The decision of the House of Representatives to probe critical financial institutions on forex
transactions has received a boost from the human rights community who
describe the move as a milestone that will open a can of worms.
There were reports last week that the House of Representative will
investigate the Central Bank of Nigeria, (CBN) and the Federal Inland
Revenue Services, (FIRS) over forex transactions and allocations.
Economic experts say the loss in illicit forex transactions is in the
range of $30b which they insist also weakens the naira in the
international market.
Human and Environmental Development Agenda (HEDA Resource Centre) in a
letter addressed to the House of Representatives signed by its Chairman,
Mr Olanrewaju Suraju commended the lawmakers’ decision to beam the
searchlight on the apex bank describing it as an important turning point
in ensuring the CBN and FIRS act in accordance with global best
practices. The letter with the caption Solidarity and Support for the
Probe of Central Bank of Nigeria Over forex Racketeering was addressed
to the House Committee Chairman, Hon James Faleke.
HEDA said the investigation and scrutiny by the House of Representative
is a step in the right direction adding that the group is willing to
support in providing any further clarifications and answer to any
questioning that would further the cause of investigation
“The local and international communities are watching with keen interest
the plan to probe the CBN and the FIRS on forex. There has been series
of allegations of sharp practices in forex dealings against CBN and FIRS
officials. The time to establish the truth has come”, HEDA said in a
letter sent to the Chairman House of Representatives Committee on
Finance, Banking and Currency. There have been lingering allegations of
racketeering in the allocation of foreign exchange by the two leading
foreign exchange hub.
The House of Representatives took the decision after adopting the motion
brought under matters of urgent national importance by the Chairman,
committee on finance, James Faleke. He had argued for the urgent need to
rescue Nigeria from over $30bn annual leakages arising from skewed
allocation of foreign exchange.
The prime beneficiaries suspects are the CBN, Autonomous, Interbank,
Domiciliary and Over-the-Counter Purchases for the Importation of
Physical Goods, Payment of Foreign Service Vendors, Dividend
Repatriation, Foreign Loan and Interest Payments, Including Foreign
Currency Denominated Contracts’ Payments by Companies in Engineering,
Procurement, Construction, Installation and Marine Transportation.”
HEDA said it was delighted with the conclusion in the motion,that the
leakages by CBN and other agencies has resulted in the loss of revenue
worth over $30billion.
The House of Representatives Committee of Finance, Banking and Currency
will conduct public hearing for a critical look at various originating
documents maintained by the CBN, banks, forex dealers, FIRS, importers
and other beneficiary companies. The committee is expected to make a
formal report of findings and provide necessary recommendations toward
the regularization of the problems aimed at putting a stop to the menace
in the future.
HEDA said the step by the Committee aligns with the engagement our
organization had with the CBN in the recent past when it wrote a freedom
of information request to the CBN during which the bank refused to
disclose the beneficiaries of the exchange rate differential.
HEDA said there are strong suspicions that the report relayed that the
bank gave subsidies on the foreign exchange through channels such as the
forex intervention scheme which is less than being transparent.
“It was reported that the alleged schemes were not beneficial to all and
deserving industries. According to reports, during the Former President
Goodluck Jonathan’s regime, from 2015 to 2017, pilgrims benefited from
subsidies in the exchange rate ranging from being given the dollar at
160 instead of 190, 197 instead of 297 respectively.”
HEDA recalled that in the Freedom of Information Request submitted, it
detailed breakdown of the schemes created by the Central Bank of Nigeria
to sell the dollar at a subsidized rate, the value of the amount that
has been given out so far for each scheme, the breakdown of the value
per sector and the detailed information on the beneficiaries of the
various schemes inclusive of the forex intervention scheme
HEDA said “Our request for information on the above listing was met with
ridiculous response from the Central Bank of Nigerian vide a letter
dated the 23rd December 2019 stating that the Apex bank was not involved
in pilgrim’s subsidized exchange rate nor any subsidized exchange rate
scheme. The refusal by the Central Bank of Nigeria prompted our
organization to invoke the provisions of Section 20 of the Freedom of
Information Act, 2011 by instituting an action before the Federal High
Court, Abuja. The Letters and the court processes referred are hereby
enclosed.”
The rights group said the investigation to be embarked upon by the
committee adequately and accurately meets HEDA’s organization’s delight,
considering the steps our organization had taken to demand answers from
the Apex bank in line with the allegations of racketeering in foreign
exchange utilization and allocation by the apex bank.”
HEDA said it hopes that the investigation by the Committee will shed
light on the matter and appropriately set the tone on the issues and
putting the agencies on the path of accountability and transparency.
