WASHINGTON: Not an email: Ex-Nigerian dictator's assets frozen - Nation Wires - MiamiHerald.com

BY KEVIN G. HALL

MCCLATCHY WASHINGTON BUREAU - Miami HERALD

Gen Sani Abacha

WASHINGTON -- The Justice Department said Wednesday it has frozen $458 million in corruption-derived assets from  accounts belonging to Nigerian dictator Gen. Sani Abacha and sought forfeiture of more than $550 million stashed across the globe.

The complaint in U.S. District Court in the District of Columbia was based on an FBI investigation and also names the general’s son Mohammed Sani Abacha and associate Abubaker Atiku Bagudu. The three are accused of embezzling public funds amounting to billions of dollars from the oil-rich country, in three different criminal schemes.

Justice officials described Wednesday’s move as the “largest kleptocracy forfeiture action brought in the department’s history.” The action was part of a broader initiative to discourage corruption proceeds from being laundered in the United States. Why the complaint comes now wasn’t immediately clear.

U.S. bank operations listed in the complaint, all in New York but not the subject of the complaint, include: ANZ Banking Group; Bankers Trust Company; Barclays Bank; Citibank ; Chase Manhattan Bank; Chemical Bank;  AG; Marine Midland Bank; HSBC USA; and Morgan Guaranty Trust Company, which later became JP Morgan Chase.

Abacha is a controversial figure in Nigeria, where he led a military regime that ruled from his coup 1993 until his death in office in 1998. He presided during a time of low oil prices, so the country’s economic growth came from a wider opening to private investment and market forces. He also used Nigeria’s military to help quell unrest in Sierra Leone and Liberia.

But the dark side of the Abacha regime was revealed in the complaint for forfeiture of funds

Under one scheme, Gen. Abacha allegedly got Nigeria’s central bank to disperse what are called security votes, essentially funds to be used for purposes of national security. Instead, those funds were moved overseas to accounts in Switzerland, Great Britain and through banks in the United States.

Another alleged scheme involved the general and his finance minister, Anthony Ani, buying back distressed Nigerian government debt at inflated prices from a company controlled by Bagudu and Mohammed Abacha. The windfall was more than $282 million, the Justice Department said.

The third alleged criminal effort involved extortion of more than $11 million from a French company with a Nigerian affiliate involved in government contracting.

Proceeds from the alleged national security funds fraud were pooled into bank accounts in London, then used to purchase dollar-denominated Nigerian bonds, generating hundreds of millions of dollars in interest payments.

U.S. banking behemoth Citibank administered the interest rate payments, which amounted to lending stolen money to generate huge profits.

Most of the money sought by the Justice Department belongs to entities registered in the British Virgin Islands, Great Britain, France and the Bailiwick of Jersey. About $287 million is being held by Deutsche Bank International Ltd. in Jersey; another $12 million is accounts administered by HSBC Fund Administration in Jersey; and another $144 million is located at Banque SBA in Paris.

Some of the fictitious companies the group established outside Nigeria had accounts with Goldman Sachs in Zurich, Switzerland.

Read more here: http://www.miamiherald.com/2014/03/05/3975962/not-an-email-ex-nigerian-dictators.html#storylink=cpy

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Barclays Africa Beats Peers After Abstaining From Loan Chase

By Renee Bonorchis  Feb 20, 2014

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Barclays Africa Group Ltd. (BGA) is outperforming its South African peers for the first time in three years after backing out of a chase for market share in unsecured lending helped stem bad loans and boost profit.

The bank is the only stock on the six-member FTSE/JSE Africa Banks Index to show gains this year through yesterday’s close, rising 1.5 percent, compared with the gauge’s 7 percent decline. Even so, it’s still the cheapest lender, trading at 8.8 times estimated earnings against an average of 11 times for its three largest competitors, including Standard Bank Group Ltd. (SBK) at 11.4, according to data compiled by Bloomberg.

Barclays Africa “avoided unsecured lending, so it could be seen as a defensive stock as the economy takes a downturn,” Johann Scholtz, head of research at Afrifocus Securities Ltd. in Cape Town, who has a buy rating on the stock, said by phone on Feb. 18. “Levels of profit should now be ahead or in line with the leaders in its sector. Barclays (BARC) Africa is undervalued relative to its peer group.”

Loans not backed by assets surged fourfold in the three years through 2012 as lenders includingFirstRand Ltd. (FSR) and Nedbank Group Ltd. (NED) joined a rush by African Bank Investments Ltd. (ABL) and Capitec Bank Holdings Ltd. to add customers as mortgages stagnated. One in every two South Africans with credit are behind on payments, according to the National Credit Regulator, amid the slowest economic expansion in five years, faster inflation and unemployment of about 25 percent.

Photographer: Dean Hutton/Bloomberg

A sign for Absa Bank Ltd. and Barclays Plc stands on display at the company's offices,...Read More

African Acquisitions

Barclays Africa dropped 0.9 percent to 133 rand by the close in Johannesburg trading, extending its decline over the past 12 months to 15 percent. Nedbank, the Johannesburg-based lender owned by Old Mutual Plc, fell 0.5 percent to pare its gains over the past year to 4.9 percent. FirstRand, the second-largest South African bank, has climbed 3.4 percent over the period. BarclaysAfrica reported a 20 percent increase in full-year net income on Feb. 11, the first of South Africa’s biggest four lenders to release earnings.

“Barclays Africa is also trading at a discount on a price-to-book basis when compared to its peers,” Jean Pierre Verster, who helps oversee the equivalent of more than $1.1 billion at 36ONE Asset Management in Johannesburg, said by phone yesterday. “Its financial results highlighted its level of comfort with its very conservative strategy. As interest rates increase, there will be lots of stress in the unsecured lending market.”

Missed Trick

Barclays Africa, which bought eight African operations from its U.K. parent last year, plans to expand its corporate- and investment-banking businesses across the continent. In South Africa, the company’s Absa Bank unit is stepping up lending after being toppled three years ago as the nation’s largest provider of home loans and losing customers after tightening credit criteria since 2010.

“It’s had anemic revenue growth out of its core franchise, but amid the negativity people may have missed a trick,” Scholtz said. “They didn’t have a true sense of the companies it bought from Barclays -- some are very profitable.”

Steps to slow lending will pay off, Chief Executive Officer Maria Ramos said Feb. 11, as Barclays Africa predicts more interest-rate increases in South Africa after the Reserve Bank unexpectedly lifted its benchmark rate 50 basis points to 5.5 percent on Jan. 29. Still, only 22 percent of analysts rate the stock a buy, compared with 47 percent at Nedbank, South Africa’s fourth-biggest bank, 40 percent for FirstRand and 28 percent at Standard Bank, the largest African lender.

“We’ve been buying” Barclays Africa shares for the last two weeks, Verster said. “There’s a window of opportunity.”

To contact the reporter on this story: Renee Bonorchis in Johannesburg atrbonorchis@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

African solutions to African challenges

By NGOZI OKONJO-IWEALA

Corruption, high start-up costs, poor infrastructure, incoherent regulation and weak governance – these are the oft-cited barriers to foreign investment and regional integration in Africa.  But this storyline is rapidly changing.

With recent increases in the disposable income of the citizenry, demographic trends favouring new entrants to the workforce, urbanisation – and with that, the diversification of incomes outside of traditional, rural sectors – Africans are turning inward, investing at home and setting the trend for how future business will and should be conducted on the continent. Sustainable business solutions are helping to underpin this encouraging trend.

No one wants to do business in an unpredictable environment and African investors are just as discerning and cautious as their international counterparts. But with a closer vantage point, perhaps we see the opportunities more clearly.  

Togo-based Ecobank Group, supported initially by the Ecowas fund, was one of the first to focus on cross-border expansion to “Middle Africa,” then dominated by foreign and state-owned banks. The company now provides financial services in 33 African countries with assets valued at $19bn. Others like United Bank of Africa are following suit. According to Ernst & Young’s Africa Attractiveness Survey, Nigerian and South African FDI flows to other African countries are over $1bn each, and growing. Over the last decade, Kenya Commercial Bank (KCB) Group investments were higher than multinationals such as Coca Cola, Total, French cement conglomerate Lafarge and beer maker SABMiller among others, ranking it among the top five investors on the continent.

This burgeoning phenomenon runs contrary to our historical trade patterns, which have tended strongly toward the export of raw materials both to the West and to the East. Despite sustained GDP growth over the past decade, the vast majority of the population does not experience any ‘trickle-down’ benefits. The frustration is growing; Africans are creating their own solutions. The focus on value-added processing before domestic or international sale; service-oriented businesses for the growing consumer class; and expansion into neighbouring countries with similar legal or socio-cultural practices to achieve economies of scale are all clear indications of movement towards more sustainable growth.  And, when companies engage in sustainable business practices, this also helps support intra-African trade, enabling companies to build scale quickly by tapping international capital and expanding regionally and outside of Africa.

We’re also being creative about addressing market failures and taking the initiative to better place our development partners’ monies in order to catalyse sustainable new opportunities for the private sector. For example, African agriculture – a sector attracting both domestic and international investors – is particularly exposed to the vagaries of the weather. Every time we have a severe drought or flood, lives are lost, assets are depleted, and development gains suffer major setbacks – forcing more people into chronic destitution and food insecurity in the world’s least developed countries.

We rely on cost-ineffective ad hoc charity for each disaster, while developed countries use insurance-like risk management systems. So why don’t we?

African Union member states have bonded together to create the African Risk Capacity (Arc), a ground-breaking extreme weather insurance scheme designed to model and price Africa’s weather risk – where the private sector failed to invest.

The Arc is a disruptive innovation, which aims to create a new market and value network not only for the global (re)insurance industry, but also for capital contributors interested in protecting investments in the continent’s agricultural sector. By utilising modern risk management techniques to protect investments and accumulated assets, Arc aims to contribute toward building resilience among vulnerable populations, promoting fiscal stability by preventing budget dislocation, and increasing productivity and economic diversification in some of the world’s fastest growing economies.

It is sustainable business ventures like the Arc and others that pave the way to an improved investment environment on the continent. And shortly, we expect that this trend will crowd in other investors, both continental and international, at an accelerated pace. As we cease to rely exclusively on extractive industries, we can focus rather on the rising and powerful consumer class to fuel the continent’s more sustainable growth.

NgoziOkonjo-Iweala is Nigeria’s coordinating minister for the economy and former managing director at the World Bank