Strengthening financial integrity in Nigeria: the national identification harmonization project

Abstract

Purpose

Nigeria needs to improve its national identification coverage to support improved anti-money laundering and combating of financing of terrorism and proliferation (AML/CFT) measures. This study aims to examine its ongoing identification harmonization project, which seeks to create a central database for digital identification across designated entities. It identifies the key stakeholders in the project, progress to date as well as key challenges, especially relating to the inclusivity and privacy and data protection concerns of the current scheme to provide national identification numbers.

Design/methodology/approach

The authors apply a doctrinal research methodology and use the Principles on Identification for Sustainable Development to identify and reflect on key challenges.

Findings

The national identification harmonization project and the ongoing drive to register National Identity Numbers for Nigerians could provide valuable support for more effective and efficient AML/CFT identity verification and authentication. The project and processes, however, hold significant risks in relation to data protection. These are exacerbated by the absence of a comprehensive data protection framework. National identity data can be vulnerable to political abuse and targeting by bad actors. National identity data systems must, therefore, be protected by clear, fair and comprehensive privacy and data protection rules and appropriate and accountable governance mechanisms. While Nigeria is adopting and implementing the relevant framework, the NIMC can do more to advance data protection by supporting informed consent and compliance by all participants and publishing this information to build public trust in the system. It can also be disciplined about only collecting minimal and necessary personal data and printing only basic personal details such as name and age on the general multi-purpose ID card. The NIMC should furthermore improve access to the national identification number by streamlining the process of registration, including supporting same day registration and on-the-spot card printing; setting up more registration points as well as mobile registration to cut down queues; and increasing the range of registration agents and points to include schools, police stations and health facilities. Consideration for social, cultural and religious norms is also vital to appropriately accommodate the variety of groups and cultures in Nigeria.

Research limitations/implications

Research materials include government policy documents as well as newspaper articles and reports on more recent developments and experiences that are not yet reflected in more formal documents. The research materials, however, reflect both the intention of the government and the reported experiences of those registering for a National Identification Number.

Practical implications

This study identifies the practical steps that can be taken to enhance data protection and increase the inclusivity of the measures to provide Nigerians with National Identification Numbers.

Social implications

The recommendations that are made are aimed at increasing the inclusivity of the National Identification Number scheme and at providing improved protection of personal data of applicants for, and holders of, these numbers.

Originality/value

This study contributes to the policy discussion around the national identification harmonization project by applying as a lens key elements of the Principles on Identification for Sustainable Development that are relevant from a financial integrity perspective.

Citation

Monye, O. and De Koker, L. (2022), "Strengthening financial integrity in Nigeria: the national identification harmonization project", Journal of Financial Crime, Vol. 29 No. 4, pp. 1137-1154. https://doi.org/10.1108/JFC-05-2022-0104