More questions than answers over $322m Abacha loot sharing
The Federal Government has disclosed that the newly repatriated $322m (approximately N116bn) loot stashed in Swiss banks by the late military dictator, General Sani Abacha, will be shared among the poor households in the country. However, this decision has been generating misgivings by finance analysts, writes JESUSEGUN ALAGBE
By the time military dictator, General Sani Abacha, died in office in June 1998, he had reportedly stolen an estimated $2.2bn from the country’s coffers.
His then National Security Adviser, Alhaji Ismaila Gwarzo; son Mohammed Abacha; and best friend, Alhaji Mohammed Sada, were alleged to have played a central role in the looting and transfer of money to offshore accounts.
A preliminary report published by the General Abdulsalam Abubakar-led transitional government in November 1998 had described the process through which the country’s funds were allegedly siphoned by the late head of state.
“Abacha told Gwarzo to provide fake funding requests, which he (Abacha) approved. The funds were usually sent in cash or travellers’ cheques by the Central Bank of Nigeria to Gwarzo, who took them to Abacha’s house. Sada then arranged to launder the money to offshore accounts,” the report had stated.
In 2004, the Transparency International named the late dictator as the fourth most corrupt leader in history.
Ten years later, in August 2014, the United States Department of Justice announced the largest forfeiture in its history – the return of $480m funds stolen by Abacha to Nigeria.
Meanwhile, as Switzerland was once regarded as the “grandfather of banking secrecy”, with its banks serving as safe havens for the wealth of dictators, corrupt officials and the like, Abacha was reported to have lodged part of his loot in the European country.
However, after intense pressure from the former President Olusegun Obasanjo-led Federal Government, the Swiss authorities initiated the repatriation of the stolen funds to Nigeria.
By December 2012, the Swiss government said over $700m out of about $1bn deposited in Swiss banks by the late military dictator had so far been repatriated to the Federal Government.
It noted at the time that it would further return about $322m, an amount originally deposited in Luxembourg by Abacha and later confiscated by a Swiss court in 2014 following a legal procedure.
In December 2017, the Federal Government signed a Memorandum of Understanding with Switzerland on the return and monitoring of the $322m Abacha loot.
In April 2018, the Minister of Finance, Mrs. Kemi Adeosun, confirmed the repatriation of the money to the country, stating that it was paid through the Central Bank of Nigeria on December 18, 2017.
With the development, the Swiss Ambassador to Nigeria, Mr. Eric Mayoraz, said the country had returned all Abacha loot hidden in the country’s banks to the Federal Government.
However, the Buhari-led administration said the newly repatriated $322m would be used to fund its Social Investment Programme, which entails giving money to the poorest and most vulnerable households in the country.
Under the programme, otherwise known as the Conditional Cash Transfer and which began in December 2016, the President had promised to assist one million poor and most vulnerable Nigerians with a monthly stipend of N5,000 each.
The National Coordinator of the National Cash Transfer Project, Dr. Temitope Sinkaiye, had recently said 300,000 poor households in 18 states and some Internally Displaced Persons in Borno State had already been receiving the cash transfers.
The states are Niger, Kogi, Ekiti, Oyo, Osun, Kwara, Cross River, Bauchi, Jigawa, Gombe, Benue, Taraba, Adamawa, Kano, Katsina, Kaduna, Nasarawa and Anambra.
In the meantime, the Special Adviser to the President on Social Investment, Mrs. Maryam Uwais, last week said the disbursement of the Abacha loot to the poor would start in July.
However, several Nigerians have been calling into question the decision of Buhari’s administration to distribute the $322m Abacha loot among the poor households, describing the gesture as economically illogical.
Although the poor deserve to be taken care of, a professor of economics at the Obafemi Awolowo University, Ile-Ife, Osun State, Ayobami Adebayo, said the cash transfer programme just wasn’t an effective way of tackling poverty among the people.
“The argument of many people is that giving money to the poor is a good thing to do, and that it is a form of injection into the economy. But, in Nigeria, how will they identify the poor? How do we ensure that the money doesn’t fall into the wrong hands?” he asked.
The don proposed that the Abacha loot could have been used for Development Responsibility Grant, which entails giving grants to small business owners in the real sectors of the economy.
Adebayo said the money could also be used to revive a major manufacturing company in the country which had gone moribund so that jobs could be created, “a better way of solving poverty.”
He said, “Now, there are the real sectors of the economy such as manufacturing and agriculture. Giving or even loaning the Abacha loot to the small business owners or farmers will lubricate these sectors.
“In the agriculture industry, for instance, there are still many infrastructural systems that should be put in place to boost output. And once farmers thrive, there will be more food and increased employment at the same time.
“In the manufacturing sector too, a lot of companies such as our tyre companies that are dead could be brought back to life with such funds. These are the real sectors that need intervention. The Federal Government should pump that kind of money into these sectors.
“We have been inviting foreign investors, but if we are not committed to easing the business environment by providing the needed infrastructure, they will leave sooner or later.”
The economist added that more youths with sound entrepreneurial ideas would be encouraged to launch their businesses once they got boost such as grants.
“Many youths are going into entertainment nowadays, trying to become artistes, because thriving in the real sectors is difficult for them. If they got assistance to launch their start-ups, it would make a major difference in their lives,” he said.
A development economist-cum-entrepreneur based in Abuja, Dr. Juliana Ogunyinka, also proposed that the $322m Abacha loot should rather be used to boost the country’s infrastructure.
She argued that giving money to the poor had always proved to be an unsustainable way of fighting poverty or reducing crime in the society.
She said, “The poor man’s problem is not the lack of money and it beats my imagination that even those in government don’t understand this fact. Give a poor man N1m; it can only solve his problem temporarily, and that is even if he doesn’t squander it. This has been proved time and time again.
“The case of the North, where poverty is said to be rampant, is just like the case of the whole country. Despite having enormous financial, natural and human resources, we are still a struggling country. We are resources-rich, but people-poor. Would you say we are poor because we don’t have money? No!
“There are countries that are far poorer in resources than us, but they are economic giants. My point is, the Abacha loot is a good sum of money that could be put to a more effective use.
“Imagine building schools and enrolling the poor children for free with money. Imagine using the money to fund another railway project that will see the light of day.
“Imagine building or reviving a manufacturing company with the funds. Imagine building an ultramodern hospital or cancer centre with the money. Imagine even lending the money to entrepreneurs who can build businesses and provide jobs.
“There is an endless list of what could be done with this money, which does not include spending it on feeding the poor. The poor have always been there and they will always be there. This doesn’t mean I don’t have pity for the poor, but the poor’s problem can never be solved by giving them money.”
Ogunyinka criticised the Buhari-led administration for having signed an MoU with the Swiss government on what it planned to do with the fund in 2017.
She said, “The problem with Africa will always be the Africans themselves. The Swiss government and the World Bank asked you to tell them what you wanted to do with your own money before releasing it. What effrontery! If the United States had been the owner of such funds, would they have been compelled to sign such an agreement?
“But the problem is that we Africans don’t make our stand known. They literarily dictated to us what we should do with our own money. Does it mean we don’t have plans? Of course. such embarrassment could have come as a result of the crop of failed leaders we have had.”
Similarly, a Kaduna-based finance expert, Mr. Jibrin Mohammed, shared Ogunyinka’s sentiments, saying that sharing the newly repatriated $322m Abacha loot among the poor households would not benefit both the country and the poor.
“The poor will always ask for more. Let the money finish now and the scheme stop, you would notice that they would go back to the streets to beg. Our problem has not always been lack of money, but lack of management skills and ideas,” he said.
Meanwhile, asked whether sharing the $322m Abacha loot among the poor households in Nigeria makes any economic sense, a public policy analyst and the Country Director of DAI Global, Dr. Joe Abah, said, “Cash transfers (to the poor) are not supposed to make economic sense. They are supposed to stop people from starving to death and stop them from dying unnecessarily from disease.”
As they are mainly northern states (13 out of 18 states) where the cash transfer programme was being currently initiated, Abah, who is a former Director-General of the Bureau of Public Service Reforms, said the programme might be skewed towards the region due to two likely reasons.
He said, “Poverty in Nigeria is skewed towards the North. The North is poorer than the rest of the country. However, Anambra, Osun and Oyo are not poor. So why those states? It’s probably because of the second reason.
“The second reason is that the database they are using is a World Bank database and they have only mapped poverty in those states. That’s why they said they would start with those states because that’s where they have data about the poor.”
Abah further argued that Conditional Cash Transfer (giving money to people or families on the condition that they take certain actions, such as sending their kids to school or getting them immunised) had been effective in some countries, including Brazil, Indonesia, Egypt and Peru and many other countries.
He said, “Properly used, both Conditional and Unconditional Cash Transfers can be effective in improving the lives of the very poor, encouraging better behaviour and responding to the basic physiological need to eat and not to die of preventable disease. They shouldn’t be dismissed.
“However, the problem in a country like Nigeria is that we don’t have a credible, comprehensive, identity management system. This, of course, renders it open to abuse and can turn it into ‘stomach infrastructure’ for election purposes.
“Perhaps we could dedicate part of this Abacha loot to building a stronger national identity management system to enable us to run CCTs and UCTs better in the future.
“Until then, we must remember that the fact that a scheme is open to abuse does not invalidate the effectiveness of that scheme. The task is to design ways to constrain that abuse.”