Naira drops 11.4% to N927/$1 on official market

The Nigerian Autonomous Foreign Exchange Market, the official FX window, saw a 11.4 per cent depreciation of the Naira against the Dollar on Friday, December 1, closing at N927.19/$1, from Thursday’s exchange rate of N832.32/$1.

This depreciation put the Naira on the back burner for the first trading session of the final month of 2023.

The domestic currency declined in the spot market on Sunday as a result of the December rush for foreign exchange, as the supply of foreign currency could not keep up with demand.

According to data, the value of FX transactions that were recorded at the market during the trading day was $110.14 million, down from $115.41 million the day before, indicating a decline of 4.6 per cent or $5.27 million.

The unregulated foreign exchange market experienced pressure on Friday due to the official market’s incapacity to meet the demand of customers. The local currency lost N5 in value against the US dollar in the parallel market, closing at N1,165/$1, as opposed to N1,160/$1, on Thursday.

However on Sunday, in the Peer-to-Peer window, the value of the Nigerian Naira increased by N8 relative to that of the US dollar, selling for N1,148/$1 as opposed to N1,156/$1.

During the session at NAFEM, the Naira fell N158.01 against the Pound Sterling to settle at N1,204.10/£1, down from N1,046.09/£1 the day before. Against the Euro, it fell N95.37 to sell at N1,036.06/€1, down from N940.69/€1 on Thursday.

The cryptocurrency market, meanwhile, saw mixed results, with Bitcoin rising by 1.9% to $38,112.80, and Dogecoin gained 3.1 per cent to sell at $0.0839.

Additionally, Litecoin gained 0.4% to $70.09, Binance Coin gained 0.4% to $228.88, Cardano expanded by 0.1% to $0.378 and Ethereum increased by 2.7% to $2,090.27. Ripple saw an increase of 0.8% to $0.6105.

Solana saw a slight decline of less than 0.3 percent to close at $60.34, whereas US Dollar Coin and US Dollar Tether ended the day unchanged at $1.00 each.

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Union Bank acquisition: CBN investigator summons Lemo, others over deal

The Special CBN Investigator, Jim Obazee, has summoned the Chairman of Titan Trust Bank, Babatunde Lemo, in connection with the acquisition of Union Bank of Nigeria Plc by TTB.

The TTB chairman, a former deputy governor of the Central Bank of Nigeria, was directed to report at the Department of Force Intelligence opposite the Force headquarters, Shehu Shagari Way, Abuja on Thursday, where he is expected to be questioned over the UBN acquisition.

Lemo was further instructed to come along with the promoters of TTB, Messrs Cornelius Vink and Mr Rahul Savara, to meet with the team of special Investigators.

Lemo was invited in a letter dated December 24, 2023, and signed by the Head of Operations, Office of the Special Investigator, DCP Eloho Okpoziakpo.

Obazee had in his report alleged that some persons were used as proxies by a former CBN Governor, Godwin Emefiele, to set up Titan Trust Bank and acquire Union Bank.

Obazee, who was appointed special investigator in July, 2023, submitted his final report tagged, ‘Report of the Special Investigation on CBN and Related Entities (Chargeable offences) to the Presidency on December 20, 2023.

In two separate reports on the acquisition of UBN and Keystone Bank submitted to President Bola Tinubu last Wednesday, the Special Investigator also alleged that Emefiele used proxies to acquire Keystone Bank without evidence of payment.

‘’When we carried out investigation, we discovered that some persons were used as proxies by Mr Godwin Emefiele to set up Titan Trust Bank and acquire Union Bank therefrom, all from ill-gotten wealth.

‘’We were able to secure some documents and investigation reports will lead to the forfeiture of the two banks to the Federal Government. We have completed our investigation on this acquisition and have also held meetings with the relevant parties except for Mr Cornelis Vink (that is currently hospitalised in Switzerland).

‘’Otherwise, we are on the verge of recovering these two banks for the Federal Government,’’ Obazee claimed in his letter.

Following media reports on the UBN deal, Lemo in an interview with Sunday PUNCH insisted that the acquisition of the bank followed due process and met all regulatory requirements, including that of the Securities and Exchange Commission and the Central Bank of Nigeria.

He insisted that the establishment of Titan Trust Bank and the subsequent acquisition of Union Bank were transparent and duly verified by the relevant regulatory bodies.

However, in furtherance of the investigation into the UBN deal, and in response to Lemo’s defence, the investigator in the letter titled, RE: CBN investigation activities: Invitation for a follow-up meeting with the Special Investigator,’ took the TTB chairman to task on his defence.

The letter read, ‘’Please, refer to your discussion with the Special Investigator earlier today regarding the offensive defence that your good self issued in PUNCH newspapers, on behalf of TTB which you chair, as well as the email you sent to the Special Investigator today wherein you tried to provide clarification on your reaction to the report on TTB.

‘’The defence seems contrary to the statements, made under caution, by the persons connected with these transactions, including your good self, before the Special Investigator at the Department of State Service in August 2023.

‘’In the said newspapers, you referred to both Cornelius Vink and Rahul Savara as “prominent global entrepreneurs and having thriving businesses in Nigeria…”

‘’In your email as well as your earlier discussion with the Special Investigator, you suggested that both of them be invited to provide clarification on their share ownership and given seven days to make such clarification; failure which they will forfeit their shares to the Federal Government of Nigeria.

‘’We are surprised at your request with regard to these two shareholders. They were given this opportunity via a letter to them dated 28th August 2023 (copy attached as Appendix 1).

‘’Instead of honouring the invitation and providing the requested documents, we received a letter from the Company Secretary of Union Bank, Somuyiwa Sonubi, dated 1st September 2023, informing the Special Investigator that Mr. Cornelius Vink was out of the country on medical grounds and that both “Messrs Vink and Savara will be available for the meeting as soon as they are in Nigeria which will be soon” (copy attached as Appendix 2).

‘’Up until this offensive defence that you put in the public domain, the Special Investigator has neither heard from them nor received the requested documents.”

However, when The PUNCH examined the letter written by Union Bank to the Special Investigator (referenced Appendix 2 above), the lender stated it was submitting all “the documents/information requested for in printed and electronic formats for ease of your review and analysis” alongside the letter.

As of press time, The PUNCH could not independently verify why the special investigator did get the documents as claimed above.  Also, our correspondent could not verify if the Special investigator replied the Union Bank to demand explanation as to why the documents claimed to have been submitted alongside the letter were not attached.

Meanwhile, in the latest letter summoning Lemo for a follow-up meeting, the Office of the Special Investigator said, ‘’Accordingly, you are hereby invited to come along with Messrs Cornelius Vink and Mr Rahul Savara to meet with the Team of Special Investigators by 2pm on 28th December 2023 at the Department of Force Intelligence, Opposite Nigeria Police Force Headquarters, Shehu Shagari Way, Area 11, Garki, Abuja; without fail or excuse. ‘’

The letter added, ‘’Please, inform them to come along with all the documents/information requested from them by the letter to Mr Cornelius Vink dated 28th August 2023 (attached herewith as Appendix 1). You will also be required to make additional statements to your earlier statement on that day.

‘’Kindly note that if Messrs Cornelius Vink and Rahul Savara refuse to attend this meeting and provide/defend the requested documents/information, it will be construed that they have decided to forfeit their purported shareholdings in TTB and Union Bank of Nigeria; irrespective of which vehicle that they are using to own the purported shares.

‘’Should you also refuse to attend the meeting to provide additional statement to your earlier statement made in August 2023, it will be construed that you misled the Nigerian public with your reaction in the PUNCH Newspapers today which has gained wide publicity in both electronic and print media.’’

The investigator explained that the invitation was to further ensure that ‘’it is beyond reasonable doubt that the Federal Government of Nigeria has given you a fair hearing.’’

Meanwhile, It is unclear whether without a court ruling, the Special Investigator’s Office has the powers to make investors lose their shareholding should they fail to attend the meeting for whatsoever reason.

(Punch)

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Forex: Nigerian government gains N1.4trn revenue in 6 months

Nigeria’s foreign exchange reform in June increased the country’s revenue through FX differences to N1.36 trillion in six months.

The Federation Account Allocation Committee, FAAC, disclosed this in its communiqué.

The gains come as foreign exchange revaluation led to the depreciation of the naira, which currently sells at N885.88/$1, compared to its 2022 closing rate of N461.50/$1.

According to the communiqué, the difference increased from N0.639 billion in June to N364.87 billion in November.

From the gains, FAAC shared N320.89 billion in July, N229.67 billion in August, N186.81 billion in September and N262.89 billion in October.

Providing a breakdown of how the accrued revenue was shared among the three tiers of government, an analysis of the document indicated that after the federation account gained N625.77 billion from exchange difference revenue, state governments shared N317.36 billion, while the local government got N244.66 billion in six months.

DAILY POST recalls that in the last six months, the Nigerian government made N907.05 billion in June, N966.110 in July, N1.1 trillion in August, N903.48 billion in September, N906.955 billion in October and N1,088.783 trillion in November as the amount that accrued to the federation’s account.

(Daily Post)

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Emefiele, ex-minister, 14 others indicted in CBN probe

  • Investigator’s report shows massive plunder of apex bank
  • N31.78b paid to print new naira notes
  • £543.45m fixed in British bank
  • N1.62tr COVID-19 funds unaccounted for

Former Central Bank Governor Godwin Emefiele and a minister are to face trial over the scandal that rocked the apex bank in the last one year, it was learnt yesterday.

After a five-month probe, Emefiele, the minister and 14 others who have been implicated in over N26.6 trillion fraud, have been recommended for trial.

Those implicated include former and serving top officials of the apex bank.

No fewer than 16 former government and CBN officials were alleged to have indulged in fraudulent use of ‘Ways and Means,’ which stood at N26.627 trillion.

Also, a former influential aide of former President Muhammadu Buhari may be arraigned with Emefiele.

In September 2022, the aide had allegedly told Emefiele to proceed with the naira redesign.

The printing of the new notes cost N61.5 bilion out of which N31.79 billion has been paid.

There were indications that the aide also sold a “dummy” to the former president.

Preliminary investigations into the activities of the CBN and related entities revealed many infractions, including the violation of the apex bank’s Act, alleged looting, diversion of funds and sidelining of the Board of Directors.

Other allegations were lack of presidential approval, extra budgetary spending, forgery, concealment, stealing, conspiracy and fraud.

Some documents available to The Nation, based on the report by the Office of Special Investigator, gave insights into how the rot in the CBN was perpetrated.

The Special Investigator on CBN and Related Entities, Mr. Jim Obazee, was appointed in July, 2023.

He submitted an Interim Report on December 9, 2023.

It was learnt that the final report was submitted to the President on the December 20.

The investigations exposed what a source described as a “monumental scandal”

Some documents, available to The Nation, contain some highlights of the first phase of the probe of accounts and operations of the CBN.

It was discovered that Emefiele invested public money (billions of dollars) in 593 accounts in the United States, China and the United Kingdom without authorisation.

In the UK alone, Emefiele kept £543,482, 213 in fixed deposits without authorisation by the CBN Board and the Investment Committee.

Also, about N1.7 trillion spent on COVID 19 intervention management did not get to the right beneficiaries.

Ways and Means

A major breakthrough in the probe of the CBN was the manipulation of “Ways and Means” by Emefiele and his team.

Investigations showed that the former CBN governor and those who worked with him could not produce evidence of “Ways and Means,” which now stands at N26.627trillion.

It was found out that there were instances of arbitrariness where there was no presidential approval, but billions of Naira were taken out from the nation’s Consolidated Revenue Fund (CRF) account.

 Some of the findings were as follows: “The CBN officers and even the then Acting CBN Governor could not produce the presidential approval of most of the expenses described as “Ways and Means”.

“When confronted to provide  the breakdown of the supposed N22,719,703,774,306.90 that was presented to the 9th  National Assembly to illegally securitise as “Ways and Means” financing, they were only able to partially explain a total of N9,063,286,720,318.92 or N9,258,040,720,318.92 (depending on which official you are considering his submission) and an  unreasonable attribution of non-negotiated/unadvised interest element of N6,678,874,321,541.97. This shows the point where the officers of the immediate past administration as well the erstwhile CBN governor and others connived, defrauded and stole from the common wealth of the country with the aid of civil servants.

“The true position of the “Ways and Means” as documented from the reconciliation between the CBN and the Ministry of Finance at the time is N4, 449, 149, 411. 584.54. This may have been the main reason the past administration hurriedly sought that the advances of N22,719,703,774,306.90 be securitised by the 9th National Assembly on the 19th December 2022; which they also hurriedly did despite the fact that it contravenes Section 38 of the CBN Act, 2007.”

“The probe showed that the CBN Governor on the 19th December 2022 “ signed an advice to the former President Muhammadu Buhari to restructure “Ways and Means” of N23,719,703,774,306.90, despite presenting a different figure to the National Assembly on the same date.

“The fact that the balance of the “Ways and Means” was documented as N26.63 trillion as at June 8, 2023 by the erstwhile CBN Governor shows an unrepentant attitude of the management of the CBN because they continued to carry the “Temporary Advances to the Federal Government” as a running current account, despite the obvious contravention of Section 38 of the CBN Act, 2007, which they swore to uphold,” the document said.

Naira redesign

Obazee, who worked with different teams of crack detectives, also uncovered the intrigues behind the naira redesign, which almost led to the collapse of the nation’s economy.

The outcome of the investigation confirmed that an ex-presidential aide gave the directive to Emefiele.

Section 19(1) of the CBN Act requires that “Naira notes and coins shall be of such forms and designs and bear such devises as shall be approved by the President on the recommendation of the Board of the CBN.”

It was unclear the circumstances under which the former presidential aide allegedly gave instructions to Emefiele.

A document said:  “The Naira Redesign was not approved by the Board of CBN and President Muhammadu Buhari in accordance with the law. Buhari only tagged along. Sometimes in September 2022, the erstwhile Governor of the CBN claimed that during his visit to the Presidential Villa, one of the presidential aides told him to go and consider redesigning the Naira.

“On 6th of October, 2022, Emefiele wrote Buhari seeking approval to redesign and reconfigure N1,000, N500, N200 and N100 notes. Buhari approved the proposal same day. But Buhari approved the currency be printed in Nigeria.

“On that 6th October 2022, former President Muhammadu Buhari approved Emefiele’s request and directed that he should redesign and reconfigure the four denominations of the Naira notes as prayed, but should print them locally.

“Emefiele did not consult with the management of the CBN or seek any recommendation from the Board of the CBN as required by Section 19 of the CBN Act, 2007.

“Emefiele did not seek the recommendation of the Board of the CBN nor revert to former President Muhammadu Buhari to inform him nor seek his presidential approval for the new redesigns and the fact that he is now recommending only three denominations

“Emefiele took the redesigns, a mere change of colour to De La Rue in UK for a fee of £205,000. Only N1, 000, N500 and N200 were redesigned.

“As at August 9, 2023, N769 billion of the new notes were in circulation. The printing cost was N61.5 billion, out of which N31.79 billion has been paid.

In a separate document, the probe confirmed the investment of billions of dollars in 593 foreign accounts in the United States, China and the United Kingdom without approval from the board or the President.

“The former governor of the CBN invested Nigeria’s money without authorisation in 593 foreign accounts in the United States, China and the United Kingdom while he was in charge.

“All the accounts where the billions were lodged have all been traced by the investigator, In the UK alone, Emefiele kept £543,482, 213 in fixed deposits without authorization by the CBN board and the Investment Committee of the bank,” the document added

COVID-19 intervention funds

Another scandal which was unearthed was the inability to trace about N1.62 trillion COVID-19 intervention funds.

It was discovered that “the N1,622,119,412,095.16 was surreptitiously transferred to the following individuals and organizations: Police Trust Fund(N29,750,000,000.00); Companies and individuals (N22,680, 275, 135.45); borrowed for salaries (N720, 682,827,000.00); Donations to public (N40,000,000,000.00); Office of Accountant-General of the Federation (N196, 190,789,994.72); MDAs (N303,514, 294,725.21); and others (N293,986, 243,831.39).

Diversion of N17b by DMB

On the Nigeria Electricity Supply Industry (NESI), the former CBN Governor was accused of unlawful manipulation of the approval of the President.

Investigation indicated that 14 Deposit Money Banks (DMB) were involved in what is termed “criminal diversion of N17, 232,349, 193.55.

But the list of the 14 banks was still kept under wraps as at press time.

A source said: “We have the list which includes some rated banks. But at the appropriate time, Nigerians will know them.”

Two of the banks are to refund over N3 billion each.

The least amount to be refunded is N8, 902, 081 by a reputable bank.

Also a web management firm is to refund N4.8 billion, being the sum said to have been illegally diverted from NESI Stabilisation Strategy Limited.

Explaining what Emefiele did, the synopsis of the investigation on NESI was as follows: “The Presidential Approval granted by the then President Goodluck Jonathan was rightly stated by him that NESI should be a Company Limited by Guarantee, but the Committee of Governors misled the Board of the Central Bank of Nigeria by inter-alia:

“Relying on a non-existent advice by the Office of the Attorney General and Minister of Justice, to incorporate a Company Limited by Shares for which the Allotted Share Capital exceeded the Authorized Share Capital (See 380% Meeting of the Committee of Governors held in January 2015); and

 ”Allotting unauthorised share capital without lawful approval by the President of the Federal Republic of Nigeria.

Investigation also spotted illegal Issuance of Debentures by NESI Stabilisation Strategy Limited.

“There was misrepresentation of Presidential Approval (NESI Stabilisation Strategy Limited). NESI, as approved by former President Goodluck Jonathan, was supposed to be an SPV limited by Guarantee, but Emefiele, relying on a non-existent advice, made it a company limited by shares.

“By law, an SPV cannot issue Debentures, as it is precluded from forming a Debenture Trust. Worse still, a virgin entity without any operational track record cannot issue Debentures as it has no trading or earnings history to justify the requirements of the Debenture issue.

“Despite these, the Committee of Governors of the Central Bank of Nigeria on the date of its Meeting of 21st  January 2015,  caused a violation of Section 31 of the CBN Act, 2007 by authorising the issuance of Debentures by NESI Stabilization Strategy Limited to which the initial sum of N64,861,954,000.00 (Sixty Four Billion, Eight Hundred and Sixty One Million, Nine Hundred and Fifty Four Thousand Only), was diverted from Public Funds under the guise of Debenture issuance. This practice has grown to N952,414,745,000 (Nine Hundred and Fifty Two Billion, Four Hundred and Fourteen Million, Seven  Hundred and Forty Five Thousand Naira Only) by the Financial Year end 2021”, the document added.

“N1.325billion was stolen pre-incorporation and the money was funneled to four companies, including a legal firm which got N300 million.”

The note on the allegations against some banks read: “A total of 14 DMBs engaged in the manipulation by unlawfully arranging and collecting 1.9535 percent of the total disbursements paid to the DMBs participating in the Nigerian Electricity Market Stabilisation facility.

“The fees are paid to the banks in the ratio of their contributions to the NEMSF disbursement, according to External Auditor’s Notes to the Financial] Statement of NESI Stabilisation Strategy Limited.”

Also, a firm linked with some CBN officials was paid N4, 897,789,000 allegedly “illegally diverted from NESI Stabilisation Strategy Limited.”

(Nation)

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$11bn judgment: P&ID loses bid to appeal Nigeria’s victory

A London court has quashed an $11bn damage bill against Nigeria lodged by Process & Industrial Developments Limited Gas Company.

The bill charge was brought forward against Nigeria for a collapsed gas processing project in Cross River, Nigeria.

Nigeria risked having to pay the sum – representing around a third of its foreign exchange reserves – to Process & Industrial Developments, a company based in the British Virgin Islands.

But the High Court ruled in October that P&ID paid bribes to a Nigerian oil ministry official in connection with the gas contract signed in 2010, and failed to disclose this when it took Nigeria to arbitration over the collapse of the deal.

The ruling was a major boost for Africa’s biggest economy, which is saddled with mounting debt, high inflation and unemployment, and was described by Nigerian President Bola Tinubu as a blow against economic malpractice and the exploitation of Africa.

P&ID argued that the case should be sent back to arbitration, but Judge Robin Knowles ruled on Thursday that the award should be thrown out immediately.

The judge also refused P&ID permission to appeal, effectively ending the case as the company cannot apply for permission from the Court of Appeal.

According to the Reuters report, a London-based spokesperson for the Nigerian government said the decision “marks the conclusion of a historic victory for the people of Nigeria.”

The trial has its origin in a failed 2010 gas deal between Nigeria and P&ID, a British Virgin Islands-registered firm founded by two Irish businessmen.

The two Irish nationals – a former music manager, Michael Quinn (who died in 2015) and his business partner Brendan Cahill had been previously contracted to repair tanks and planes for the Nigerian military.

In 2010, P&ID was awarded a 20-year contract to process gas for Nigeria’s domestic energy market.

Two years later the firm commenced arbitration proceedings, claiming that the Nigerian government had failed to build the required infrastructure for the energy project, which translated to reneging on the contract.

A resulting arbitration led to a $6.6bn award for P&ID that has now increased to more than $11bn with interest. However, the latest development almost definitively quashes the company’s chances of seeking redress through the legal system.

(Punch)

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Emefiele operated 593 illegal US, UK, China accounts, fixed over £500m – CBN investigator

The former Central Bank of Nigeria Governor, Godwin Emefiele, illegally lodged billions of naira in no fewer than 593 bank accounts in the United States, United Kingdom, and China without the approval of the apex bank’s board of directors and the CBN Investment Committee.

The Special Investigator on the CBN and Related Entities, Jim Obaze, found that the ex-CBN governor lodged £543, 482,213 in fixed deposits in UK banks alone without authorisation.

When contacted, counsel for Emefiele, Mathew Bukkaa, SAN, asked one of our correspondents to send him a text message.  He has yet to reply to the message as of the time of filing this report.

Meanwhile, Obaze submitted his final report tagged, ‘Report of the Special Investigation on CBN and Related Entities (Chargeable offences) to President Bola Tinubu on Wednesday.

The report  partly read, “The former governor of CBN, Godwin Emefiele invested Nigeria’s money without authorization in 593 foreign bank accounts in United States, China and United Kingdom,  while he was in charge.

“All the accounts where the billions were lodged have all been traced by the investigator.”

In a letter dated July 28, 2023, sighted by The PUNCH, President Bola Tinubu had named a former Executive Secretary of the Financial Reporting Council of Nigeria,  Obazee, as the CBN special investigator.

Emefiele, who is currently in Kuje Custodial Centre, is being prosecuted for N1.2 billion procurement fraud.

He has not been able to perfect the N300m bail granted him by a High Court of the Federal Capital Territory on November 22.

However, documents obtained by our correspondent on Thursday indicated that the former apex bank governor might face fresh criminal charges over the handling of the CBN naira redesign policy.

Emefiele could be prosecuted for illegal issuance of currency under section 19 of the CBN Act alongside Tunde Sabiu, a former aide to former President Muhammadu Buhari, and 12 top directors of the CBN.

It was gathered that the naira redesign policy was sold to Buhari at the instance of Sabiu and that the initiative was done without the approval of the board of the CBN.

No approval

The investigator found that Buhari didn’t approve of the naira redesign. It was Tunde Sabiu who first told Emefiele in September 2022 to consider the redesign of the naira. On October 6, 2022, Emefiele wrote to Buhari that he wanted to redesign and reconfigure N1000, N500 and N200 notes.

“The former President tagged along but did not approve the redesign as required by law. Buhari merely approved that the currency be printed in Nigeria. The redesign was only mentioned to the board of the CBN on December 15, 2022, after Emefiele had awarded the contract to the Nigerian Security Printing and Minting Plc on October 31, 2022,’’ the documents noted.

Emefiele was said to have contracted the redesign of the naira to De La Rue of the UK for £205, 000 pounds under the vote head of the Currency Operations Department after the NSPM said it could not deliver the contract within a short timeframe.

The special investigator found that N61.5bn was earmarked for the printing of the new notes out of which N31.79bn had been paid.

As of August 9, 2023, findings revealed that N769bn of the new notes were in circulation.

The probe of the CBN also revealed the fraudulent use of N26.627tn  Ways and Means of the Apex Bank as well as the misuse of the COVID-19 intervention fund.

For instance, the CBN under Emefiele at its 661st meeting held on October 27, 2020, approved that the Consolidated Revenue Fund Account should be debited with the sum of N124.860bn, and the decision was implemented on October 9.

Similarly, the Committee of Governors at its 670th meeting held on December 9, 2020, granted anticipatory approval ‘’pending receipt of a formal request by Mr President and ratification by the board of directors the payment of the sum of N250bn only to the Federal Government of Nigeria to address challenges as a result of low revenue inflow and the payment of salaries.

The decision was implemented on December 15, 2020.

Anticipatory approval

Also on December 30, 2020, the committee of governors at its 672nd meeting granted another anticipatory approval for N250bn to the Federal Government for payment of salaries pending receipt of a formal request by Mr President and ratification by the board of directors.

The apex bank’s management through the Finance and General Purpose Committee equally granted anticipatory approval on the investment of $200mn in equity warrants of the Africa Finance Corporation.

According to section 38 of the CBN Act, 2007, the CBN could grant temporary advances to the Federal Government in respect of temporary deficiency of budget revenue at an interest.

The section also provides that such advances are to be repaid by the end of the financial year in which they are granted otherwise, the CBN shall be stopped from granting such advances in the subsequent year.

The advance is not to be repaid by way of promissory note, securitization or issuance of treasury bills.

The CBN investigator discovered that the CBN Ways and Means was abused under the Buhari administration.

The document further said, “In an instance, they (senior CBN and government officials) padded what the former President Muhammadu Buhari approved with N198,963,162, 187. There are instances where no approvals are received from the former president and yet, N500bn is taken and debited to Ways and Means.

“There are more shocking instances where the erstwhile CBN governor and his four deputy governors connived to steal outright in order to balance the books of the CBN.

“This was by violently taking money from the Consolidated Revenue account and then charging it to Ways and Means. It was a total of N124.860bn. They even created the narration as a presidential subsidy and expanded the ways and Means portfolio to accommodate crime.

“The CBN officers and even the then acting CBN governor could not produce the Presidential Approval of most of the expenses described as ‘Ways and Means.’ When confronted, to provide the breakdown of the supposed N22.7trn that was presented to the 9th National Assembly to illegally securitise as ‘Ways and Means’ financing, they were only able to partially explain a total of N9.063 trn or N9.2trn depending on which official you are considering his submission and an unreasonable attribution of non-negotiated interest element of N6.5tn.

“This shows that this was the point where the officers of the immediate past administration as well as the erstwhile CBN governor and his four deputy governors connived, defrauded, and stole from the commonwealth of our country with the aid of civil servants.’’

Continuing, the report said, “The true position of the Ways and Means as documented from the reconciliation between the CBN and the Ministry of Finance at the time is N4,449,149,411,584.54.

“This may have been the main reason the past administration hurriedly sought that the advances of N22.7trn be securitised by the 9th National Assembly on December 19, 2022, which they also hurriedly did despite the fact that it contravenes section 38 of the CBN Act, 2007.”

Legal fees

The CBN under Emefiele was also said to have spent N1.7bn on questionable legal fees for 19 cases instituted against the naira redesign policy.

The investigator also discovered how Emefiele misrepresented the presidential approval for the NESI Stabilisation Strategy Limited approved by former president Goodluck Jonathan.

The document read, “The Presidential approval granted by then President Goodluck Jonathan was rightly stated by him NESI should be a company limited by guarantee but the Committee of Governors misled the Board of the CBN by relying on non-existent advice by the office of Attorney-General and Minister of Justice to incorporate a company limited by shares for which the allotted share capital exceeded the authorised share capital (See 380th meeting of the Committee of Governors held in January in January 2015) and allotting unauthorised share capital to Mr Godwin Emefiele and Mr Mudashiru Olaitan without lawful approval by the President.

“N1.325bn was stolen pre-incorporation and the money funnelled to four companies, including a legal firm which got N300mn.’’

Between 2015 and 2021, an investment company was said to have collected unlawfully a total of N4.89bn.

A breakdown indicated that the firm received N262mn in 2015, N464mn in 2016, N550mn in 2017, N726mn in 2018, N762 in 2019, N684 in 2020 and N1.44bn in 2021, totalling N4.89bn.

Emefiele also allegedly paid N17.2bn to 14 deposit money banks participating in the Nigerian Electricity Market Stabilisation Facility.

“A total of 14 DMBs engaged in the manipulation by unlawfully arranging and collecting 1.9535 per cent of the total disbursements paid to the DMBs participating in the Nigerian Electricity Market Stabilisation Facility.

The fees are paid to the banks in the ratio of their contributions to the NEMSF disbursement, according to External Auditor’s Notes to the Financial Statement of NESI Stabilisation Strategy Limited.

“The CBN also went further by authorising the issuance of debenture for the NESI SPV, starting with N64.8bn in 2015. By 2021, N952bn debenture had been issued. The investigator said the money was diverted from public funds,’’ the document further stated.

It was further gathered that Emefiele could be tried for alleged manipulation of the naira exchange rate, fraudulent implementation of the e-naira project, and exemption of three foreign firms from paying income tax.

Meanwhile, the investigation has uncovered the strange illegal withdrawal/theft of $6.23mn from the CBN vault by two persons who used a forged presidential letter.

The suspects currently in custody were said to have presented a forged letter on February 7 and 8, 2023, purportedly signed by Buhari to withdraw the money allegedly meant for payment for foreign election observation missions.

(Punch)

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Naira gains as CBN pays banks $6.7bn forex backlog

The Federal Government through the Central Bank of Nigeria, has commenced payment of outstanding matured FX forwards owed to various creditors, the PUNCH can report.

A source familiar with the development confirmed the payment on Thursday.

Meanwhile, unconfirmed sources said three banks received full payment of debts owed.

The banks are Citi Bank, Stanbic IBTC and Standard Chartered Bank.

The amount of overdue forward payments is estimated at $6.7 billion, according to the Minister of Finance, Wale Edun.

Meanwhile, the naira has risen to N1,120 against the dollar as the foreign exchange market reacted to news that the Central Bank of Nigeria has begun to clear some of its FX backlog on Thursday.

This represents an appreciation of N50 or 4.27 per cent compared to the N1,170 it traded for on Wednesday. Currency traders, also known as Bureaux De Change operators, who spoke to The PUNCH stated the naira was recovering well after making a quick recovery from N1,170/dollar in the morning to close trading at N1,120/dollar.

The naira in Lagos recorded an average of 1,120/$ on Thursday, appreciating to 1,040/$ and 1,125/$ in different locations on Thursday. It traded at 1,170/$ on Wednesday. In Abuja, the average price of the naira against the dollar was 1,200.

However, The PUNCH reports that 21 commercial institutions are operating in the country.

The source said, “Three banks payment received full payment from the CBN. On the amount, no bank would want to disclose that information.

Statements from two of the banks, obtained by The PUNCH, confirmed the payment of FX forwards by the CBN.

Stanbic IBTC in a statement said, “Yesterday, the apex bank began clearing the backlog of outstanding Retail SMIS obligations. The total amount cleared is yet to be ascertained.”

Also, Citi in a statement issued by its Treasury and Trade Solutions department, exclaimed, “CBN HAS DONE IT.”

The bank enjoined its customers to begin to speak with their respective Relationship Manager or Trade Service Professional for clarification on the matter.

The circular titled ‘Settlement of Matured FX Forwards by CBN’, said, “We have been directed to inform you that the CBN has delivered all outstanding matured forward forex.

“We thank you for your patience and cooperation and value you for your business and partnership. Please speak with your Relationship Manager or your Trade Service Professional for clarification and additional details.

“It is a gradual payment that was done secretly, CBN didn’t make a fuss about it. It started yesterday and continued all through the night.”

The source added that paid banks represent a small percentage of outstanding FX forwards with the largest percentage mostly in tier 1 banks yet to be settled.

He, however, expressed hope that they will be settled in the next tranche maybe with a lower percentage.

The CEO of a Tier 2 bank who does not want his name mentioned, also confirmed that his bank received $100m from the CBN, expressing confidence that the outstanding would soon be settled.

He said, “As I speak with you, our bank has been credited with $100m by the Central Bank and we are confident of getting the balance soonest. This is a positive development for the economy and trade in particular.”

However, there are commercial banks in the system that are not happy with the CBN because they have yet to receive any credit alert.

Sources at the CBN who spoke to The PUNCH unofficially said, “The banks who have not received payments are grumbling, alleging that the Apex bank has denied them of their rights.”

Reacting, the Association of Corporate Treasurers of Nigeria said the decision to settle matured foreign exchange forwards is a significant step in promoting stability and confidence in Nigeria’s foreign exchange market.

The association comprising all corporate treasurers in Nigeria in a statement obtained by our correspondent said the action demonstrates the apex bank’s commitment to ensuring the ease of doing business and reducing uncertainty in the market.

The statement signed by the association president, Adeyinka Ogunnubi, read, “We, at ACTN, believe that the timely settlement of matured FX forwards is crucial for our members and the broader business community. It allows our corporate treasurers to efficiently manage their foreign exchange risks and plan for their financial obligations.

“We recognize the CBN’s responsiveness to the concerns of businesses and its continued efforts to implement policies that enhance the resilience of the Nigerian financial system.

“As an association dedicated to advancing best practices in corporate treasury management, ACTN will continue to work closely with regulatory authorities to support policies that foster transparency, predictability, and stability in Nigeria’s financial markets.”

Also reacting, the Director General of the Nigeria Employers Consultative Association, Mr Wale Oyerinde, said, the actions of the new administration of the Central Bank of Nigeria have shown tremendous improvement in the FX management.

He said, “Well, there is no doubt that the economy lacked the requisite FOREX to completely close down the outstanding matured FX in banks. However, the actions of the new administration through the CBN have shown tremendous improvement in FX management, which was a huge challenge in the last administration. The current CBN management has stepped up forex intervention in the FOREX market, which is now accounting for 75 per cent delivery of the matured FX. While we commend this action and the determination to clear all the standings, we hope that this effort will be sustained. The sustainability of this intervention will largely depend on the guarantee of FOREX inflow from all available sources. With stable, focused and growth-induced reforms, another opportunity for FOREX like increased FDI will be enhanced,” Oyerinde added.

Also speaking, the immediate Vice President of the Manufacturers Association of Nigeria, Lagos Zone, Mr John Aluya, said he is yet to be informed of any of their members whose backlogs have been cleared.

Aluya, who is also a current member of the National Council of MAN, noted that if the initiative is properly implemented, it will help to improve the system. But he said that commercial banks may likely frustrate the move by the apex bank.

“But if this move is well implemented, it could be an initiative that could be done in such a way that it will be an improvement in the system. But I will tell you that for every step the CBN takes the big elephants in the house are always there to truncate it and if the CBN is not careful the big elephants will also truncate this move that they are about to make. The big elephants I mean are the commercial banks. They are the people who have always made our exchange rate unreliable because they benefit from it. When you talk of the I&E window you bid for it but manufacturers do not enjoy the window, because the banks will tell you that you will bid for I&E at CBN rate, and they will give you another account to pay the difference into and that is truncating the system.”

The Chairman of the Nigerian Economic Summit Group, Mr. Niyi Yusuf, said, “This is in the news and it’s useful that the administration is delivering on its public commitments which should help to improve public confidence. It’s a good signal and a right step to rebuilding trust and confidence,” he concluded.

The Chairman of the Nigerian Association of Small and Medium Enterprises, South-West region Chairman, Solomon Aderoju, queried if the payments would get to the end users.

He said, “Will it get to the end users? How much have they cleared? If it will get to the importers and the end users, then, it’s a good development. If not, then, it’s still the same story. Nigeria’s problem is multidimensional. Even with the 43 items that they removed, are the importers now getting the forex from the banks? I am sure they are still using the black market.

“Over the years, we have been using the foreign reserve. The reserve has been depleting over the years because we are not adding anything to export. It’s the only export that can add to the reserve. So, it’s a deficit account.”

The former Chief Economist of Zenith Bank, Marcel Okeke, said, “The exact amount is not known. Where did they get the money? What are the terms of the borrowing? How much have they cleared? The secrecy around the management of foreign exchange by the CBN is now a concern. You no longer know the rate at the official window exchange. If they say they are now clearing, how? The international communities are watching, they are worried, and nobody is impressed. The government has not done anything to improve government supply. Even investors are not coming. Aside from these issues, there are other myriads of problems. The business climate is not encouraging. Are investors coming because we have the best infrastructure, are they coming because we have security? What exactly? “

The PUNCH had reported that President Bola Tinubu assured Nigerians and investors that there was an ongoing plan to boost the country’s foreign exchange liquidity.

This was as the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said that the country was expecting about $10bn inflows in the nearest term, which would help to clear foreign exchange backlog and stabilise the naira.

Speaking at the 29th Nigerian Economic Summit in Abuja recently, Tinubu acknowledged the challenges faced by the business community in the financial markets and assured them of additional foreign exchange liquidity to restore market confidence.

On clearing the FX backlog which has drained investor confidence, the president said, “All foreign exchange future contracts will be honoured by this government.”

“I assure you we have a line of sight to the foreign exchange we need to refloat this economy. And we will get it,” he added.

Naira Gains

The president of the Association of Bureaux De Change Operators of Nigeria, Aminu Gwadabe, affirmed to The PUNCH that the dollar closed trading at N1,120/dollar on Thursday. He attributed this to the CBN’s move to clear some of its backlog.

He said, “It is closing at N1, 120. Even yesterday it came down to N1,150. Today, it started at N1,170 but it is closing at N1,120. Yes, this is because of the CBN’s move to clear its backlogs. There is a kind signal in the market. The CBN should continue to make clarifications.”

In Abuja, the naira exchanged at 1,170/$ on Thursday at the parallel market, as liquidity challenge persisted, according to some Bureau de Change Operators.

Some BDC operators who spoke to The PUNCH said this was a slight improvement from the 1,200/$ traded on Wednesday.

An Abuja-based Bureau de Change said the naira was gradually improving but had yet to regain its true value.

He said, “The naira is improving but very high compared to what we were trading before the current administration.”

Another BDC operator who spoke to our correspondent said the naira traded for N1,115/$.

He further lamented that there was a significant crash in the parallel market, forcing traders to stop sales of dollars.

He said, “We experienced significant loss today as the dollar suddenly crashed. Most of us have stopped for now to see what the market holds. If it reduces tomorrow, we may have to sell at a loss.”

A BDC operator at Wuse Zone 4, Abuja, lamented the huge crash of the dollar against the naira, noting that the gains recorded by the Nigerian currency had confused the traders operating in the parallel market.

According to him, the naira gain had put many forex dealers in crisis and debt.

‘’I bought $20,000 yesterday (Wednesday) and now that the dollar has crashed, it has put me in a big trouble. I’m confused right now because I have suffered a huge loss. I need to get someone to buy the dollars before it crashes further,’’ he said on the phone on Thursday.

Meanwhile, the naira appreciated by 0.76 per cent at the official market to close at N793.28 to the dollar on Thursday from N799.32/$ on Wednesday according to details on FMDQ OTC Securities Exchange.

Data from the platform which oversees official foreign exchange trading in Nigeria revealed that the highest price recorded within the day’s trading was N1,018.60/$, and the lowest price was N730.00/$.

On Thursday, news broke that the apex bank had begun to clear some of its foreign exchange backlogs. Sources close to the matter confirmed that the apex bank had settled some of its FX obligations with certain banks such as Citibank, Stanbic IBTC, and Standard Chartered, among others.

Recently, the Federal Government announced it was expecting $10bn to clear forex backlogs and stabilise the naira. The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed this at the 29th Nigerian Economic Summit.

He said, “In addition, from the supply of foreign exchange through NNPC, increased production, reduced expenditure, from transactions such as forward sales, from our discussions with sovereign wealth funds, which are ready to invest and provide advanced alongside that investment, there is a line of sight of $10bn worth of foreign exchange in the relatively near future in weeks rather months.”

JP Morgan’s Report

JP Morgan’s Reaction in a report published on Tuesday said it expects authorities to maintain some willingness for a somewhat flexible exchange rate (at least relative to recent years)

However, the large backlog of unmet FX demand and relatively low net international reserves make it a challenging task. Authorities hope to secure around US$10bn of new inflows to help ease the FX backlog challenge, but they should also consider other FX reform measures

JP Morgan disclosed that Nigeria now ranks highest on its risk-reward scorecard due to elevated carry. It however said, “We remain on the sidelines waiting for better line of sight on FX inflows and more consistent liquidity tightening measures Central Bank of Nigeria held its second OMO auction of the year, pushing short-term rates higher, thus further normalizing policy.

Expected sources of funding

According to JP Morgan, ”The government is hoping to secure up to US$10bn in FX inflows over coming months in a bid to clear a substantial portion of the FX backlog and improve market liquidity. Media reports suggest this is split between US$7bn from the securitization of future gas dividends to the government, and US$3bn from the securitization of future oil-related dividends.

“The ability of the government to raise such amounts via these channels may be challenging given the US$3bn expected from Afrexim has been delayed for months, while Nigeria LNG Limited’s historical dividends to the government have fallen well short of US$2bn annually. It also doesn’t help that the NNLG Managing Director recently confirmed that the company is operating at 50% capacity on its Train 1-6 fields and plans to expand its processing capacity with Train 8 is no longer feasible. That said, the government appears to be in the final stages of agreeing a US$3.5bn package with the World Bank (part of which would be direct budget support, while the rest will be project-linked) with other reports suggesting funding from sovereign wealth funds in the middle east may be on the cards.”

(Punch)

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No plans to redenominate naira — CBN

The Central Bank of Nigeria has said that it has no plan to redenominate or restructure the naira notes in 2024.

The apex bank said this on Tuesday in a statement signed by its Director, Corporate Communications, Isa AbdulMumin, and shared on its X handle.

The CBN urged Nigerians to disregard the wide circulation of a text message suggesting that the Bank plans to redenominate the country’s legal tender next year, noting that the contents of the message are misleading.

“We are concerned that this narrative, which we had refuted before now, appears to be gaining traction with several debates on the implication of
such a policy for the Nigerian economy.

“We wish to reiterate that the contents of the message are misleading. The authors of the message, in their mischief, modified text eked from an old policy move by a previous CBN Governor in 2007 to make it appear recent.

“For the avoidance of doubt, there is currently no plan by the Bank to restructure and redenominate the naira.”

However, it added that while the bank may be considering reforms, “such are subject to laid down procedures in line with the provisions of the CBN Act, 2007.

“The public is hereby advised to ignore the news report, as it is speculative and calculated to cause panic in the polity,” AbdulMumin added.

The bank had in 2022 redesigned the N200, N500 and N1000 notes.

(Punch)

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Nigerians spend $340.84m forex on education in six months – CBN

Nigerians seeking admissions to foreign universities spent $340.84m to fund their application between January and June 2023, findings by the PUNCH have shown.

This figure is according to the Central Bank of Nigeria’s data on the amount spent on educational services under the sectoral utilisation for transactions valid for foreign exchange.

The apex bank said that in April 2023, a total of $40.54m was spent on foreign education, while noting that $48.81m was spent in May 2023.

However, in June 2023, there was a significant decrease as the bank stated that $32.61m was spent.

When compared with $218.88m recorded in the first quarter of 2023, which is a decrease of $96.92m or 44.28 per cent.

Also, the quarter performed poorly when compared with figures from the second quarter of 2022 with a performance decrease of $124.42m (50.5 per cent).

The PUNCH reported that the monies remitted to foreign academic institutions were without significant reciprocity in the form of inflows from foreign sources to the local education sector.

Experts however predicted that the poor supply on CBN part meant migrating students had been forced to source dollars from Bureau De Change operators, owing to delays by banks to process respective Form A.

Recent data (which was the last released document by the commission) released by the Home Office of the United Kingdom revealed that the number of study visas released to Nigerians increased by 222.8 per cent, with 65,929 issued as of June 2022 as against 20,427 during the same period in 2021.

The Central Bank has a backlog of accumulated forex demand on the official market, which effectively forces individuals and businesses to head to the black market if they need dollars.

But dollar flows to Nigeria had been falling in the last few years due to declining investment and lower exports of crude oil, which account for more than 90 per cent of the country’s export income.

Speaking in an earlier interview, the National President, Academic Staff Union of Polytechnics, Dr. Anderson Ezeibe, said the failure of the government to invest adequately in the education sector had negatively impacted the education sector.

“You go to tertiary institutions and you see dilapidated buildings, lecturers and students alike are not happy, students do not have access to good equipment for practicals, and at the end of the day, the system continues to churn out half-baked graduates.

“The only solution to this is for the government to invest fully in the sector. If we operate world-class schools in the country, there will be no need for people to go to other countries to obtain a good education.”

A Professor of Education at the Federal University of Technology, Minna, Prof. Alabi Thomas, also blamed the migration on government policies which, according to him, have continued to cripple the education sector.

(Punch)

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Otukpo robbery: CBN directs banks to open from 8am to 2pm in Benue

The Central Bank of Nigeria,CBN, has put precautionary measures in place against future attacks on commercial banks in Benue State.

The development followed the attack on some banks in Otukpo town, Benue State, by armed robbers on Friday, October 20, 2023.

The CBN took the measures at an emergency meeting with the management of the affected banks in Makurdi, Benue State capital.

In a communiqué issued at the end of the meeting, the CBN, among other decisions, directed that “all banks and her branches across the state with immediate effect [sic] commence her business operations from 8am-2pm, Monday to Friday till January 30, 2024, when a review of the security situation will be carried out at the Bankers Committee for amendment accordingly”.

The communiqué further stated that the Armored Personnel Carrier (APC) support be increased to two hundred thousand naira (N200,000.00) for Deposit Money Banks (DMBs) while CBN is increased to five hundred thousand naira (N500,000.00).

“Each bank is mandated to make its payment on or before October 27, 2023,” the communique directed.

(Daily Post)

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