CBN
Governor, Godwin Emefiele
Investigations have revealed how commercial
banks in the country are raking in millions of dollars from a foreign exchange
racketeering which has been fuelled by the acute shortage of hard currency in
the economy.
The
Central Bank of Nigeria has been rationing forex to prospective importers in
the past 16 months, after the global fall in the prices of crude oil, the
nation’s main forex earner.
The
situation has exacerbated over time and tens of thousands of applications for
forex by intending importers have been kept on hold by the CBN for months.
Sources
close to the forex racketeering said the dollar shortage had led to a situation
where prospective importers apply to the CBN through their banks for forex for
months without getting it.
The
continued acute scarcity, it was learnt, had been capitalised upon by the
commercial banks who are now selling several millions of dollars obtained from
the CBN on their clients’ names at huge premiums above the N199 to $1 official
rate approved by the central bank.
According
to sources familiar with the situation, thousands of helpless importers who are
in desperate need of forex to import products ranging from raw materials to
equipment are milked on weekly basis by the greedy banks.
Findings
by our correspondent showed that the scheme, which has been on for several
months as the forex scarcity worsens by the day, has made many top bank
executives multi-millionaires overnight.
Out
of about $10m to $25m (depending on the volume of demand by its customers) sold
by the CBN to commercial banks in some weeks, illegal profit to the tune of $5m
could be made by each of the banks involved in the forex racketeering.
A
prospective importer, who was recently approached by a major bank in the
country involved in the forex racketeering, told our correspondent that many
importers had no choice but to buy the scarce forex from the banks despite the
huge and illegal premiums being made by them.
Narrating
his ordeal, the importer, who spoke on the condition of anonymity, for fear of
being victimised by the bank, said:
“We need $295,000 to import some equipment. We
have been on the so-called CBN queue since October. The bank said no forex.
Recently, the bank called us that there was forex but not at the official rate.
They wanted to sell to us at N275 to $1. Out of about N81m we are to pay, only
about N59m goes to the CBN, which is the official rate. The balance goes to the
bank officials who get this allocation from the CBN. This is the type of stupid
money they make now, God saves Nigeria.”
Explaining
further, the visibly angry importer said:
“The bank’s officials said they had $5m as of
January 29. So calculate how much they made for that week alone.”
The
forex racketeering victim said the bank officials had told him that the
difference between the CBN rate of N199/$1 and the N275 to the dollar rate they
were offering him would be paid through a cheque written on a name to be
provided by the officials.
He
added, “The bank will debit my account at the CBN rate and then I will give
them a cheque for the balance.”
Another
importer, who shared a similar experience, said his own bank offered a deal of
N285 per dollar.
Further
findings revealed that commercial banks were carrying out
the forex racketeering through various means depending on the method through
which a prospective importer is planning to make payment to its prospective
supplier overseas.
Normally,
payments are made for imported goods through open accounts, Letters of Credit,
and Bills for Collection.
For
items that are not valid for forex (i.e items the CBN has excluded from the
list of items it provides forex for), payments are usually made through open accounts.
Letters
of Credit (a kind of guarantee for payment) are usually written by Nigerian
banks to their correspondent banks overseas on behalf of an importer, while
Bills for Collection involve a situation where the supplier releases the goods
to the importer and payments are made later. In any of the latter two cases,
importers or companies are required to get forex from the CBN which will be
transferred into the bank accounts of their suppliers overseas by their
commercial banks in Nigeria.
It
was learnt that a whole lot of forex racketeering involving opening bank
accounts overseas by bank officials and importers alike was now in place.
When
contacted, the CBN Director of Corporate Communications, Mr. Ibrahim Mu’azu,
said there was the need for aggrieved customers and importers to lodge a formal
complaints with the CBN over the matter, adding that this would enable the
central bank to commence thorough investigation into the matter.
“The
regulatory authority can only know when there are complaints. If there are
complaints, the CBN will investigate and rescue the situation,” Mu’azu said.
But
economic, financial experts and ex-bankers said the CBN and commercial banks
were culpable, noting there was the need for the duo to introduce mechanism to
arrest the huge fraud.
An
economist and Chief Executive Officer, Cowry Assets Management Limited, Mr.
Johnson Chukwu, said the CBN could be held responsible for the sharp practices.
Chukwu,
who is a former banker, said, “Human beings are economic agents and they will
always be tempted to follow the easy path. But the regulatory authority must
not create the loophole for such. The premium between the official exchange
rate and the parallel market rate is too much.”
An
Economist and Head, Investment and Research, Afrinvest West Africa Limited, an
investment bank and research firm, Mr. Ayodeji Ebo, also said there was the
need for the CBN to come up with a policy to close the huge gap between the
naira-dollar exchange rate on the parallel and official forex markets, adding
that the difference would continue to breed round-tripping and all manner of
unethical practices.
He
added, “Commercial banks also need to strengthen their internal controls both
at the head office level and branch levels. Most of these forex racketeerings
are carried out only in some bank branches without the knowledge of the head
office or even top officials at the branch level. So, the banks need to do
something quickly about this.”
The
Head, Investment Advisory, Sterling Capital, an investment bank, Mr. Sewa Wusu,
believes the CBN is making efforts to stabilise the forex market, noting that
issues coming in recent times would be addressed soon.
Meanwhile,
the CBN has asked banks to start publishing their returns on the utilisation of
the forex in the newspapers.
This,
it was learnt, was part of the measures by the CBN to check sharp practices in
the forex market.
For
the first two weeks of February, Stanbic IBTC Limited with a total of
$23,615,680.90 reportedly emerged the highest amount of forex purchased from
the CBN on behalf of its customers.
From
the publications, Stanbic IBTC was followed by First Bank of Nigeria Limited
and Guaranty Trust Bank Plc, with $19,774,888.26 and $19,709,354.41,
respectively.
Also,
Zenith Bank Plc with total returns of $18,707,309.97 came fourth, while Diamond
Bank reported returns of $17,515,474.
Access
Bank reported returns of $16,982,208.04 to occupy the sixth place, while the
United Bank for Africa Plc reported returns of $12,045,150.76.
By
Thursday, only seven banks had published their returns on utilisation of funds
purchased from the CBN, with others expected to do so today.
Source: PUNCH