The Nigerian Financial Intelligence Unit (NFIU) has uncovered emerging methods allegedly being used by terrorist financiers to conceal illicit funds, including crowdfunding, proxy bank accounts and phone numbers linked to deceased persons.
The disclosure is contained in the NFIU’s 2025 Annual Report, which identified weak customer identification controls and gaps linking telephone numbers to Bank Verification Numbers (BVNs) as emerging risks in terrorist financing.
According to the report, foreign-based facilitators use social media to solicit small donations under the guise of humanitarian or educational support. The funds are then pooled into accounts controlled by senior members of the network before being split into smaller transfers and sent through international money transfer operators and remittance platforms to money mules in Nigeria.
The NFIU said the mules could include students, small-business owners and relatives. The money may subsequently be converted to cash or used to purchase items such as motorcycles, fertilisers and satellite internet equipment before being channelled to terrorist operatives.
The agency also identified the use of women’s bank accounts as proxy accounts, saying male commanders or logistics managers may secretly control accounts opened in the names of wives, sisters or female associates.
It said some facilitators also use pre-registered SIM cards, numbers registered to deceased persons and SIMs linked to proxies for mobile banking and transaction alerts. The practice, according to the NFIU, makes it harder for investigators to connect suspicious transactions to the individuals actually controlling the funds.
The report further identified the use of coded or seemingly harmless transaction descriptions to conceal the purpose of payments. It said some terrorist cells, including those linked to Islamic State West Africa Province, use detailed transaction narrations as part of their internal financial processes, while others rely on codes and innocuous terms to evade automated banking alerts.
Beyond terrorism financing, the NFIU said fraud remained a major financial crime risk in 2025, with growing cases involving Ponzi schemes, fraudulent crowdfunding, cryptocurrency investment scams and hacking-related fraud.
The agency also highlighted vulnerabilities in public-sector financial management, particularly the diversion of government funds through accounts belonging to finance officers and third parties. Procurement processes and cash transactions were identified as significant risks because they can make financial trails harder to follow.
The NFIU’s findings come amid increased scrutiny of suspicious financial activity. Its 2025 report showed that banks, fintechs and other reporting entities submitted 42,082 Suspicious Transaction Reports, alongside more than 41.7 million Currency Transaction Reports and 10,513 Suspicious Activity Reports during the year.
Security experts have consequently urged financial institutions and security agencies to strengthen identity verification, intelligence sharing and financial monitoring to prevent criminal networks from exploiting gaps in Nigeria’s financial system.
They also called for greater accountability among banks and other financial institutions where weaknesses in customer verification are exploited to conceal the true owners or controllers of accounts.
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