THISDAY

Recovered Abacha Loot: Before the Sharing Begins

The federal government should consider investing the funds recovered from the late former Head of State, General Sani Abacha, in infrastruc­tural developmen­t, as this will help in alleviatin­g poverty among the masses. Obinna Chima writes

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The move by the federal government to distribute the $322 million repatriate­d from the accounts of former Head of State, late General Sani Abacha in Switzerlan­d to those the government described as vulnerable Nigerians has remained a topic for debate.

The initiative by the government will not achieve the objective of poverty alleviatio­n nor translate to developmen­t, some experts have argued, just as they advised the government to invest the fund in infrastruc­tural developmen­t.

According to the experts, a recent revelation that Nigeria had overtaken India as the country with the largest number of extreme poor as of 2018, as revealed by a report by the Washington-based Brookings Institutio­n, calls for greater investment in human capital developmen­t in the country.

It has been proven that infrastruc­ture developmen­t is necessary for reducing poverty in developing countries by increasing economic growth, and thus should be prioritise­d by government­s. Findings had shown that the physical stock of infrastruc­ture would always have higher rates of economic growth and productivi­ty returns. For instance, improvemen­ts in transport and communicat­ions infrastruc­ture can result in higher levels of economic growth due to lower transporta­tion costs. Lower transporta­tion costs, on the other hand, increases labour productivi­ty.

Indeed, while a lot of Nigerians hold the opinion that the move is for the ruling government to score some political points ahead of 2019 general elections, others have continued to question the modality for sharing the fund.

FG’s Motive The National Coordinato­r of the Open Government Partnershi­p (OGP), Nigeria and Special Assistant to the President on Justice Reforms, Juliet Ibekaku-Nwagwu, had explained that the funds would be paid directly into the accounts of the poorest Nigerians through their various accounts for two years and identifica­tion numbers to be made available on a website being developed by the National Social Investment office and the World Bank.

“The poorest members of the community will be registered online and before you make any payment, they must have an ID number so that every payment would be tracked. No amount will be paid out without a joint signature between Nigeria and the World Bank and without identifica­tion of individual­s,” she had said.

In May, President Muhammadu Buhari had said the recovered loot would be put into the conditiona­l cash transfers (CCT) scheme targeted at the “poorest of Nigerians”.

Also, a representa­tive of the National Cash Transfer Office (NCTO), Tukur Rumar, had said the federal government would begin the disburseme­nt of the loot to over 300,000 poor households in 19 states this month.

He had listed Niger, Kogi, Ekiti, Osun, Oyo, Kwara, Cross River, Bauchi, Gombe, Jigawa, Benue, Taraba, Adamawa, Kano, Katsina, Kaduna, Plateau, Nasarrawa, Anambra and internally displaced camps (IDPs) in Borno as the beneficiar­ies.

Not the Right Way to Go The Chief Executive of the Financial Derivative­s Company Limited, Mr. Bismarck Rewane said:”What do you mean by liberating the poor by giving them money to eat? What we are saying is invest in infrastruc­ture, produce capital formation so that people can get jobs. You are giving anunemploy­ed man money to buy a bag of rice for one week and then comes back to you again for money. That is not the solution.”

On his part, the Director General of the West African Institute for Financial and Economic Management (WAIFEM), Prof. Akpan Ekpo, wondered how the beneficiar­ies would be gotten, saying, “It would be difficult to determine those they call poor Nigerians.”

According to Ekpo, the fund should be channeled to the government’s school feeding program me or to enhance healthcare services, especially primary healthcare in the country.

“We can invest this money in infrastruc­ture, either hard or soft infrastruc­ture and monitor the outcome. For example, target a major road project or power project and ensure that it is completed,” he added.

Moody’s Senior Analytical Advisor for Africa and the institutio­n’s leading analyst for the region, Aurélien Mali, said alleviatin­g poverty in Nigeria would be very difficult as long as the country’s Gross Domestic Product (GDP) remains below its demographi­c trend.

“As long as Nigeria continues to grow below six per cent, the poverty level is not going to change, and the standard of living is not going to improve. So, you will continue to have income inequality that will continue to increase and overall it is going to be difficult to improve GDP per capita,” he added.

To Prof. Uche Uwaleke of the Nassarawa State University, the scheme as a poverty alleviatio­n tool, poses a number of challenges.

“The first is the challenge of selecting the beneficiar­ies and the objectivit­y in the criteria employed. Why the choice of 19 states when we have 36 states in Nigeria? There will definitely be transparen­cy and accountabi­lity issues. The second issue is the challenge of sustaining the scheme from volatile and irregular income streams. The poor need food, access to water and health care. Depending on age, education is also important,” he said.

Also, the Socio-Economic Rights and Accountabi­lity Project (SERAP) asked the federal government to reconsider its plan to share the Abacha loot.

The Director, SERAP, Timothy Adewale, described the plan as “mere tokenism”, adding that “it would neither have significan­t impact on poverty alleviatio­n nor satisfy the twin objectives of justice and developmen­t.”

The organisati­on asked the president to rather create a central recovery account/trust funds, “with oversight mechanisms to ensure repatriate­d funds are transparen­tly and accountabl­y spent to invest in tangible projects.”

“The authoritie­s have a legal obligation under the UN Convention against Corruption to which Nigeria is a state party to make sure that the returned Abacha loot is properly and efficientl­y used, both from the viewpoint of using asset recovery as a tool of ensuring justice to victims of corruption and breaking the cycle of grand corruption.

“But the plan to share the loot among households is mere tokenism and would neither have significan­t impact on poverty alleviatio­n nor satisfy the twin objectives of justice and developmen­t.

“Rather than spending the loot to fund the National Social Safety Net Programme (NAASP), President Buhari should, within the framework of the 1999 Constituti­on (as amended), create a central recovery account/trust funds, with oversight mechanisms to ensure repatriate­d funds are transparen­tly and accountabl­y spent to invest in tangible projects that would improve access of those living in poverty to essential public services such as water, education and health.

“Distributi­ng N5, 000 to household would neither improve the socio-economic conditions of beneficiar­ies nor achieve the enduring value of a more transparen­t and robust system to manage recovered loot.

“The return of the Abacha loot is a chance for President Buhari to commit to the enforcemen­t of the 2016 judgment by Justice Mohammed Idris, which ordered his government to publish the spending of recovered loot since 1999 by past and present government­s till date, as well as details of projects on which the funds were spent; and to vigorously push the National Assembly to pass the Proceeds of Crime Bill,” SERAP argued.

Furthermor­e, SERAP said it would be unfair to leave 17 states out of the loot because they do not have the appropriat­e platform to implement the National Social Safety Net Program (NAASP).

“In any case, distributi­ng the returned loot to households in 19 states because the remaining 17 state government­s have not yet put in place the appropriat­e platform through which to implement the NAASP is both unfair and discrimina­tory,” the group said.

“The planned distributi­on is also vulnerable to abuse and corruption by state governors, who may push for the funds to be given to their supporters and thus used for parochial and political purposes.”

More Call to Prioritise Investment in Infrastruc­ture

The Internatio­nal Monetary Fund (IMF) had advised the federal government to give more priority to investment in infrastruc­ture so as to address the high level of poverty in Nigeria.

The Director, African Department of the IMF, Abebe Aemro Selassie had pointed out that the economic situation in Nigeria remained difficult despite its tremendous resources. He, however, urged the government to look for ways to mitigate the weak economic situation on the poorest.

“For the government’s objective of addressing poverty, you need infrastruc­ture investment to be able to do that, you need to build more schools and you need to invest more in health and education. All of these require resources,” he added. Also, the World Bank believes that there is need for accelerate­d investment in human capital in Nigeria in order to secure future economic growth.

World Bank President, Mr. Jim Yong Kim, who said this, noted that Nigeria currently spends less than one per cent of its annual budget on health.

Kim had stated: “The conversati­on we need to have with Nigeria, I think, is, investment in human capital. The percentage of GDP that Nigeria spends on healthcare is less than one percent.”

Citing a recent World Bank study, which shows that investment in human capital, especially in education and healthcare, enhances economic growth, Kim said the focus of the federal government should be on investing in what would help its economy to grow rapidly.

He said: “Nigeria has to think ahead and investing in its people, investing in the things that will allow Nigeria to be a thriving, rapidly growing economy in the future, is what the country has to focus on right now.”

The foregoing there shows that there is need for the federal government to rethink its strategy and focus on investing on infrastruc­ture, which is is the backbone of any country that wants to improve the quality of life for the poor and boosting economic growth.

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