Abacha has died since 1998 yet he is still bailing us out with funds from the 2nd Sovereign (or Looted) Wealth Fund he created for us. Legend. Hero. Lol.
— Dolapo Oni (@Dolarpo) June 4, 2019
The US must release the Abacha loot. Does Nigeria have the will to push for it?
The US controls the fate of Abacha's loot – but so does Nigeria.
It’s been more than two decades since Sani Abacha – the Nigerian dictator with a love for dark sunglasses, exterminating political dissidents and looting billions of dollars from the treasury – died. Still, every other year, there’s a revelation of a new tranche of money stashed away in his name.
It’s the gift that keeps on giving – the handouts from the great beyond. One analyst jokingly called it the “2nd Sovereign (or Looted) Wealth Fund”; another commentator called him “Nigeria’s very own angel investor.”
The latest discovery was in early June – $267m in an account traced to the late despot and hidden in the tax haven of the Channel Islands, where he had laundered it into through the USA. As it stands, that money could go into the Criminal Confiscation Fund and be used for infrastructure projects on the islands.
- The Nigerian, US and Jersey governments now have to begin what is potentially a long road in reaching an asset-sharing agreement.
Africa’s once-largest economy needs all the cash inflow it can get:
- The Nigerian government continues to drain the Excess Crude Account – which had dropped from $2.3bn in November 2018 to a miserly $183m as of March 2019, leaving the economy vulnerable to any oil crash. This value is less than the Abacha loot under consideration.
- Nigeria also has debts of N24.3trn ($79.29bn) as of November 2018.
- Also the the poverty capital of the world – with 87 million people in extreme poverty in 2018 – Nigeria is in the fiscally unsustainable position of currently borrowing to pay civil servant salaries.
The Swiss government has historically been more pliable than the US, returning $322m previously stashed in Luxembourg, that was disbursed to low-income earners via a direct cash transfer programme to 302,000 beneficiaries across 19 of Nigeria’s 36 states.
So the million-dollar question remains: why is there an impasse in the negotiations between the US and Nigeria over repatriation of the funds? A government official who has been involved in discussions between both countries explains:
- “According to US law, when it discovers such monies and makes an announcement, that money is in all likelihood, not yet in an American bank, but is in a financial jurisdiction in which the US has some sort of control; in this case, the Channel Island of Jersey. Still, it is an incredibly long litigation process for prosecutors to convince the American courts that the money ought to be repatriated inwards. Also, because the monies are frozen, that makes the process doubly long because separate court sanctions are needed.”
All of this because the American judicial system wants confirmation first that the funds are proceeds of corruption and also needs guarantees that they will not be looted again or diverted, with standard controls for preventing that established and documentation on the planned utilisation provided.
It is an incredible amount of bureaucracy and diplomacy that has to go on behind the scenes for years.
“As I understand it, if the decision is to use the funds in paying for, says, a series of road constructions or building a world-class hospital in each of Nigeria’s six geopolitical zones, these US officials would have to ensure that the money is paid directly to contractors. Cases like the lingering controversy around the recovery of the Swiss funds, only serve to increase the reluctance of the Americans to return these monies without die diligence”, says the official.
- The most cynical might believe that because Nigerian government officials have no personal vested interest — the window for skimming off the contracts is closed — they won’t bother to push the US to return the money.
- Those who are lost causes of cynicism might believe that the highest officials in Nigeria’s legal system have links to the Abacha family, and have every interest in leaving the money fallow abroad, rather than let the Nigerian government and people reclaim their monies.
- Those who have died and gone to whatever afterlife is reserved for cynics might even suggest those officials sit on their hands and rely on the court of public opinion to bash the Americans for withholding Nigeria’s birthright.
But you are not a cynic, right?