak. Agencies such as the Central Bank of Nigeria (CBN), the Nigerian Financial Intelligence Unit (NFIU), and the Economic and Financial Crimes Commission (EFCC) operate under immense political pressure. Investigations into politically exposed persons are often selective, and prosecutions drag endlessly. Meanwhile, banks (both local and foreign) play the silent role of facilitators, processing questionable transactions with minimal scrutiny. The result is a perfect ecosystem for looting by powerful politicians, complicit banks, pliant regulators, and eager foreign beneficiaries.

 

 

 

The effects are devastating. Capital flight undermines foreign exchange stability, weakens the naira, and starves industries of investment. When billions are left unchecked, the government resorts to borrowing, increasing national debt and mortgaging the country’s future. Nigeria’s public debt now stands at N149.39 trillion, with debt servicing consuming over 70 percent of government revenue. Inflation remains stubbornly high at 20.12 percent as of August 2025, while food inflation stands at 21.87 percent. Unemployment, officially at 5 percent, is far worse in reality, with underemployment and informal work masking widespread joblessness.

 

 

 

One overlooked driver of this crisis is Nigeria’s weak respect for property rights, which is the very foundation of investor confidence. In September 2025, the Lagos State government demolished over 19 buildings in the Trade Fair Complex, Ojo, citing permit violations. But beyond regulatory enforcement, the event exposed a deeper issue: inconsistent governance, opaque processes, and disregard for ownership that fuels distrust and drives capital offshore. When investors are uncertain that their assets are safe from arbitrary government action, they simply take their money elsewhere.

 

 

 

Multiple taxation, inconsistent policies, and weak monitoring of illicit flows further complicate the picture. Businesses face overlapping levies from different tiers of government, pushing many to conceal income or move operations abroad. Civil society estimates that over $18 billion is lost annually through illicit flows. This is a drain that robs Nigeria of the fiscal capacity to fund schools, hospitals, and roads.

 

 

 

Ultimately, the story of capital flight is one of moral and institutional decay. It reveals a political class that preaches patriotism while stashing wealth abroad, a banking system that serves itself rather than the economy, and a foreign financial order that profits from Nigeria’s dysfunction.

 

 

 

Reversing this pattern requires a national reorientation, one that goes beyond slogans to enforce accountability and rebuild trust. Nigeria must strengthen asset recovery frameworks, enforce beneficial ownership registries, and enhance cooperation with countries that host stolen wealth. Western nations, too, must shut down the safe havens that shelter looted funds; they cannot condemn corruption abroad while their financial systems profit from it.

 

 

 

More importantly, Nigeria’s leaders must recognize a simple truth that no nation develops by exporting its capital and importing its luxuries. Development is sustained by faith, the faith of a people who believe enough in their land to invest in it.

 

 

 

Capital flight is not merely an economic statistic; it is the reflection of a broken covenant between Nigeria and its leaders. The wealth that should build the nation has become the currency of betrayal. Until the ruling class and their foreign accomplices are held accountable, Nigeria will remain a country of immense potential shackled by the greed of its own custodians.

 

 

 

Blaise, a journalist and PR professional writes from Lagos, can be reached via: [email protected]

 

 

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Kogi’s Quiet Shift: Reviewing Governor Ododo’s First 24 Months in Office 

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Kogi’s Quiet Shift: Reviewing Governor Ododo’s First 24 Months in Office

By Rowland Olonishuwa 

 

On Tuesday, Kogi State paused to mark two years since Alhaji Ahmed Usman Ododo took the oath as Executive Governor. Across government circles, community halls, and everyday conversations, the anniversary was more than a date on the calendar; it was a milestone that invites both reflection and renewed optimism. A moment to look back at how far the state has travelled in just twenty-four months, and where it is heading next.

 

Since assuming office in January 2024, Ododo has steered the state through a period of measured consolidation, delivering strategic interventions across security, infrastructure, human capital, and economic revitalisation that are beginning to translate into real improvements for residents.

 

Governor Ododo stepped into office at a time when expectations were high, and confidence in public institutions needed rebuilding.

 

His response to these was not loud declarations, but steady consolidation, strengthening structures, restoring order in governance, and setting a clear direction. Over time, that calm approach has become his signature: leadership that listens first, plans carefully, and moves with purpose.

 

Security has remained the most urgent concern for Nigerians, and Kogi residents are no exceptions; the Ododo-led administration has treated it as such. From deploying surveillance drones to support intelligence operations to recruiting and integrating local hunters and vigilante personnel into formal security frameworks, the government has built a layered safety net.

 

For farmers returning to their fields, travellers moving along highways, and families in rural communities, the impact is simple and deeply personal: fewer fears, quicker response, and growing confidence that the government is present and concerned about the ordinary people.

 

Infrastructural development has followed the same practical logic. Roads have been rehabilitated, easing movement for traders and commuters. Budget priorities have shifted toward capital projects and human development, while revived facilities like the Confluence Rice Mill now provide farmers with real economic opportunity. For many households, this means better income prospects, stronger local trade, and renewed belief that development is no longer a distant promise.

 

Health and education are not left out; the Ododo-led administration has expanded free healthcare services and supported students through examination funding and institutional improvements.

Parents who once struggled with medical bills and school fees have felt relief. Young people preparing for their futures now see government investment not as abstract policy but as something that touches their daily lives.

 

Governance reforms, from civil service strengthening to new legislative frameworks, have quietly improved how government functions. Salaries are more predictable, public offices are more responsive, and local government structures are more coordinated. These may not always make headlines, but they shape how citizens experience leadership every day.

 

As the second year anniversary celebrations fade into routine today and Governor Ododo enters his third year in office, the true meaning of the anniversary will continue to linger on.

 

Two years may not have solved every challenge in the Confluence State -no government ever does, by the way- but they have set a tone of stability, responsiveness, and direction. The next phase will demand deeper impact, broader reach, and sustained security gains.

 

But for many in Kogi State, the story of the past twenty-four months is already clear: steady hands on the wheel, and a journey that is firmly underway.

 

 

 

Olonishuwa is the Editor-in-Chief of Newshubmag.com. He writes from Ilorin

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Lagos Assembly Debunks Abuja House Rumour, Warns Against Election Season Propaganda

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Lagos Assembly Debunks Abuja House Rumour, Warns Against Election Season Propaganda

 

 

The Lagos State House of Assembly has described as misleading and mischievous the widespread misinformation that it budgeted for the purchase of houses in Abuja for its members in the 2026 Appropriation Law.

 

This rebuttal is contained in a statement jointly signed by Hon. Stephen Ogundipe, Chairman, House Committee on Information, Strategy, and Security, and Hon. Sa’ad Olumoh, Chairman, House Committee on Economic Planning and Budget.

Describing the report as a deliberate and disturbing falsehood being peddled by patently ignorant people, the statement reads, “There is no provision whatsoever in the 2026 Budget for the purchase of houses in Abuja or anywhere else for members of the Lagos State House of Assembly. The report is a complete fabrication and a product of political mischief intended to misinform the public.

“The Lagos State House of Assembly does not operate in Abuja. Our constitutional responsibilities, constituencies, and legislative duties are entirely within Lagos State. It is, therefore, illogical, irrational, and irresponsible for anyone to suggest that legislators would appropriate public funds for personal housing outside their jurisdiction.”

The statement emphasised that the budget is already in the public domain and accessible for scrutiny by discerning Lagosians and Nigerians alike. It reiterated that the Lagos State Government operates a transparent budget that speaks to the needs of the people and the demands of a megalopolis.

“We view this rumour as part of a wider attempt at election-season propaganda, designed to erode public trust, sow discord, and malign democratic institutions.”

The chairmen further clarified that the 2026 capital expenditure of the House of Assembly is less than 0.04% of the total CAPEX of the state, which clearly demonstrates the culture of prudence, accountability, and fiscal responsibility that guides the legislature. However, they noted, “Historically, the House does not even access up to its approved budget in many fiscal years.”

They stressed that the Assembly remains fully committed to excellence, transparency, good governance, and the collective welfare of the people of Lagos State, in line with the objectives of the 2026 Budget of Shared Prosperity.

“We therefore challenge those behind this harebrained allegation to produce credible evidence or retract their statements forthwith. Failure to do so may attract appropriate legal actions.

“We urge Lagosians and the general public to disregard this baseless rumour and always verify information from official and credible sources.”

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Democracy in the Crosshairs: How Nigeria’s Ruling APC Weaponises Power and Silences Dissent

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Democracy in the Crosshairs: How Nigeria’s Ruling APC Weaponises Power and Silences Dissent.

By George Omagbemi Sylvester | Published by saharaweeklyng.com

“Tinubu’s Government, the EFCC and the Strategic Undermining of Opposition Governors”.

 

In a striking indictment of Nigeria’s current political reality, Governor Seyi Makinde of Oyo State declared that “you cannot speak truth to power in this dispensation”, directly accusing the administration of President Bola Ahmed Tinubu of intolerance for dissent and an erosion of democratic norms.

Makinde’s remarks (made during a public event in Ibadan on January 25, 2026) were more than a local governor’s lament. They crystallised a mounting national frustration: that Nigeria’s political landscape has tilted dangerously toward executive overreach, institutional capture and political engineering.

Democracy in the Crosshairs: How Nigeria’s Ruling APC Weaponises Power and Silences Dissent.
By George Omagbemi Sylvester | Published by saharaweeklyng.com

This narrative is not isolated. Across Nigeria, governors from opposition parties have defected to the ruling All Progressives Congress (APC) in numbers unprecedented in the nation’s democratic history. Critics argue that these defections are not merely voluntary political choices, but part of a strategic pressure campaign leveraging federal power and institutions to fracture opposition influence.

At its centre lies Nigeria’s principal anti-graft agency – the Economic and Financial Crimes Commission (EFCC).

The EFCC: Anti-Graft Agency or Political Instrument? Founded to combat corruption, the EFCC’s constitutional mandate is to investigate and prosecute financial and economic crimes across public and private sectors. Its legal independence is enshrined in statute and it has historically pursued high-profile cases, including recovery of nearly $500 million in illicit assets in a single year, demonstrating its capacity for tackling corruption.

 

However, critics now claim that under the Tinubu administration, the EFCC’s prosecutorial power is being perceived (if not deployed) as a political instrument.

Opposition leaders, including former Vice President Atiku Abubakar and coalition parties such as the African Democratic Congress (ADC), have publicly accused the federal government of using anti-corruption agencies to intimidate opposition figures and governors, effectively pressuring them into aligning with the APC.

In a statement released in December 2025, opposition figures alleged that institutions such as the EFCC, the Nigerian Police and the Independent Corrupt Practices and Other Related Offences Commission were being selectively wielded to weaken political competitors rather than combat financial crime impartially.

This is not merely rhetorical noise. The opposition’s grievances centre on several observable patterns:

Reopened or New Investigations Against Opposition Figures: The ADC pointed to recent abnormal reactivation of long-dormant cases or new inquiries into financial activities involving senior opposition politicians. These, they argue, often arise shortly before critical elections or political realignments.

 

Alleged Differential Treatment: According to opponents of the current administration, individuals who have defected to the APC appear less likely to face sustained legal scrutiny or prosecution in EFCC proceedings, even in cases of credible allegations of mismanagement.

Timing of Actions: The timing of certain high-profile investigations, emerging ahead of the 2027 general elections, reinforces perceptions that anti-graft measures are tailored to political cycles rather than legal merit.

The EFCC and Presidency have publicly denied these allegations, insisting that the commission operates independently and pursues corruption irrespective of political affiliation and that Nigeria’s democratic freedoms (including party choice and mobility) remain intact.

Yet the perception of bias, once systemic, is hard to erase, especially when political actors deploy powerful state machinery with strategic timing and selective intensity.

Defections and Power Realignment: A Democracy at Risk? Since 2023 and particularly through 2025, a remarkable number of state governors and senior political leaders have crossed over from opposition parties (notably the Peoples Democratic Party – PDP) to the APC. Though defections are normal in Nigeria’s fluid political system, the scale and speed in recent years are historically noteworthy, raising critical questions about underlying incentives.

The SaharaWeeklyNG reported Makinde’s comments within the broader context of a political climate where dissenting voices face greater obstacles than at any time in recent democratic memory.

Governors who remain in opposition find themselves squeezed between growing federal assertiveness and dwindling political capital. Some analysts argue that the combination of federal resource control, political appointments and influence over public agencies exerts tangible pressure on subnational leaders to align with the ruling party for political survival. This dynamic, they contend, undermines competitive party politics and weakens Nigeria’s multiparty democracy.

 

Speaking Truth to Power: What Makinde’s Critique Exposes. Governor Makinde’s core grievance (that it is increasingly difficult, perhaps perilous, to speak truth to power) resonates widely among civil society actors, political analysts and democratic advocates:

“YOU CANNOT SPEAK TRUTH TO POWER IN THIS DISPENSATION,” Makinde declared, specifically citing the government’s handling of contentious tax reform bills as an example where dissent was neither welcomed nor transparently debated.

Makinde’s critique reflects deeper structural concerns:

Exclusion of Key Stakeholders: Opposition leaders and state executives report being marginalised from meaningful consultation on national policies affecting federal-state relations, revenue sharing and fiscal reforms.

Institutional Intimidation: The perception that state politicians become targets of federal legal scrutiny after taking firm oppositional stances (real or perceived) discourages robust democratic debate.

Erosion of Opposition Space: A symbiotic effect of party defections and institutional pressure is a shrinking viable space for genuine political opposition, weakening checks and balances essential to democratic governance.

A respected political scientist, Dr. Aisha Bello of the University of Lagos, recently argued that “when opposition becomes fraught with state leverage instead of ideological competition, the very foundation of democratic contestation collapses,” adding that “a government that shies away from criticism risks inversion into autocracy.”

Another expert, Prof. Chinedu Eze, former dean of political studies at Ahmadu Bello University, warned that “selective use of anti-corruption agencies as political tools corrodes public trust and ultimately delegates justice into the hands of incumbents rather than independent courts.” These observations echo growing public skepticism.

The Way Forward: Strengthening Democracy and Institutions. Nigeria’s path forward depends on restoring confidence in democratic norms and institutional independence.

Transparent EFCC Processes: Civil society groups and legal scholars are advocating for enhanced transparency in anti-graft investigations, including clear prosecutorial thresholds and independent audits of case initiation and closures.

Judicial Oversight: Strengthening the judiciary’s capacity and independence is critical to ensuring that allegations of political weaponisation do not go unchecked. Courts must remain the ultimate arbiters of evidence and guilt.

Political Reforms: Advocates demand reforms to party financing, federal-state fiscal relations, and consultation mechanisms to reduce incentives for defections driven by federal resource leverage.

Public Engagement: A more informed and engaged civil society, anchored by independent media and civic education, must hold both government and opposition accountable for adherence to democratic principles.

Beyond The Present Moment.

Governor Makinde’s assertion that it is no longer tenable to “speak truth to power” under the current administration reflects unsettling trends in Nigeria’s evolving democratic landscape. While the EFCC and the Presidency maintain that anti-corruption efforts are independent and constitutionally grounded, opposition leaders (backed by political data and patterns of defections) argue that state power is being used to consolidate one-party dominance and undermine political pluralism.

At this critical juncture, Nigeria must choose between entrenching competitive democracy or sliding toward a political monopoly where dissent is subdued, institutions compromised, and power concentrated.

For Nigeria’s democratic ideals to survive (and thrive) its leaders and citizens must ensure that speaking truth to power remains not a perilous act of defiance but an honoured pillar of national life.

 

Democracy in the Crosshairs: How Nigeria’s Ruling APC Weaponises Power and Silences Dissent.
By George Omagbemi Sylvester | Published by saharaweeklyng.com

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