WHAT HAS BECOME OF THE $73 MILLION MALABU FUNDS?

In October 2017, the Attorney General of the Federation, Mr. Abubakar Malami, announced that the Nigerian Government had reached an agreement with the United Kingdom for the repatriation of $85 million from the Malabu oil deal.   The sum was later revised to $73 million which both the United Kingdom and Nigerian authorities confirm has since been returned to Nigeria.  There are, however, lingering questions about what has become of the money in terms of its utilisation.

The only relevant information available to the public is that 7.2 percent of the 2018 budget is being funded by “recoveries”.  A breakdown of this in the presentation by the Minister of Budget and National Planning, Senator Udoma Udo Udoma, to the National Assembly indicates that the recoveries are comprised of N97.6 billion recovered from Switzerland (Naira equivalent of the recovered Abacha loot), N374 billion domestic recoveries, including assets and fines, and N138.44 billion described as “Other FGN recoveries”.

Apart from this rather nebulous breakdown of the contribution of recovered assets to the revenue framework of the 2018 budget, there is no corresponding statement of what these recovered assets are being used to fund under the expenditure framework of the budget.  The only exception to this is the $322.5 million Abacha loot which has been earmarked to fund the Cash Transfer Programme of the Federal Government.  A similar clarity is imperative on the use of the $73 million Malabu funds from the UK.  There are fundamental reasons for this. 

Adhering to the GFAR Principles of Transparency and Accountability

Nigeria was one of the focal countries of the inaugural meeting of the Global Forum on Asset Recovery (GFAR) hosted by the UK and the United States in Washington D.C in December 2017.  An important outcome of the meeting was the agreement reached by participants on ten fundamental principles for effective asset recovery.  A major component of these principles (Principle 4), which Nigeria duly subscribed to, is ensuring transparency and accountability, not just in the return of assets, but in their utilisation.

Whilst there have been disclosures by the Federal Government on the repatriation of funds, the needed transparency and accountability is lacking in the utilisation of such funds.  This falls below the standards required under Principle 4 and makes it impossible to fulfil other principles under GFAR.   For instance, Principle 5 requires that “recovered assets be used for purposes that benefit the victims of corruption,” whilst Principle 9 stipulates that “all steps should be taken to ensure that offenders do not benefit from the use of recovered assets which are confiscated as proceeds of crime.”  Without the disclosure of what the $73 million returned from the UK is being used for, there is no mechanism through which to determine that the funds are actually being used for the benefit of the victims of corruption and are not being re-looted, as required under the framework of the GFAR Principles.

Keeping to MoU Between Nigeria and the UK

 The principles highlighted above are reiterated in the MoU between Nigeria and the UK on the Modalities for the Return of Stolen Assets Confiscated by the UK specifically, which was entered into in 2016.  Paragraph 4 of the MoU provides that returned funds are to be used for projects that will impact on the poorest segment of society and to improve access to justice for all Nigerians.  This raises an impending obligation on the Federal Government to demonstrate how funds recovered from the UK are being used to meet these purposes.

In the specific context of the Malabu funds which were returned within the framework of this MoU – and which the Federal Government has noted will be used to fund the 2018 budget – it is important for the Government to disclose what the funds are being used for.  This will enable all stakeholders to determine if such purposes are in accordance with the terms of the MoU and to effectively monitor the processes of their utilisation.

Why This Matters

Ensuring that there is the needed transparency and accountability in the use of the $73 million Malabu funds has significant implications for the asset recovery regime in Nigeria beyond the issues of legality and international obligations discussed already.  Demonstrating tangible and specific uses of recovered assets in ways that benefit ordinary Nigerians is vital to secure and retain the goodwill of Nigerians for anti-corruption efforts in the country, especially in the rather murky area of asset recovery. 

Whist most Nigerians find the gains made in recovering stolen assets from within and outside the country in the last few years encouraging, there are so many questions surrounding the use of such recoveries.  If the requisite transparency and accountability is not demonstrated in addressing these questions, there is a patent risk of the anti-corruption drive in Nigeria losing the support of ordinary Nigerians.  Demonstrating the direct link between recoveries and the appropriate development projects and initiatives is therefore crucial.

Furthermore, disclosing the use of the Malabu funds is important in showing that Nigeria can manage recovered funds in a transparent and accountable manner without the need for the sort of conditionalities to which the use of the repatriated Abacha loot was subjected.  It is therefore in the long-term term interest of asserting our sovereignty and enhancing our image as a country in the area of asset recovery that this is done.

Going forward, it is imperative that the current National Assembly passes the Proceeds of Crime Bill, and that the President assents to it before May 29, 2019.  The operation of this law will eliminate the need for the repeated advocacy on this issue by providing the legal and institutional framework that would ensure transparency and accountability in the recovery and utilisation of looted assets.

In the meantime, the Federal Government should keep to the terms of its MoU with the UK and other international obligations and responsibility to its citizens by duly informing Nigerians about what the $73 million Malabu funds are being used for.

Dr. Matthew is ANEEJ policy & research director