By Rekpene Bassey
Terrorism has never depended on guns, ideology and willing recruits alone. It requires money. Vehicles must move, weapons must be acquired, communications maintained, safe houses secured, fighters fed and informants rewarded.
Behind the visible violence of terrorism lies an invisible architecture of finance. Whoever controls that architecture can sustain violence even when its fighters are under military pressure.
This is why the Central Bank of Nigeria’s decision to make terrorism-financing supervision a current supervisory priority is considerably more important than another regulatory announcement. It potentially marks a strategic shift in Nigeria’s counterterrorism doctrine—from pursuing terrorists after violence has occurred to disrupting the financial ecosystem that makes such violence possible. In intelligence terms, it is a movement from reaction to prevention.
The announcement, signed by the CBN’s Acting Director of Corporate Communications, Mrs Hakama Sidi-Ali, identifies four principal areas of attention: high-level terrorism-financing risk management, terrorism-financing monitoring, implementation of targeted financial sanctions and terrorism-financing-related suspicious transaction reporting. The significance is not merely regulatory. It places financial institutions closer to the frontline of national security.
Nigeria’s experience demonstrates why this matters. Terrorist financing is not necessarily characterised by large international transfers, sophisticated offshore structures or obviously criminal transactions.
The country’s terrorism-financing risk assessments have identified significant vulnerabilities arising from cash, informal economic activity, businesses, intermediaries and multiple channels through which value can be transferred. The financial trail may therefore be deliberately ordinary.
The terrorist financier does not always look like a terrorist. He may appear to be a businessman, trader, transporter, contractor, donor, company director or intermediary. Money may move through legitimate enterprises before being diverted to illicit purposes. This creates the central challenge for financial intelligence: distinguishing the criminal purpose hidden within legitimate economic activity without criminalising legitimate commerce.
The risk is particularly acute in an economy where cash remains important and where terrorism intersects with kidnapping, arms trafficking, smuggling, illegal mining, human trafficking and other illicit markets.
Criminal economies increasingly overlap. A financier may not directly purchase weapons or pay fighters; he may provide logistics, transport, commodities, communications or other services that sustain the network. Following the money therefore requires following the ecosystem.
This makes the CBN’s emphasis on a risk-based approach critical. Effective supervision is not simply about asking whether a bank possesses an anti-money-laundering policy. It requires determining whether the institution understands the particular risks associated with its customers, products, geographical footprint, delivery channels and transaction patterns. A financial institution operating in or serving high-risk environments cannot sensibly apply identical assumptions to every customer.
The challenge has become more complex with the rapid expansion of digital banking, fintech platforms, mobile money, agent banking, instant transfers and virtual assets. These innovations have expanded financial inclusion and economic opportunity, but they have also created additional channels through which illicit actors can move value. The same technology that makes legitimate finance faster can make criminal finance faster, more dispersed and harder to detect.
Consequently, the problem is no longer simply finding suspicious money. It is identifying suspicious patterns within an enormous volume of legitimate transactions.
Terrorist financiers can fragment payments, use multiple accounts, exploit apparently legitimate businesses, employ intermediaries and move value across several channels. Camouflage is part of the tradecraft. Financial intelligence must therefore evolve from transaction monitoring to network analysis.
The critical intelligence question should not merely be, “Is this transaction suspicious?” It should be, “What does this transaction reveal when connected to other transactions, people, companies, locations and events?”
A single transfer may appear meaningless. A series of apparently unrelated transactions involving the same individuals, businesses, geographical areas or commodities may reveal an entire financial network.
This is why suspicious transaction reporting is so important. Reports submitted by banks and other reporting entities to the Nigeria Financial Intelligence Unit are not the end of an investigation; they can be the beginning of one.
Properly analysed, they can provide intelligence to law-enforcement, security, intelligence and regulatory agencies. The real value of financial reporting lies in what intelligence professionals can discover behind the initial alert.
But Nigeria must avoid measuring success simply by the number of suspicious transaction reports filed. Thousands of alerts can become institutional noise if analysts cannot distinguish meaningful signals from harmless anomalies.
The real measure should be the intelligence chain: an alert producing a lead, a lead producing an investigation, an investigation producing disruption, an asset freeze or prosecution, and ultimately the dismantling of a financial network.
Targeted financial sanctions are equally central. Nigeria already has a regulatory framework requiring financial institutions to implement targeted sanctions relating to terrorism financing and proliferation financing.
The challenge is therefore increasingly one of implementation and enforcement. Institutions must identify designated persons and entities accurately, prevent prohibited access to financial services, freeze relevant assets promptly and make the required reports.
Technology will be indispensable in this process. The CBN’s introduction of baseline standards for automated AML/CFT/CPF solutions reflects the reality that modern financial crime cannot be effectively policed with outdated manual processes alone.
Real-time monitoring, automated screening, data analytics and intelligent transaction surveillance can help identify suspicious behaviour across banks, payment platforms, money-transfer operators and other financial institutions.
Yet technology is not intelligence. An algorithm can identify an unusual transaction or pattern; it cannot automatically understand its strategic significance. Human analysts must connect financial anomalies with intelligence concerning terrorism, kidnapping, arms trafficking, illegal mining, smuggling and other predicate crimes.
Artificial intelligence should therefore augment human intelligence, not replace judgement, contextual analysis and professional investigation.
The financial system must consequently be integrated into Nigeria’s wider intelligence cycle. The NFIU’s work with investigators, prosecutors, regulators and security institutions points in this direction.
Financial intelligence becomes most valuable when it can be rapidly converted into operational intelligence, investigative leads and courtroom-ready evidence. The ultimate objective is not simply to produce financial reports but to generate actionable intelligence.
This approach also requires looking beyond banks. Terrorist organisations depend upon logistics networks, suppliers and intermediaries. Their financial footprint may therefore be visible in transport companies, procurement chains, commodity transactions, vehicle movements, telecommunications, accommodation and other seemingly peripheral activities. The question must increasingly be not only where the money moved, but what the money purchased and who benefited from it.
Kidnapping for ransom illustrates the convergence particularly well. Ransom proceeds originate from a criminal act, but once the money is transferred, concealed, laundered or reinvested, it can enter the same financial ecosystems that sustain organised criminal and terrorist networks.
This convergence demands closer cooperation among financial intelligence, police, military, intelligence, anti-corruption, customs and other relevant institutions.
Nigeria’s counterterrorism strategy must therefore recognise the financial dimension of asymmetric warfare. Terrorist organisations may lose territory, commanders or fighters and still regenerate if their sources of funding remain intact.
Financial disruption attacks the organisation’s capacity to recruit, procure, communicate, move and survive. In that sense, financial intelligence can sometimes achieve what kinetic operations alone cannot.
Nigeria’s recent progress in strengthening its AML/CFT regime also provides an important foundation. The country’s successful completion of the Financial Action Task Force action plan and removal from increased monitoring demonstrated significant institutional progress. But international recognition should not be mistaken for mission accomplished. The greater challenge is to sustain reforms and demonstrate that they produce measurable security outcomes.
The CBN should therefore resist turning terrorism-financing supervision into another compliance campaign dominated by circulars, seminars and checklists. Supervisory examinations should ask harder questions: How many genuine terrorism-financing risks were detected?
How rapidly were sanctions hits addressed? How many reports generated actionable intelligence? How effectively can an institution reconstruct a financial network? And how often does its financial intelligence contribute to disrupting criminal or terrorist organisations?
Banks and other financial institutions must also understand that the compliance officer is no longer merely a regulatory gatekeeper. In an era of asymmetric warfare, the compliance function forms part of the national security perimeter.
A transaction that appears innocuous to a banker may become significant when correlated with information held by the NFIU, DSS, police, military intelligence, EFCC, NCTC, Customs, Immigration or foreign financial-intelligence units.
But the financial war against terrorism must not become a war against innocent citizens. Risk-based supervision must remain genuinely risk-based. Legitimate businesses, humanitarian organisations, charities, remittance recipients and communities in high-risk areas should not be subjected to indiscriminate financial exclusion. The objective is precision: identify the threat, isolate the network and protect legitimate economic activity.
Nigeria should now move beyond the traditional doctrine of know your customer toward the more demanding doctrine of know your customer’s network. The account holder is only one node. The deeper intelligence lies in relationships—who sends the money, who receives it, who owns the company, who supplies the goods, who controls the vehicle, who withdraws the cash, who crosses the border and what happens afterwards. Terrorists exploit institutional boundaries; the state must defeat them by connecting those boundaries.
The CBN’s new supervisory priority should therefore be treated as a strategic national-security doctrine, not a regulatory footnote. Nigeria has spent years confronting terrorism through kinetic power, but every terrorist organisation also possesses an economic bloodstream.
The next decisive frontier may be a transaction-monitoring system, a beneficial-ownership record, a suspicious account or an analyst asking the question terrorists fear most: Where did the money come from, where is it going, and who is really behind it? Follow the money, and Nigeria may find the network before the network finds its next victim.
*Rekpene Bassey is the President, African Council on Narcotics (ACON) and Security Specialist
