Ban on sale of forex: How saboteurs laundered DTA sold to foreign students ― CBN
• As EFCC moves to end menace of fake visa
The Central Bank of Nigeria (CBN), on Thursday, gave a vivid account of how some Nigerians engage in the laundering of foreign exchange procured by foreign students and its recent intervention which led to the ban on the sale of foreign exchange to Bureau-De-Change Operators in the country.
CBN Director Legal Services, Mr Kofo Salam-Alada, stated this in Abuja, at the Roundtable conference on: ‘Depreciating value of naira and the Nigerian economy’, organised by the National Institute of Legislative and Democratic Studies (NILDS), during which various stakeholders drawn from the academia and Association of Licensed Bureau-de-Change operators frowned at the impacts of the recent policy statement issued by Central Bank of Nigeria (CBN) on over N300 billion investment of the BDCs operators.
While noting that the ban on the sale of foreign exchange to BDCs operators has been yielding positive results, he lamented that some of the operators who applied for foreign exchange for overseas students were given only $100 and repatriated the DTA back to the country for onward on major streets.
While decrying the associated security challenges with foreign exchange, he said: “I’m happy to see on the panel some law enforcement agencies. Information we are receiving from the various spots of exits in Nigeria will tell you that Nigerians are the enemies of the country itself. How do you see a scenario where people are now hunting for students studying overseas, they provide the naira for these students to buy DTA, they take these DTA off these students, pay them $100 to travel and at the point of exit, law enforcement agencies seeing an endorsed of the passport that these person has bought DTA and it is not on him or her.
“Number two, a lot are being arrested at the point of exit with over 500 pieces of debits cards which they are taking abroad and they start removing $100 and $200 already stamped by the banks and then returning same back to Nigeria to be sold on the streets. It is disheartening.
“As we are trying on one hand to do certain things, people are waiting on the wings to actually rubbish your activities. So for us in Central Bank the steps we are taking as a plus, it was not just for this, but other security issues.”
While noting that the BDCs are recognised as authorised buyers and sellers under the 1995 foreign exchange Act to be amended, he argued that the law is due for review, adding that certain interventions in the economy as initiated by the CBN were geared towards increasing productivity in certain sectors, hence reducing the reliance of foreign exchange.
On his part, Executive Chairman of Economic and Financial Crimes Commission (EFCC), Abdulrasheed Bawa, reiterated its resolve towards the enactment of the legislative framework that will help in coordinating and ensuring the return of the looted funds back into the country with a view to addressing the revenue gaps.
The EFCC Chairman who was represented by Director of Operations EFCC, Mr Abdulkareem Chiko, observed that the prevailing economic situation has constrained the government’s ability and capacity to generate the required revenue and provide the needed infrastructure will address electricity supply, access to good road, among others, and ultimately increase the cost of production.
“But from all these from the angle of the commission, there can be a very good contribution if there is a push on the side of the commission to ensure that there is a legislative framework to coordinate and ensure the return of the loots and funds back into the country to address the revenue gap,” he said.
He also assured Nigerians of the Commission’s effort toward tackling the menace of fake visas, by working with Embassies with a view to sanitising the process which has led to an increase in the demand for foreign exchange.
“So what we are trying to do is have a system whereby you can confirm if this visa is genuine or not there and there. Because anybody that wants forex and wants to travel genuinely will go through the process of getting visa. That angle of looking at if the visa is genuine or not is not there yet, so you can as well fix any passport or visa on that passport, so it’s more like saying just do the needful and I will give you the dollars.
“But if you are working with embassies, it could make it very easy, there and then you can send those things and within two or three days, once it’s confirmed that it’s fake, then EFCC will take over from there and we will get to the root of the matter,” the EFCC chairman noted.
On his part, Deputy Chairman, House Committee on Finance, Hon. Saidu Abdullahi unveiled the Committee’s plan to interrogate various intervention programmes initiated by the Central Bank of Nigeria (CBN).
“For the first time, I must say in the history of this country we have a government that’s making good with a promise to diversify the economy. Of course, agriculture is being given that required attention, I think some programmes are targeted towards changing the economic fortunes of the country via the agricultural sector, we have the Anchor Borrowers Programme and so on.
“For quite a while now, I have called on us to even measure the performance of CBN in terms of achieving their set out objectives. It is incumbent on us to take CBN to task on how far they’ve come to meet up these objectives.
“These policies they are coming up with how good have they been, in terms of the objectives they set out right from the onset? It’s very important, that’s why I thought it would have been okay if they are part of this discussion. At the House, we are really interested in making arrangements with the CBN to find out areas of intervention, what policy decisions are they coming up to counter or mitigate the crisis we are having in the foreign exchange market. I believe within the shortest possible time we will be able to engage them,” he noted.
On his part, NILDS Director-General, Professor Olanrewaju Sulaiman, who noted that most developing countries such as Nigeria depend on the import of machineries, spare parts and other finished goods for capital development and consumption purposes, underscored the need for policy and fiscal authorities to prioritize its management.
“This requires foreign exchange reserves for the build-up to ensure that panic measures are not resorted to when foreign exchange receipts dwindle or when there is disequilibrium in the foreign exchange market caused by an inadequate supply of foreign exchange reserve.
“It should be noted that instability in the exchange rate have ripple effects on other economic variables such as interest rates, inflation rate, unemployment, money supply etc. these facts underscore the importance of exchange rate to the economic well-being of every country that opens its border to trade in goods and services. The importance of the exchange rate derives from the fact that it connects to the price systems of two different countries making it possible for international trade to make a direct comparison of traded goods or link domestic prices to international price.
“For a long time in Nigeria, exchange rate management and the achievement of a realistic exchange rate for the naira have continued to pose a great challenge to macroeconomic policy actors because of its significance in bringing about economic growth. This is why one of the key mandates of the Central Bank of Nigeria (CBN) is to maintain a stable exchange rate in order to achieve its objective of price stability because domestic prices are very responsive to exchange rate fluctuations.”
While acknowledging CBN’s recent effort to stabilise the country’s exchange rate through the ban on the sale of forex to BDCs, he, however, lamented that: “the decision by the CBN instead of stabilising the Naira further exacerbated Forex crisis as we continue to witness the decline in the value of Naira, especially in the parallel market.
“This development has raised a great cause for concern among citizens, policy analysts, academicians, professionals, amongst others. This has equally compelled the need for NILDS to quickly assemble experts to engage in a genuine and honest conversation on the issues with the view to proffer workable solutions.”
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