THE ODIOUS KLEPTOCRATS

Rajika Jayatilake notes that Nigeria is fighting to recover stolen assets with new laws and international help

They say that a democracy of the rich is not a democracy – and Nigeria is a powerful and compelling example of this perception. With a population of over 215 million, it is Africa’s largest economy and oil exporter.

According to a recent World Bank report however, almost 83 million people (some 40%) live well below the country’s poverty line.

Furthermore, a 2021 report on the UN Sustainable Development Goals (SDGs) notes that Nigeria has little chance of achieving its first SDG goal of ‘zero poverty’ by 2030. This is because the nation’s poverty level is rising sharply every year despite its extensive oil resources.

And as the SDG report reveals, its leadership appears to be supervising increasing poverty in the country.

This billowing poverty is not helped by endemic corruption. Transparency International’s (TI) 2021 Corruption Perceptions Index (CPI) ranks Nigeria 154 out of 180 countries. This makes it West Africa’s second most corrupt country after Gui­nea-Bissau, which is considered the most susceptible to graft.

According to the Chairman of Nigeria’s Human and Environmental Development Agenda (HEDA) Resource Center Olanrewaju Suraju, corruption is deeply embedded in Nigerian society and cases mostly involve high profile individuals, government officials and politicians.

Furthermore, the anticorruption watchdog HEDA Resource Center says that Nigeria loses about US$ 15-18 billion in income annually as a result of illicit financial flows overseas.

Moreover, the UN commissioned Thabo Mbeki report of 2018 on illicit financial flows from the continent estimates that all of Africa’s stolen assets would amount to 50-60 billion dollars every year with Nigeria accounting for 30 percent of this sum.

Meanwhile, the United Nations Conference on Trade and Development (UNCTAD) says that Africa could gain US$ 89 billion annually by curbing illicit financial flows. And a report by US think tank Global Financial Integrity claims that Nigeria has lost at least US$ 140 billion between 2000 and 2014, primarily because of the mispricing of crude oil and commercial activities.

UK-based financial crime research expert Dr. Gbenga Oduntan notes that a substantial amount of Nigeria’s illicit financial flows disappears into the ‘black hole’ of institutions and investments, in the UK and UAE.

He asserts that “once money is generated through bribery and corruption, the next step in the negative value chain of action is for the money to be laundered.”

The Nigerian elite have hidden their looted money in extensive property portfolios, luxury goods and exclusive private school education for their children. They have also hidden money in Dubai, Beirut, Cape Town and other ‘under the radar countries.’

Pushed to find a solution to reduce unabated money laundering, Nigeria’s senate passed the Money Laundering (Prevention and Prohibition) Act – 2022 in March to amend money laundering regulations.

According to this legislation, lenders are obliged to report to the Special Control Unit Against Money Laundering (SCUML) any suspicious activity including single individual transactions over US$ 12,035 and corporate deals valued at more than 24,070 dollars. Punishment for breaking the law includes imprisonment, stiff fines and prosecution. Additionally, Nigeria’s anti-money laundering laws have extraterritorial jurisdiction and offences are punishable outside the country while foreign money laundering crimes are actionable within.

However, there’s a silver lining in the blanket of dark clouds of financial losses for Nigeria through international cooperation and assistance to recover stolen assets.

In May 2022 for instance, the UK’s National Crime Agency (NCA) recovered over US$ 23 million stolen from Nigeria by former military dictator Sani Abacha. He had robbed five billion dollars of public money and was never charged when he was alive. This money was recovered following seven years of lengthy litigation and international negotiations.

According to the US Department of Justice (DOJ), Abacha became president of Nigeria following a military coup in 1993 and stayed in power until his death in June 1998. And the United Nations says he stole US$ 3-5 billion of Nigeria’s public assets during that period. The UN estimates that the stolen money could have funded 10 years of antiretroviral therapy for two or three million Nigerians infected with HIV/AIDS.

The DOJ, which is handling this money laundering case in collaboration with the FBI, says that over 625 million dollars was traced to funds stolen by Abacha, his son and associates, who embezzled, misappropriated and extorted huge sums… and then laundered their loot through financial institutions stateside and US-backed bonds.

In mid-2020, America repatriated over US$ 311.7 million of the stolen assets to the Nigerian people. This was done through a trilateral asset recovery agreement signed by the governments of Nigeria, the US and the island of Jersey.

Tracing and recovering Nigeria’s stolen assets was handled under the Kleptocracy Asset Recovery Initiative, which aims to safeguard the American financial system from money laundering and help recover looted assets.

As Indonesia’s Finance Minister Sri Mulyani Indrawati so accurately states: “Corruption, money laundering and tax evasion are global problems – not just challenges for developing countries.”

Corruption, money laundering and tax evasion are global problems – not just challenges for developing countries
Sri Mulyani Indrawati
Indonesia’s Minister of Finance