Diezani’s “Multibillion Dollar Haul” and numerical illiteracy in Nigeria
I once had a conversation with someone who used to have a working relationship with Nigeria’s former petroleum minister Diezani Alison-Madueke when she was in office. There was a throwaway comment he made that never left my mind for some reason, until events from last month made it clear why it was a significant statement. He said that she would always tell him that dipping hands into government funds is completely off limits and unacceptable, but it was possible to accept gifts from contractors and people who wanted favours.
In other words, what she inadvertently revealed was that while she considered outright embezzlement to be outrageous, she had less of an ethical problem with “gifts.” Or kickbacks, as they are otherwise known. With this context, I was able to make sense of last month’s news report involving the testimony of a former Glencore PLC trader about the practise of “tipping” Diezani and other senior officials with $300,000 payments to secure oil lifting contracts and high grade oil cargoes. Apparently, she did not in fact steal government funds. She did however, use her position to extract financial favours from contractors, which is to say, six and half a dozen.
The problem however, is that the testimony of Anthony Stimler made it clear that the figures involved in this grand kickback scheme were more in the 6-8 figure USD range. These were huge sums of money to be sure, but they do not in any way match the humongous sums that have become established pieces of Nigerian popular culture. I decided to write this column a couple of weeks ago when Senator Muhammad Kazaure appeared on television to proclaim with zero irony, that Diezani’s “$60bn loot” should be repatriated and “used to fund the budget instead of borrowing.”
Please stop murdering numbers
There are two major problems with Senator Kazaure’s position, and I will start with the first one – where on earth do these numbers get pulled out of? Shortly after Muhammadu Buhari’s initial election in 2015, there was an even more incredible story about Diezani’s alleged “$90bn loot” being “returned to Buhari.” Surprisingly, this mathematical impossibility, supported only by a very poorly photoshopped image of a news broadcast made the rounds even within supposedly enlightened Nigerian society. I distinctly remember Femi Falana’s son, Falz The Bahd Guy – a British educated lawyer with an LLB and an LLM – amplifying this yarn in a social media skit at the time.
This figure later became $50bn and $32bn before rebounding to $60bn. I do not believe that one needs to be a journalist before making it a habit to reflexively require evidence or documented data before believing and repeating claims that are this unbelievable. For one thing, Nigeria has never at any point in its national history, had an annual budget of $40bn, much less $50bn or $60bn. The money simply does not exist – there is no $60bn anywhere in Nigeria. There might be $60bn worth of economic value to be found in the Nigerian economy, but I’m sure the reader can see the logical impossibility of liquidating 12.5 percent of Nigeria’s annual GDP, much less “stealing” it.
Public figures like Senator Kazaure have been able to get away with these crimes against data and mathematics for decades, because the “educated” class also loves to engage in these politically motivated games. To be clear, I am not suggesting that Diezani Alison-Madueke is not guilty of corruption – the evidence manifestly indicates that she is, to a great extent. The point is that “great extent” in Nigeria’s context, means that – as Mr Stimler testified – she would get a $200,000 payment here and a $50,000 payment there. Over the course of her tenure, these payments at a stretch could amount to 60, maybe 100 million. Not “billion.” A billion dollars is one million dollars in a thousand places. The total capitalisation of the entire Nigerian banking system as a whole is barely $50 billion.
Throwing around absurdly false and nonsensical figures not only makes a mockery of anti-graft processes and debases the political engagement process, but it also serves to let the actual perpetrators off the hook. If instead of going after corrupt public officials for receiving a few million dollars worth of kickbacks, the noise rather focuses on fantastical sums of money that they definitely could not have stolen without violating the laws of mathematics, then once they exonerate themselves of these manifestly absurd claims, even a successful prosecution for the actual graft becomes a pyrrhic victory.
Please learn how global finance works
The other problem with positions like that expressed by Senator Kazaure is that they betray a deep lack of understanding about how global finance and the monetary system works. This position gives off the idea that somehow, it is possible to move 60 BILLION UNITED STATES DOLLARS across the global financial system, as though it were a simple case of moving N60,000 from Zenith Bank to Wema Bank. For the avoidance of doubt, this is absolutely NOT how it works. Global finance is infinitely more complicated than that.
First of all, any transaction carried out using US dollars is legally subject to authorisation from the US Treasury Department. There is a reason that drug dealers and other underworld denizens prefer to use cash when laundering dirty money. Every time any individual anywhere on earth carries out a USD transaction above a certain threshold (usually $10,000 in one day), someone at FinCEN or FINRA gets an email. “America will know” was not just a humorous presidential meme – it was a statement of absolute fact.
The process of transferring $1 million across jurisdictions requires vast amounts of paperwork and regulatory compliance. Without proper compliance, that $1 million will sit in limbo until the banking authorities are satisfied with the paperwork. What is more, institutions like the Bank of International Settlements and the New York Federal Reserve act as regulatory bottlenecks that make it extremely difficult to squeeze unexplained money past. $1 million might just about squeak past if handled carefully and in very small pieces. $100 million will almost certainly require some degree of security clearance to be approved.
$1 billion? With 9 zeroes? That is literally and with no irony, a sovereign event. There has to be agreement at sovereign levels for that kind of money – potentially enough to destabilise a country – to move across jurisdictions. In other words, it is simply not possible to sneak such money around the world in 2021. And don’t bother with cryptocurrency either, because all crypto exchanges that offer bridges to fiat currency have strict KYC and AML compliance. So even if one could magic 60 nonexistent billion dollars into existence in a country whose banking sector capitalisation is less than that sum, one would have to keep that money in that country because moving it would be essentially impossible.
Bonus point: There is no pile of “looted money” somewhere waiting to save Nigeria from its budget deficit. So that N65,000 that apparently every Nigerian man, woman and child owes?
Best get to work paying our “gbese.”