Nigerian Elites Beware As Illicit Overseas Assets Take Centre Stage in Russia/Ukraine War

Nigerian Elites Beware As Illicit Overseas Assets Take Centre Stage in Russia/Ukraine War
March 12, 2022 admin

No Nigerian can fail to have been moved by the scenes of carnage coming out of Ukraine following the cruel and cowardly Russian invasion.

But there are lessons our nation must learn from this horrific situation too.

The international response to Russian aggression has by and large not been military, but economic.

Russia has been hit by severe sanctions designed not to attack her army, but to hobble her economy – an indication future wars may be fought not on the battlefields but on the international financial markets.

And while Russia seemingly holds a military advantage over Ukraine – despite the heroism of the Ukrainian people – it is getting destroyed economically.

An international alliance has cut off some Russian banks from the SWIFT messaging system, used to facilitate trillions of dollars worth of international financial transactions every day, in what has been called “the nuclear option” of sanctioning.

They also promised to prevent Russia from accessing some of its foreign reserves. To put that in layman’s terms, Russia has gone to the bank and found its saving account empty.

When the stock market opened for the first time after the penalties were imposed, the value of Russia’s major banks halved almost instantly and the Rouble lost 30% of its value, making it much more expensive for Russian to trade – if indeed they can find anyone to trade with.

To combat inflation, the Russian Central Bank doubled its key interest rate to 20%. That’s higher than America’s equivalent rate has been in all of its histories.

But what does this have to do with Nigeria?

A British parliamentary inquiry reported in 2018 that “despite the strong rhetoric, President Putin and his allies have been able to continue ‘business as usual’ by hiding and laundering their corrupt assets in London”

Hiding illicit assets overseas you say?

This may sound very familiar to Nigerians.

As part of the international response to Russia’s aggression, Russian elites have seen their overseas assets targeted too – which may be why Roman Abramovich suddenly seems so keen to sell Chelsea.

The message is clear. If you try to hide dishonestly or illegally gained money overseas, there is no place to hide. And if your country finds itself embroiled in an international dispute, you may find yourself a target.

Russia is far from alone in seeing its very wealthy hide their wealth as far from home as possible.

In recent days, leaks from the Credit Suisse Bank have shown how comfortable the Swiss Bank was in having Eduard Seidel as a client.

The German was convicted of bribery in 2008 after overseeing a campaign of industrial-scale bribery to secure lucrative clients for his employer by shoveling cash to corrupt Nigerian politicians.

That leak follows last year’s so-called Pandora Papers leak, which pointed the finger at a number of high profile Nigerians – including current and former state governors, past and present lawmakers, and even a senior judge –for setting up shadowy shell companies in notorious tax havens to hide their wealth. That leak suggested that powerful Nigerians have bought UK property valued at £350m using 166 offshore companies.

The Ukraine situation has highlighted this issue. Soon there may be no hiding place for those who hide their wealth overseas. And if not in the national interest, our elites need to consider acting in their own self-interest when it comes to transparency and accountability.

But politicians need to take the same steps towards transparency and accountability too.

At the digital democracy campaign I lead, we have been trying to give them the tools to build back the trust and both their reputations and that of our entire political system and to make all their financial interests publically accessible.

We have created a free mobile app called Rate Your Leader, which was designed to reconnect electors and the elected, opening direct channels of communication between people and to their elected officials – giving local people the kind of access previously only enjoyed by funders.

Rate Your Leader encourages politicians to explain the decisions they have made and the reasons for making them directly to the people they affect. If the voters don’t like the answer they get, they can rate their politicians badly.

In the UK, a new Economic Crime Bill developed in response to Russia’s invasion of Ukraine will include a new register that will mean foreign owners of UK property must declare and verify their identities with the state.

That register will include Nigerians too.

This week the UK also signed another agreement relating to compensation for corruption in the Nigerian Energy sector.

The net is closing in on international corruption, and current international events are just making that net tighter. We now need to do our bit at home.

1 Comment

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