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Nigeria Debt Deal Called Corrupt

December 3, 1998

LAGOS, Nigeria (AP) _ Two former cabinet ministers and a family member of ex-dictator Gen. Sani Abacha defrauded Nigeria of about $2 billion by buying and reselling debt payments on a Russian-built steel plant, Nigerian officials said.

The fraud allegation is just the latest in a string of similar accusations linked to Abacha, whose wealth was estimated at $3 billion to $6 billion when he suddenly died in early June.

Mohammed Haruna, the chief press secretary to head of state Gen. Abdulsalami Abubakar, said Tuesday that the Abacha family member and the ministers _ none of whom were named _ committed the fraud through debt payments owed to Russia for the unfinished Ajaokuta steel plant in northern Nigeria.

Construction on the plant, which is said to have cost $5 billion, began in the early 80s and has yet to be finished. It has become a symbol of waste, mismanagement and government corruption.

The company purchased about $2.5 billion in debt owed to Russia by Nigeria at a heavy discount _ paying about $500,000. The company then resold the debt to Nigeria at its face value, pocketing the remaining $2 billion, Haruna said.

``It is a matter of days that this money will be recovered,″ he said, declining to go into further details.

The announcement of the alleged steel plant fraud comes just a few weeks after officials announced that Abacha’s family had repaid the government more than $750 million in illegally amassed state funds.

During his five-year military dictatorship, Abacha diverted hundreds of millions of dollars in government funds to his personal accounts.

The government has put pressure on Abacha family members to return the money, confiscating the passports of Abacha’s wife and some of his children, and keeping some family members under surveillance

Others in Abacha’s government also allegedly siphoned money from the state to amass personal fortunes. Nigeria’s former national security adviser Ismail Gwarzo allegedly channeled about $1.3 billion worth of foreign reserves into private accounts.

Abacha was replaced by Abubakar, who has vowed to clean up Nigeria’s rampant corruption and hand power over to an elected civilian government.

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