Nigeria’s Minister for Foreign Affairs, Geoffrey Onyema, announced on Monday that Nigeria is in talks with several countries to return money stolen under the late Nigerian dictator, General Sanni Abacha’s regime. From 1993 to 1998,

Nigeria's Minister for Foreign Affairs, Geoffrey
Onyema, announced on Monday that Nigeria is
in talks with several countries to return money
stolen under the late Nigerian dictator, General
Sanni Abacha's regime. From 1993 to 1998,
Abacha allegedly stashed away $5 billion in
different western nations including Switzerland,
United Kingdom and the United States.
Over the past decade, these nations have
returned approximately $1 billion dollars in
total to the country from accounts that belonged
to Abacha. However, Switzerland has only
recently shown its preparedness to return $300
million this year after $380 million was
returned last year .
In light of unusual interest rates in
Switzerland's banking sector at the moment,
Ventures Africa spoke with Kemi Akinde, the
Chief Economic Officer of Meristem Securities
Limited, to find out if there is a relationship
between these interest rates and Switzerland's
preparedness to return Nigeria's money.
Ventures Africa (VA): Is the Swiss Central
Bank obligated to release Abacha's loot
with interest to Nigeria?
Kemi Akinde (KA): There is no obligation by
the Switzerland government to release the loot
with interest. Obligation will arise out of a
mutually agreed stance which will be legally
binding but, this is not the case. The accounts
where these funds have been frozen hitherto, so
'technically' they did not enjoy the liquidity to
earn yields. The repatriation of the funds came
at the conclusion of the comprehensive
agreement between the Federal Government of
Nigeria and the Abacha family in July 2014 and
there was no negotiation with any Swiss bank
on a rate on the funds. So it makes sense to
make recourse to the Swiss National Bank rate
which was 0 percent then and it dropped to
-0.75 percent in 2015. So, technically, we should
be getting a discount to face value. In summary,
there is absolutely no obligation to pay interest
on the funds.
VA: Nigeria received some of Abacha's loot
from Switzerland last year and will be
receiving some more this year. Could the
Swiss government's readiness to return stolen
money be related to its new and
sudden interest rates, considering that the
original plan to return money was every 10
years?
KA: Ironically, their current yield environment
is even an incentive for them to hold on to the
funds since there is a charge on it. It seems they
are being generous to Nigeria by returning the
money.
VA: Would that amount of money (about $300
million) have any effect on Nigeria's
economy, especially its current foreign
exchange rates?
KA: $300million will have an effect but when
placed in the context of an over $500billion
economy and $30billion budget, we shouldn't
be too optimistic. The loot is inconsequential to
the exchange rate. By the way, in the defense of
the currency, the CBN has released $332million
so far in Forex reserve in 2016, which are less
than ten business days. Putting this in
perspective, the $300million recovered loot is
no solution. The Forex issues currently plaguing
the country are rooted in deep structural
misalignments to which monetary policy is
constrained in resolving, considering its policy
toolkit. It can only kick the can down the road
until the structural issues are addressed on the
fiscal side.

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