One of President Muhammadu Buhari’s first moves after he was inaugurated was in pursuit of public funds stolen and stashed away in foreign vaults. Correspondent, SAM NWOKORO, looks at the politics of loot recovery and how far past regimes fared in the project.
The issue kicked up by the recent acrobatics between the British National Crime Agency (NCA) and the Nigerian justice and diplomatic systems over the arraignment and bail of Nigeria’s former Petroleum Minister, Diezani Alison-Madueke, has re-opened once again the issue of looted Nigerian funds and the haphazard probe projects in Nigeria.
An intriguing web of politics, special interests, foreign cover-ups and manipulations have enveloped the project of recovering Nigeria’s looted funds.
Loot recovery in Nigeria is, of course, a tinderbox due to the peculiar Nigerian fiscal federalism practice which has been upbraided unceasingly for its lack of social equity and moral conscience. Nature’s distribution of resources is beyond the sanctions and censorship of mortal man. The political evolution of Nigeria has resulted in one of the most abused structures of nationhood that at best has been a perpetual hindrance to individual and collective progress. The distribution of mineral resources such as the precious oil and gas in Nigeria’s landscape had resulted in a situation whereby the minority literally feed the majority: roughly nine states providing the funds that run Nigeria’s 36 states and the Federal Capital Territory (FCT), Abuja.
Worse, those states are minuscule in population, just some 60 million out of Nigeria’s current population estimate of 187 million. Lacking composite voting power, this region – chiefly in the South East and South South – find it difficult to muster political muscle. Immediate past President Goodluck Jonathan has been the only elected Nigerian president to come from the oil and gas regions known as Niger Delta. And because the area is harbouring 90 per cent of Nigeria’s oil and gas production and reserves since 1958, political power domination has been the tool with which powerful individuals of other regions – North East, North West, North Central and South West – have used to dominate the area since 1958 when crude oil was discovered in commercial quantity at Oloibiri, a small community in Ogbia Local Government Area in the present Bayelsa State.
Discovery of oil and gas, its commercialisation, production and export have been feeding Nigeria’s treasury since then. And since Nigeria’s political leadership was dominated by the military (1967-1979 and 1984-1998), and their quasi civilian breed, corruption accentuated by crude oil export receipts, and absence of democratic checks resulted in a long history of looting public treasury.
Recovery had been at half measures with no serious parliamentary oversight for all that long period. The result has been that countries in the Americas and Europe had been safe havens for Nigeria’s stolen funds.
The first major effort to tackle public officers on corruption was during Buhari’s first stint in 1984 as military ruler. The then Major General Buhari overthrew the Second Republic and jailed many of the politicians. But his tenure was short-lived as he ruled only for a year and eight months before he was overthrown by another General, Ibrahim Babangida.
Popular perception has been that official corruption and mismanagement of Nigeria’s wealth took place during Babangida’s tenure, followed by General Sani Abacha (now the late), then by Olusegun Obasanjo between 1999 and 2007 as a returned civilian president after his retirement from the military in 1979.
Owing to the close-knit relationship between Nigeria’s military and civilian heads of government since 1967, the problem of loot recovery has for all that long been tempered by cronyism. Obasanjo’s efforts in 2005 at the twilight of his second tenure did not yield much result, as whatever he recovered had been enmeshed in unending controversies, with allegations of outright diversions dogging it.
To win this war against graft as well as recover stolen funds as intended, Buhari should ignore the following information at his own risk.
Switzerland, Nigeria and funds repatriation
In September 2005 at the headquarters of the World Bank in Washington DC, the Nigerian and Swiss governments signed an agreement for the repatriation of $458 million (about N91.5 billion) in stolen loot stashed away by the Abacha family in several Swiss banks. This represents about 90.7 per cent of the $505 million taken illegally out of the country to Switzerland.
In total, over $2 billion has been identified as looted by General Abacha and stashed in foreign banks. Over $1.3 billion was lodged in the United Kingdom alone, and an estimated 150 financial institutions around the world were involved in the dictator’s elaborate money laundering scheme.
In May 2005, the Swiss government announced it would finally pay back the money based on a judgment by the Supreme Court. This however would happen in two stages with a first tranche of $290 million to be handed over immediately. The second would be contingent upon good performance under the “supervision deal” agreed with the World Bank. The funds handed back to Nigeria are to be spent on health, education and infrastructure projects.
The return of these funds is one of the first cases of looted funds actually being repatriated, and can serve as an important legal precedent. Shortly afterwards, the federal government announced recovery of $149 million from accounts in Jersey.
To achieve recovery of the stolen loot, President Obasanjo liaised with the authorities in the countries in which the former dictator had stashed his loot in. They responded by freezing the accounts.
Physical repatriation of these funds represented another matter however and Obasanjo was forced to threaten legal action against Switzerland. In the UK, the banks concerned were keen to emphasise a legal resolution to the problem.
The Swiss campaign lasted some five years before final resolution this year. Legal fees totalling $14 million are to be deducted from the final amount. The repatriation follows (and depended on) a large mobilisation by civil society groups and governments of Nigeria and Switzerland.
Limitations of the deal
It strengthens the role of the World Bank: The deal is tied to the Public Expenditure Management and Financial Accountability Review (PEMFAR). This review mechanism gives an important role to the World Bank and Swiss government to monitor repatriated funds and ensure they are spent satisfactorily.
According to the World Bank, “every effort will be made to ensure participation of civil society organisations in this work”. The danger is of course that the World Bank could steer priorities in the spending of the repatriated funds (rather than priorities being locally identified) as well as swallow up significant portions of this money in “expert” assistant and advice – not to mention the cost and administrative burden associated with the PEMFAR system.
Civil society role
The international community is making increasing noises about “good governance” in developing countries. The Swiss government was only prepared to release funds on the guarantee that they would be used on development activities, hence the monitoring arrangement agreed with the World Bank.
Some civil society groups in Nigeria were also demanding assurances that the money would not line the pockets of corrupt officials and that they would have a say in the projects that would be funded with the returned loot. This seems to be the case playing out in the Economic and Financial Crimes Commission (EFCC) where the chairman, Ibrahim Lamorde, is allegedly tampering with some funds the commission recovered from treasury looters.
Various proposals were put forward by civil society groups in Nigeria. These include: trust funds; prior establishment of projects and budget for which the cash will be used; creation of an independent body to administer and monitor the funds; and memoranda of understanding.
Civil society groups must however be very clear in their message on this point – in the current political climate the focus on good governance and corruption is unlikely to go away though many may view this as unfair.