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Factsheet December 4, 2017

World Bank Monitoring of Repatriated Abacha Funds

Latest developments

Following a series of negotiations between the Federal Government of Nigeria and the Government of Switzerland, the Swiss government will restitute $321 million of funds illicitly acquired by the family of the late Former President of Nigeria General Sani Abacha.

In December 2014, a Swiss court ruled that the Swiss government should repatriate the funds on condition that the World Bank would monitor their use.

The Nigerian authorities requested the funds be used to support a program of targeted cash transfers to poor and vulnerable Nigerians under the National Social Safety Net Project financed by a credit extended by the International Development Association.

On December 4th, 2017, the Federal Government of Nigeria, the Swiss Federal Council and the World Bank signed a Memorandum of Understanding (MOU) capturing the tripartite agreement on the World Bank’s monitoring role and the modalities of the funds repatriation and disbursement.

While the World Bank’s role is limited to monitoring the use of the funds, the responsibility for the use of the funds is with the Federal Government of Nigeria.

The parties have agreed to establish a monitoring framework for the use of the repatriated funds that will enhance transparency and accountability. To that end, the Federal Government of Nigeria will engage civil society organizations to help monitor the use of the funds.

In 2006, the World Bank was involved in a similar effort providing institutional support for the sustainable use of repatriated funds from Switzerland amounting to approximately $723 million, which was illicitly acquired by the late General Sani Abacha’s family.

How does this differ from the role the World Bank played in 2005 when Swiss courts authorized the repatriation to Nigeria of funds deposited by the Abacha family in Switzerland?

In 2005-2006, the funds were returned directly from Switzerland to the Nigerian Government, and were programmed into the national budget and utilized by the Nigerian government in line with its National Economic Empowerment and Development Strategy (NEEDS).  At that time, at the request of, and in agreement with the Nigerian and Swiss Governments, the World Bank carried out an ex-post analysis on the use of the repatriated funds, particularly in terms of the contribution for these funds to NEEDS.  The Bank analysis took a two-pronged approached looking at general budget expenditure trends at the macro level while also conducting a field survey of randomly selected projects funded under the budget program.  Our role was limited to analyzing spending of repatriated funds after they were disbursed. We had no role in supervising the implementation.

In the current case, the $321 million in funds being returned will be applied to the National Social Safety Net Project, which is financed by a credit extended by the International Development Association (the World Bank’s concessional lending arm). The Bank will monitor the use of the funds in the same manner as it monitors the use of the IDA Credit.

In addition, in order to provide independent monitoring of the use of the funds, Nigerian CSOs under the umbrella of the Network on Asset Recovery (NAR) made up of civil society organizations with expertise in anti-corruption and asset recovery will monitor the use of the funds for cash to beneficiaries and provide bi-annual reports on the use of the funds.

How was the monitoring under the Abacha fund repatriation in 2005-2006  carried out?

The field monitoring survey was undertaken by a group of 20 field monitors representing six federal ministries and various Nigerian CSOs. This study was summarized in a report published in December 2006. This document is available on the World Bank’s website. At no point did our report suggest that a substantial part of the funds looted were missing or had been misused.

Why did the World Bank only carry out an ex-post review?

The parties (the Federal Government of Nigeria, Swiss government, and World Bank) agreed to this approach as a detailed review of every expenditure would have been prohibitively expensive – negating the development impact of the returned funds.

On November 24, 2015, in response to an “Access to Information ” request from Socio-Economic Rights and Accountability Project (SERAP), a Nigerian civil society organization, the World Bank provided extensive documentation regarding the Bank’s role in monitoring the use of funds returned to the Nigerian government from Switzerland. The documents, totaling over 700 pages, were already in the public domain on the World Bank’s website. On February 8, 2016, the World Bank received an Access to Information appeal from the same organization. After a thorough and lengthy review, the World Bank did not identify any information that was responsive to the request.

What is the World Bank doing to help countries like Nigeria recover stolen assets?

Through our partnership with the UN Office on Drugs and Crime on the Stolen Asset Recovery (StAR) Initiative, we are providing advice and helping countries recover stolen assets. The core of StAR’s work lies in country engagements that aim at building the capacity of the various stakeholders engaged in asset recovery and facilitating international cooperation on asset recovery cases. Country engagement programs are generally longer-term, and delivered using mentors, advisory services and training.

In December 2017, StAR provided organizational support for the Global Forum on Asset Recovery, which was hosted by the governments of the United States and the United Kingdom. This forum addressed the importance of strong political commitment and collaboration among practitioners, focusing on assistance to Nigeria, Sri Lanka, Tunisia, and Ukraine as first priority countries.

The World Bank is also actively working with countries to strengthen transparency and accountability and to reduce illicit financial flows. We are working to improve access to information on beneficial owners for public authorities and strengthen the exchange of tax information. We are also helping governments build systems for asset disclosure by public officials and to protect against money laundering. These efforts to build transparency and accountability also aim to ensure that clean public officials and business are recognized, while corrupt and criminal ones are sanctioned.