How Nigeria can take the profit out of corruption

President Muhammadu Buhari has rather wisely turned the spotlight on recovering stolen funds. The President recently confirmed that his government has “received firm assurances of cooperation from the United States and other countries on the recovery and repatriation of funds stolen from Nigeria. According to the President, “the government in the next three months will be busy getting facts and figures needed to help us recover our stolen funds in foreign countries.”

It’s no coincidence that the first priority of the Buhari government is not to throw corrupt officials in jail but to recover stolen funds. Nigeria is broke, and several of its 36 states can’t even pay their workers’ salaries. But this is hardly surprising given that for many years the country has fallen victim of systematic stealing by career politicians and soldiers dabbling in politics. Previously considered a matter of “little brown envelopes”, corruption is now a huge “profitable business” for politicians (and their families and friends, the so-called go-betweens or ‘looting pipes’), corporations and financial institutions and centres.

Stealing is odious, illegal and immoral but stolen funds don’t stink, as corrupt officials continue to empty the public treasuries for personal gains–to amass luxury cars, buy extravagant homes, and enjoy exotic vacations–to the amazement and anger of millions of Nigerians. Images of government officials lining their pockets with the treasure of the poor are stark and raw.

Yet, corrupt officials are allowed to keep their looted funds and thus reaping the benefits of their corruption. The abundance of wealth of the ruling class stands in stark contrast to the poverty of the majority of Nigerians.

Allowing corrupt officials to benefit from their crime has a degenerative effect on the institutions of governance, human rights and the rule of law. Therefore, the Buhari government is spot-on to focus on the return of stolen funds, as this can help take the profit out of corruption, thereby reducing the incentive to act corruptly. This notion of taking the profit out of corruption is premised on a belief that the individual’s economic behaviour is rational and based on a balance of interest and risk.

However, asset recovery is complex, expensive and slow, requiring sound planning and proactive actions by the government if any significant success is to be recorded. Important documents and primary information will be needed to allow forensic experts, accountants, lawyers, etc., to build a prima facie case to initiate mutual assistance requests. Once stolen funds are identified, the government must move swiftly to seize and freeze the funds as a provisional measure, to prevent the possibility of funds being moved around and closure of accounts.

The government may for example request that a blanket disclosure and freezing order be sent to targeted banks in Europe and North America where prima facie information is available that stolen funds are deposited in those banks.

But none of these will succeed without the full and effective cooperation of other states. That is why the “firm assurances of cooperation” by the US and other unnamed countries is in principle to be applauded.

Nevertheless, it has to be stressed that the way jurisdictions like the US keeping stolen funds respond in practice to requests for technical and financial assistance suggests that the promise of cooperation should be taken with a pinch of salt. For example, the US and the UK have not shown sufficient political will to cooperate in the repatriation of the funds looted by the late Gen Sani Abacha. Although often touted as a “success story”, only a small part of the Abacha funds have actually been repatriated by the UK and Switzerland. France even failed to execute a letter of request for mutual assistance on the rather flimsy grounds that it was drafted in English!

Therefore, to make sure that the US and other countries fulfil their promises to cooperate, the Buhari government can make the best use of progressive rules on asset recovery as contained in the UN Convention against Corruption which the US ratified on October 30, 2006. The UNCAC for example makes it obligatory for states to exchange information and take measures to facilitate the full return of funds to the countries from which they were stolen.

Yet, the use of the UNCAC may not necessarily guarantee success in securing the cooperation of financial centres without the requisite political will to observe the rules on international cooperation and assistance. Experience has indeed shown that while many countries including the US, the UK (and Nigeria) have ratified the UNCAC, the convention is rarely effectively implemented by financial centres in Europe and North America.

In essence, recovery of stolen funds still largely depends on the goodwill of the states where the funds are located. Therefore, the Buhari government would need to make a strong case on why it is in the public interest of the US to facilitate recovery of stolen funds by Nigeria, as the US (and other countries) won’t cooperate if cooperating with Nigeria is deemed harmful to its public or economic interest.

However, Nigeria is not entirely left to the political whims and caprices of the financial centres. One way Buhari can deal with the cases of unwilling or uncooperative financial centres and off­shore havens is to consider, first, the possibility of judicial intervention through the mechanism of the International Court of Justice (already con­templated under Article 66 of the UNCAC as a means of resolving disputes among states parties). Second, in cases of jurisdictions that persistently violate rules on international cooperation regarding asset recovery, the government should work with friendly countries to put pressure on the international community to consider imposing heavy political and economic sanctions against those jurisdictions.

Although not an international court, the OECD mechanism allows non-members like Nigeria to make a request to its Working Group on Bribery or to its Secretary General. The Buhari government can take full advantage of this mechanism by requesting the Working Group and the Secretary General to include the government’s asset recovery initiative on their “Tour de Table”.

Dr Olaniyan is the author of ‘Corruption and Human Rights Law in Africa’