Michael Olugbode in Abuja
The United States has imposed terrorism-related sanctions on three Nigerian bureaux de change and their alleged owner over accusations of financing the Islamic State West Africa Province (ISWAP), in a move that once again places Nigeria’s financial system under international scrutiny and highlights growing cooperation between Washington and Abuja to dismantle terrorist networks operating in the Lake Chad region.
The sanctions, announced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of State, named Nigerian financier Mukhtar Adamu Muhammad as an ISWAP financial facilitator accused of conducting money transfers and providing financial services on behalf of the extremist organisation.
Also designated were Nine to Nine Exchange Bureau de Change Limited, Manhattan Bureau de Change Limited and Generation Currency Bureau de Change Limited, which U.S. authorities alleged were owned, controlled or directed by Muhammad and used as conduits for moving funds linked to ISIS activities.
The action forms part of a broader operation targeting three individuals and six entities operating across West Africa, Europe and the Middle East that Washington said helped ISIS raise, transfer and conceal funds to sustain its global operations.
Besides the Nigerian network, the sanctions targeted France-based Miloud Abderrahmane and Syria-based Abdelhakim Boukich. U.S. authorities accused Abderrahmane of carrying out financial transactions for known ISIS affiliates and disseminating bomb-making instructions to supporters of the terrorist group, while Boukich allegedly used cryptocurrency channels to facilitate transfers for ISIS associates in several countries, including the United States.
According to the U.S. Treasury, Muhammad had “materially assisted, sponsored, or provided financial, material, or technological support for, or goods and services to or in support of, ISIS-West Africa.”
Under the sanctions, all property and interests in property belonging to the designated persons and entities under U.S. jurisdiction have been blocked, while American citizens and companies are prohibited from engaging in transactions with them. The measures could also effectively isolate the designated entities from major segments of the international financial system.
The latest action comes against the backdrop of an increasingly complex terrorist threat in Nigeria. While the Boko Haram insurgency began in 2009 in northeastern Nigeria, the emergence of ISWAP following a split within Boko Haram in 2016 transformed the conflict into one of the Islamic State’s most formidable franchises outside the Middle East.
Since then, ISWAP has carried out deadly attacks on military formations, communities and humanitarian workers in Borno and neighbouring states, while exploiting the porous borders of Nigeria, Niger, Chad and Cameroon to establish transnational financing and logistics networks.
The United Nations estimates that more than 35,000 people have been killed and millions displaced since the insurgency erupted, making it one of Africa’s longest-running and most devastating security crises.
The latest sanctions also revive concerns over the vulnerability of informal financial channels to exploitation by terrorist groups. Security experts have repeatedly warned that extremist organisations increasingly rely on bureaux de change, cash couriers, informal remittance systems and cryptocurrencies to evade sanctions and sustain their operations.
Washington has steadily intensified efforts to dismantle the financial networks supporting ISIS and its regional affiliates. In March 2022, OFAC sanctioned six individuals accused of raising and transferring funds to Boko Haram, including persons convicted in the United Arab Emirates for facilitating the transfer of approximately $782,000 from Dubai to support terrorist activities in Nigeria.
The United States and the United Nations have also imposed sanctions on several ISWAP leaders and financiers accused of orchestrating attacks and managing the group’s finances. Similarly, the U.S. has designated ISIS-West Africa as a Foreign Terrorist Organisation and Specially Designated Global Terrorist entity, enabling authorities to freeze assets and disrupt its financial infrastructure worldwide.
Nigeria, for its part, has strengthened domestic counterterrorism financing measures. In 2022, the Federal High Court, acting on recommendations of the Nigeria Sanctions Committee, ordered the freezing of bank accounts and financial assets linked to individuals and entities suspected of financing terrorism. Earlier, the federal government designated several groups and individuals connected with terrorism financing and directed financial institutions and designated non-financial businesses to identify and block assets associated with them.
The latest sanctions also come amid deepening security cooperation between Nigeria and the United States.
In recent years, both countries have expanded intelligence sharing, counterterrorism training and operational collaboration aimed at degrading ISIS and Boko Haram capabilities in the Lake Chad Basin. Washington recently disclosed that it collaborated closely with Nigerian authorities in an operation that led to the killing of Abu-Bilal al-Minuki, described as the second-highest-ranking ISIS official and one of the group’s most influential commanders in Africa.
The renewed collaboration follows years of diplomatic engagement after Nigeria’s designation by the United States as a Country of Particular Concern (CPC) over religious freedom issues. Despite occasional policy differences, both nations have increasingly found common ground in confronting terrorism and violent extremism, with the United States repeatedly reaffirming its support for Nigeria’s efforts to restore security in the Northeast and cut off the financial arteries sustaining terrorist organisations.
Analysts say the designation of three locally based bureaux de change in a global terrorism financing operation underscores the increasingly transnational nature of extremist financing and will likely intensify scrutiny of Nigeria’s financial ecosystem. They argue that the development also reinforces the need for stronger financial intelligence systems, tighter regulation of money service businesses and enhanced international cooperation to prevent legitimate financial channels from being exploited by terrorist groups.
For Nigeria, the sanctions represent both a warning and an opportunity — a warning that terrorist financing networks continue to evolve and adapt, and an opportunity to deepen cooperation with international partners in dismantling the financial infrastructure that has helped sustain more than a decade of insurgency in the Lake Chad region.
