By Henry Boyo
THE actual amount stolen from Nigeria’s Treasury between 1993-8, by former Military Dictator, Sanni Abacha, may never be known. Nonetheless, Amnesty International, for example, has suggested, that over $5bn of Abacha loot had been identified, even when speculations still persist that the audacious ‘shop lift’, by Abacha, and his associates, is probably nearer $10bn. The Nigerian treasury, may have been boosted by the recovery of well over $3bn, since Obasanjo initiated, the International pursuit of Abacha’s loot in September 1999.
Notably, Liechtenstein returned $227m in 2014, while Jersey, reportedly returned €149m by November 2003, with another tranche of €315m, expected by December 2014; Luxembourg authorities, also announced that $630m of Abacha money, had been identified and frozen in 8 bank accounts.
Furthermore, the US had in August 2014, similarly announced seizure and return of $480m Abacha loot to Nigeria. However, with Finance Minister, Kemi Adeosun’s confirmation, in April 11 2018, Switzerland will have fulfilled its pledge to return another $322m, in addition to the first tranche of $700m which was fully repatriated into Nigeria’s kitty by December 2012.
Notably, the Swiss Authorities were obviously unhappy, with the ‘hazy manner’ the $700m loot, earlier repatriated, was spent; consequently, the major pre-condition for drawdown of the second tranche of $322m was that “it will be used to finance projects that will strengthen social security for the poorest sections of the Nigerian population”.
Already, there are grumblings that the choice of the poorest Nigerians, who will benefit, will ultimately be arbitrary, sectional or inequitable; besides, the wasteful manner, such funds had been applied, to uncoordinated, freewheeling, populist interventions, in the past, will certainly, not inspire much hope, that the additional repatriation of another $322m loot will have a meaningful or enduring social impact.
Furthermore, the repatriation process for the latest $322m, may have, infact, actually commenced in 2014, with the pre-condition, according to a BBC December 5 2017 report, that “the money will be paid in installments, and in small amounts, specifically, to finance National social safety net projects, which have been agreed with the Nigerian government and executed with regular audits, under the supervision of the World Bank.”
According to Ambassador Roberto Balzarretti, Head of the Swiss delegation, in the BBC report, on the Agreement with Nigeria, “if the first installment is not properly accounted for, subsequent payments will be halted. This is to prevent the funds from being stolen again!”
What this may mean is that, although the Nigerian Government appears to presently, celebrate the reported return of $322m, however, the modus operandi for disbursement, according to the terms of agreement, was projected as installmental payments in “small amounts”. Notably, also, although, the Swiss Authorities, actually indicated, in May 2014, that a total of N380m would be returned, ultimately, by July 2018, just over $322m was confirmed as the actual net inflow. The difference of about $60m may, have been of course, incurred as “repatriation fees” to both Nigerian and foreign agents.
However, the mind boggles, if the Abacha loot was, conversely, sensibly applied to create critical education, health and transport infrastructure since 2003. Regrettably, most of these funds were impounded in foreign custody, for possibly more than 20 years, without even a kobo interest payment. Indeed, it would not be totally preposterous to suggest that the Swiss and other International financial outfits, which harboured deposits of Abacha loot, may have also, circuitously, become Nigeria’s creditors from our government’s forays into the International debt market to finance fiscal deficits. All the same, maybe we should still be thankful that a part of the monstrous loot was at least recovered.
The question, nonetheless, is whether or not the application of such repatriated loot will have any enduring or meaningful social impact on the challenge of reducing the number of 87million Nigerians who, according to a recent report from the Washington based, Brookings Institution, live in abject poverty(See “At last a world ‘trophy’ for Nigeria! www.betternigerianow.com).
Instructively, however, if according to the agreement, installmental payments of the $322m Swiss loot were already made between 2014 -18, then, once again, the social impact of such interventions has regrettably, clearly not been noticeable.
In essence, however, the agreement between the Swiss Authorities and the Nigerian government appears to have been rather simplistically predicated on the notion that, small cash hand outs, to the poor, from time to time, would reduce poverty, and provide social safety nets for almost 200 million Nigerians. Arguably, however, the surest social safety net against deepening poverty, everywhere, certainly, still remains ready opportunities to engage in gainful employment. Invariably, with the population of unemployed Nigerians still rising, the repatriated Abacha loot has failed so far, to ameliorate the widespread scourge of poverty, as expected.
The obvious reason for the failure of expectations from such ‘charitable’ cash injections, is that increasing government expenditure, will not automatically propel economic growth or reduce poverty, so long as the underlying monetary indices, in the economy, remain counterproductive and out of gear. For example, the model of increasing government spending, when inflation is already well above best practice rates below 3% will not reduce poverty. It is equally implicit that interest rates, paid by local industrialists and businesses to borrow, will predictably remain higher than the inflation rate and therefore increase cost of production, since it is not rational for anyone to lend money, below prevailing inflation rate.
Furthermore, higher rates of inflation, will inevitably, also constrain consumer demand, which will in turn, compel industrial and business contraction, with serious consequences for the level of employment. Regrettably, therefore, the re-injection of Abacha’s looted funds and other similar fiscal and extra budgetary cash interventions, to purportedly alleviate poverty, may have ‘also inadvertently’ contributed to our economy’s double digit inflationary push in recent years. The reason for this mismatch is quite obvious; invariably, best practice, implies that you do not put out the fire of inflation by pumping more and more money into a market, in which the monetary authorities, themselves, have expressed concerns, on the discomforting inflationary pressure of the burden of prevailing excess money supply.
Inexplicably, all Administrations, since 1999 have consistently projected annual fiscal deficits which were usually funded by additional debt consolidation, even when the accommodation of such fortuitous cash interjections, such as the $322m Abacha loot would have eliminated or possibly reduce the need to borrow at such oppressive rates.
Nonetheless, it is likely that the challenge of inflation is persistently instigated by CBN’s usual unilateral substitution of Naira allocations for all forex revenue, including repatriated loot, before distribution is patently responsible for spiraling inflation and the dysfunctionality of Nigeria’s economy and deepening mass poverty.