CBN Governor Emefiele in Trouble Over Alleged Forex Fraud in CBN

The Governor of Central Bank of Nigeria, Mr. Godwin Emefiele might have landed himself in trouble following allegations of corruption in the CBN’s foreign exchange allocation and transactions.

The incident has forced the Attorney General of the Federation and Minister of Justice, Mr. Abubakar Malami (SAN), to issue him a query as Malami added, on Wednesday, that the fraud allegations were “supported by several documents.”

The query by Malami is dated February 6, 2017, and with reference number, HAGF/CBN/2017/VOL.1/1 asked the CBN Governor to respond to the allegations “to enable us to advise the Presidency and take appropriate measures.”

Titled ‘allegations of racketeering in the Central Bank of Nigeria; disparity in allocation of foreign exchange’, and addressed to Emefiele, the letter was delivered to the CBN governor’s office on Monday.

According to a Punch report , the minister, in the letter, said he became aware of the corruption allegations through several petitions.

Four major allegations contained in Malami’s letter to Emefiele include alleged corruption in the apex bank’s “foreign exchange allocation transactions.”

The second is “questionable policy” in the apex bank’s allocation and sale of foreign currency to Nigerians.

The third is the issue of “arbitrary allotment of different exchange rates for same purposes” by the CBN.
The last is allocation of conflicting foreign exchange rates by the CBN.

The letter partly read, “Some of these petitions have been supported by several documents allegedly showing that the central bank has implemented a questionable policy in its allocation and sale of foreign currency to Nigerians.

“It is further alleged that this arbitrary allotment of different exchange rates for same purposes at the same time is being pursued as policy by the Central Bank of Nigeria. See attached documents from Leadershipng publication.

“Also attached is a report of the October 2016, allocation of conflicting foreign exchange rates by the central bank.
“In view of these allegations of corruption and arbitrary allocations of foreign exchange to a certain class of persons, you are kindly requested to comment on these allegations to enable us to advise the Presidency and take appropriate measures as may be dictated by the circumstances of the case.”

Media reports, relying on the document tiled ‘Bank utilisation report on 60:40 rule for October 2016’, which was attached to Malami’s letter sent to the CBN governor, had raised allegations of corruption and the implementation of questionable foreign exchange allocation policy.

In October 2016, alone, as revealed by the document, no pattern or template could be deciphered to have been used in calculating the exchange rates.

The criteria used in selecting the firms or sectors for which certain volume of foreign exchange was allocated and at what rate could not be pinned to any template.

The 1,312-page document revealed the names of various customers, their corresponding addresses, form numbers, amount allocated to them (in United States dollars), the items or purposes, the sector and the banks used for the month of October alone.

It shows how some companies and individuals got foreign exchange in US dollars at the rates as low as low as N0.61 to $1 while others got it in rates that were as high as N470 to $1.

For instance, an individual got $4,327 at the rate of N23.34 to $1 through “credit card payment” for “invisible” purpose and under “invisible sector”.

A bank also got $3,589.11 at the rate of N3.19 to $1 also for “invisible” purposes and under “invisible” sector.

There was a transaction involving sale of $66.72 at the rate of N0.62 to $1.
There was also a sale of $5.56 to a company at the rate of N0.61 also for “invisible” purposes.

A particular transaction also involved the sale of $570.8 at the rate N3.17.
In contrast, there was a company, who purchased $1,462,480.83 at the rate of N425 to $1.

The document shows that individuals and companies got foreign exchange for purposes ranging from importation, PTA, school fees, “invisible”, family maintenance allowances, mortgage payments and medical travel among others.

But the CBN had debunked the allegations in a publication posted on its website on January 30, 2017.

The publication titled ‘CBN clarifies alleged wrong FOREX purchase figures’, was signed by the apex bank’s Acting Director, Corporate Communications, Mr. Isaac Okorafor.

The bank stated that it neither allocated foreign exchange nor did it deal directly with bank customers.

Insisting that its forex policy was transparent, the apex bank also said it was not responsible for fixing FOREX rates for transactions by individuals or companies.

The statement read, “Following media reports alleging irregularities in the rates at which foreign exchange was obtained by some individuals and companies from different Deposit Money Banks under the new [60:40] Foreign Exchange Policy by the Central Bank of Nigeria, which prioritises FOREX sales to manufacturers, agriculture, plant and machinery, critical raw materials, among others, we wish to make the following clarifications:

“The Central Bank of Nigeria neither allocates foreign exchange nor does it deal directly with bank customers;
“The CBN does not fix FOREX rates for transactions by individuals or companies.

“In line with our principle of transparency, we directed DMBs to forward to us evidence of FOREX sale to end users and to advertise same in national dailies.

“Since the introduction of the new FOREX Policy in 2016, we have published, monthly, the evidence of sale from DMBs, as received from the banks and without any alteration by us in the spirit of transparency.

“We have recently observed, however, that some DMBs forwarded inaccurate data, which were erroneously published and gave a wrong impression of disparate rates;

“The DMBs involved in providing inaccurate data have since been issued queries accordingly. Some have returned a response, indicating that some of the figures were related to formatting errors, which do not affect the true rates of the affected transactions.

“As the constitutionally authorised industry regulator, mandated to manage the FOREX market, maintain external reserves and to safeguard the international value of the legal tender currency, we wish to state unequivocally that the CBN has a duty to perform and would not indulge in acts capable of discrediting the FOREX market.

“We therefore wish to reiterate that the sale of FOREX under the new policy is most transparent and it is not intended to benefit any individual or corporate body in anyway.”