Nigeria Retrieves Part of Stolen Billions

D+C Development and Cooperation Cameron Duodu/Gemini Nigeria has struck a deal with banks in Switzerland, Luxembourg, Liechtenstein and Britain to get back about $1 billion in frozen assets, stolen by late military dictator General Sani Abacha and his family. Nigerian authorities have been trying to trace the money, which has been hidden in secret bank accounts in Switzerland and other countries, ever since Abacha died in June 1998. Altogether, the dictator who ruled Nigeria from 1993 till his death is suspected to have salted away more than $4 billion. The agreement, reached 17 April, brings the amount Nigerians have been able to recover so far to $2 billion. Efforts are still on to trace the remaining billions. Ed Royce, Africa subcommittee chairman within the United States House of Representatives, used the news to highlight why Nigeria faces economic woes. "This [the looting] is one of the reasons why living standards in Nigeria are worse today than 25 years ago, despite the $300 billion in oil revenue generated since then." Despite improved world oil prices, the current Nigerian budget still has a deficit of 6.9 per cent of Gross Domestic Product and Nigerian authorities will be ecstatic to be able to inject $1 billion of unexpected money into the struggling economy. The Swiss Federal Ministry of Justice in Bern has laid out the formula under which the Nigerians are to get the money. Swiss banks will return assets worth $535 million held in the name of the Abacha family. A further $500 million held for them by banks in Liechtenstein, Luxembourg and offshore accounts in Britain’s tax-haven island of Jersey is also to be handed over. The assets in Switzerland will initially be handed to the Bank for International Settlements at Basel before being surrendered to the Nigerian government. In return, none of the Abacha family will face any further prosecution for corruption and fraud. The out-of-court settlement bypasses many legal hurdles - mainly of a criminal nature - that could have stood in the way of an in-court settlement. The agreement, for instance, allows the Abacha family to keep $100 million. The Nigerians and the Swiss Federal Office of Justice have agreed to regard this sum as assets "acquired prior to Abacha’s term in office" and which "demonstrably do not derive from criminal acts". This would have been difficult to justify in court: Abacha was only on a general’s salary in the Nigerian army, so how could he have legitimately amassed $100 million "prior to his term of office"? The pragmatic formula recognises that Nigerian authorities had to sacrifice something to get its $1 billion - moral high ground. They also had to recognise that the Abachas would be paying heavy legal fees for the fight they have put up overseas to protect their funds. So authorities concluded that $100 million - 10 per cent of the amount to be recovered - seemed a fair price to pay in an endeavour that, if stretched to its limits, might have yielded little, as in the Philippines’ case. The Philippines has been trying to trace money left in overseas secret accounts by President Ferdinand Marcos, who died in 1989. It has reached a settlement with the Swiss banks, but nothing as generous as what the Nigerians have secured. The settlement is of major significance in the international drive to get secretive banks in the West to help protect the resources of poor Third World countries from plunder by their own leaders. In the past, Swiss banks have constituted a safe haven for such dictators. Whenever dictators have died in office and attempts have been made by their successors to trace their assets, they have come up against a wall of silence in the name of "banking secrecy". The Swiss government, aware of the tarnished image it was garnering for itself in the world, enacted a law in 1998 that obliges Swiss banks to provide information to federal prosecutors on suspect assets held in Switzerland. In some cases, Swiss bank officials can be prosecuted if it is found that they were not diligent in attempting to verify whether money deposited in their banks was laundered. The Nigerian deal will send a strong signal to rulers of all poor countries that the era in which they could plunder their countries at will is over. This settlement is also likely to put greater pressure on British authorities to review their banking practices. Much of the Abacha loot passed through reputable British banks on its way to Switzerland and elsewhere. Nigerian and Swiss authorities have expressed dissatisfaction with the attitude of British banks when asked to provide information on these transactions. They also expressed exasperation over the failure of British financial and legal authorities to lean hard enough on the banks to make them provide information. In Nigeria itself - one of the countries most widely accused of corruption - the signal will be even stronger: it is estimated that if only 100 or less of the more wealthy Nigerians were to transfer home the assets they currently hold abroad, Nigeria would cease to experience foreign exchange difficulties. But the settlement will, no doubt, also cause anger in some Nigerian circles. By allowing the Abacha family $100 million and agreeing to no further criminal charges against them, some will argue that the Nigerian government condones such crimes.