The Nation Newspaper

Tag: Central bank

  • How agencies defraud govt, by Central Bank

    How agencies defraud govt, by Central Bank

    The Federal Government has uncovered agencies which pay it in naira after collecting revenue in dollar.

    It has launched a probe into the agencies’ “fraudulent activities”, Cross River State Governor Ben Ayade told reporters yesterday after the National Economic Council (NEC) meeting chaired by Vice President Yemi Osinbajo (SAN).

    NEC comprises the vice president as chairman; the 36 state governors and the Central Bank of Nigeria (CBN) governor are members.

    Some of the agencies, Ayade said, were the Nigerian National Petroleum Corporation (NNPC), Nigerian Maritime Administration and Safety Agency (NIMASA) and Nigerian Ports Authority (NPA).

    Ayade, who was with Governors Olusegun Mimiko (Ondo), Aminu Tambuwal (Sokoto) and Darius Ishaku (Taraba), said Godwin Emefiele informed NEC of the development.

    Ayade said investigations were ongoing.

    He said: “A brief report on the Federal Government agencies remiting dollar revenue in naira into the Federation account was also given by the CBN governor.

    “He said investigations are ongoing. Such agencies include but not limited to NNPC, NIMASA and NPA.”

    Ayade said the Ministry of Finance Permanent Secretary briefed the council on the excess crude account, which he put at $2.25 billion as at October 15.

    On the grant of provisional loans to states based on collaterisation of the Excess Crude Account (ECA), the governor said: “The CBN governor briefed that 27 states have made request for the N10 billion facility and it is currently being processed.

    “He has called on the affected states to complete all necessary documentation for the money.”

    According to Ayade, as at Thursday (yesterday), not all states had indicated interest in the ECA collaterised loan.

    The vice president, he said, also briefed council on the detail of the refund on excess expenses incurred by states.

    All the states that have followed the right procedure and due process in incurring expenses, he said, were being processed for refund.

    Ayade said there was an update on states affected by flooding, adding that the vice president confirmed that the government is doing everything to assist them.

    Mimiko said the bail out funds would not be enough for states to settle salary arrears.

    According to him, there is no plan to divert the bailout fund for other purposes.

    On flooding, Mimiko said: “The detail was not discussed as per what individual states should be doing. But there is no question about the fact that individual states are customising their responses depending on the level and implication of the flood that has been experienced.

    “What council discussed was the mechanism whereby the Federal Government will come up with a holistic assistance.

    “We have not discussed the detail; the detail may be discussed at the next meeting but it does not mean that the states are not intervening to mitigate the disaster.”

    Tambuwal said his state would relocate some of its flood-ravaged communities.

    He said: “In any case, the Federal Government is working hand in hand with the states in ensuring that this challenge is actually addressed

    For example, I am sure the Federal Government will use the instrumentality of ecological fund to support states as has been the case in the past.

    “In Sokoto State, we are planning to come up with the strategy of harvesting the water, treating and establishing some new dams that will serve as proactive measures that will prevent the flooding from continuing in the years to come.”

  • Central Bank to probe travellers with over $10,000 at borders

    Central Bank to probe travellers with over $10,000 at borders

    THE Central Bank of Nigeria (CBN) yesterday said it would investigate travellers breaching the rule by moving more than $10,000  in cash or negotiable instruments across the nation’s borders.

    CBN Director, Corporate Communications Ibrahim Mu’azu said in a statement that henceforth, the transportation of cash or negotiable instruments in excess of $10,000 or its equivalent by individuals in or out of the country shall not be allowed unless such funds are declared at the borders.

    Mu’azu said those that go contrary to the law would have to forfeit the undeclared funds or negotiable instrument or would be imprisoned  for a term not less than two years or both.

    He expressed CBN’s concerns on the increasing trafficking of large amounts of foreign currency across the borders.

    The CBN director said the practice was against Section 2 (subsection 3 to 5) of the Money Laundering (Prohibition) Act 2011 (as amended).

    The law, he said, stipulates that transportation of cash or negotiable instruments in excess of $10,000.00 or its equivalent by individuals in or out of the country shall be declared to the Nigerian Customs Service (NCS).

    The apex bank’s spokesman added that the NCS shall report any declaration made pursuant to subsection (3) of this section to the Central Bank of Nigeria.

    “Any person who falsely declares or fails to make a declaration to the Nigerian Customs Service pursuant to section 12 of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, F34, LFN, 2004 is guilty of an offence and shall be liable on conviction to forfeit the undeclared funds or negotiable instrument or to imprisonments to a term of not less than two years or both,” he stated.

    Mu’azu said on receipt of any notice of declaration from the NCS, the CBN would investigate the source of fund and seek justification for the possession of such volume of cash to ensure that no money laundering activity was involved.

    “Those affected will also be expected to provide evidence of payment of taxes and duties related to the cash transaction. For the avoidance of doubt, the general public is hereby notified that the CBN (in collaboration with other relevant regulatory and security agencies) will promptly apply appropriate sanctions and penalties for contravention of the provisions of this Act,” he said.

  • African Central Bank governors meet in Addis Ababa March 29

    African Central Bank governors meet in Addis Ababa March 29

    The Economic Commission for Africa and the African Union Commission will host the second Caucus of African Central Bank Governors, in Addis Ababa in the margins of the eighth Joint Annual Meetings of the AU Specialised Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration and the ECA Conference of African Ministers of Finance, Planning and Economic Development. The Conference will be held on the theme, Implementing Agenda 2063 – Planning, Mobilising and Financing for Development. The meeting will take place on 29 March at the UN Conference Centre.

    The main objectives of the Caucus are to identify concrete follow-up measures to the outcomes of the first Caucus, which was held in Abuja in 2014. They will also look into measures to enhance the role of governors of central banks in the consultations leading up to the Third International Conference on for central banks in Africa.

    The Caucus, which brings together the governors of central banks of a number of African countries, will provide a unique opportunity for governors to engage in structured dialogue on the issues that they would like to see reflected in the outcome document. An action plan will be developed, outlining a road map for the implementation of the proposals of the first Caucus that was held Financing for Development, which will take place in July 2015 whose outcomes are expected to have direct implications in Abuja.

  • Absence of judge stalls hearing in Sanusi’s suit against FG

    Absence of judge stalls hearing in Sanusi’s suit against FG

    The absence of Justice Gabriel Kolawole of the Federal High Court, Abuja, on Wednesday stalled hearing in the suit filed by suspended CBN Governor, Malam Sanusi Lamido Sanusi.

    Sanusi had, through his lead counsel, Mr Kola Awodein (SAN), challenged his suspension by President Goodluck Jonathan and prayed for an order to re-instate him as CBN Governor.

    At the hearing of the case on Wednesday, Justice Kolawole was not in court and an official informed the parties and counsel that the judge was attending a seminar.

    All parties and counsel were asked to come back to court on March 19.

    It will be recalled that on Feb. 27, Kolawole, ruled in Sanusi’s motion ex-parte seeking an interlocutory injunction from the court for a reversal of the president’s decision.

    “I feel hesitant and constrained to grant the plaintiff’s application because it would be unfair to grant such an application without affording the respondents a hearing.

    “It is unsafe, judicially speaking, to embark on far-reaching interim orders which have all the attributes of a mandatory

    injunction without according the defendants a hearing,’’ he said.

    The News Agency of Nigeria (NAN) also recalls that Sanusi had on Feb. 24, approached the court with a motion ex-parte seeking an interim order against the President, Attorney-General and their agents.

    He had prayed the court to restrain the defendants from “obstructing, disturbing, stopping or preventing him in any manner whatsoever, from performing the functions as Governor of the Central Bank’’.

    Sanusi had also sought to be allowed to fully enjoy the statutory powers and privileges attached to the office, arguing that any delay might cause him irreparable and serious damages.

    The plaintiff’s motion was supported by a nine-paragraph affidavit and two exhibits attached and marked as Exhibit AA1 and AA2.

    Exhibit AA1 is a copy of his appointment letter dated June 2009, titled: “Appointment as Governor of Central Bank of Nigeria’’.

    Exhibit AA2 is his suspension letter dated Feb. 19, 2014 from the office of the Secretary to the Government of the Federation, titled “Suspension from office’’, the subject of the suit.

     

  • Nigerian rulers’ five cardinal sins

    SIR: Nigeria is bedeviled by five cardinal sins perpetrated by the rulers. The Original Sin from which the others emanate is Indiscipline. The five cardinal sins identified here are corruption, politicization of religion, election rigging, neutralization of executive members of workers’ unions, and mass media gagging. I don’t want to mention ethnicism, because favouring “one’s own” seems all too natural, which is the reason Nigeria has the federal character policy in place, unfortunately more in the breach than in compliance; worse of all ignoring rotational presidency. Indiscipline of course means that you allow your emotion and feeling to get rid of your right-thinking faculty and so do wrong things, such as truncation of rotational presidency.

    Corruption is the number one cardinal sin built into the Nigerian system. Some parastatals are allowed to keep a percentage of their income for running cost. Meanwhile, the state or headquarter pays the workers’ salaries and allowances. The percentage kept by the parastatal for running cost grows into millions and the Director helps to clear the excess one way or another. Or, take another example; the Central Bank is allowed to keep “Social responsibility fund” and so donating buses, classrooms and halls, as deemed fit! Is that part of the purpose of a Central Bank in developed countries, or is part and parcel of the Nigerian factor? You also have explicit corruption in clear cases of misappropriation. I don’t know where to place Oduahgate, etc.

    Politicisation of religion is second on the cardinal sin list. It is explicit in Muslim leaders who claim that Islam is inextricably bound-up with politics. Meanwhile, some or many Christians keep saying Jesus is the answer to all problems, while some other Christians join in using religion to perpetrate corruption and political destabilization of Nigeria.

    Not less virulent is the third cardinal sin, election rigging. The Peoples Democratic Party banks heavily on it, and so has staunchly resisted electoral reform toward a truly independent electoral commission.

    The fourth cardinal sin, neutralization of executive members of workers’ unions, is grave because it means that checks and balance are eclipsed. That is one clear area where Ghana is doing far better than Nigeria. What is democracy without checks and balance? Ditto those who gag the mass media. All this is written to elicit repentance, positive reaction, or revolution.

     

    •Pius Oyeniran Abioje, Ph. D,

    University of Ilorin.

  • Central banks revise liquidity ratio for banks

    The Basel Committee has released revised Liquidity Coverage Ratio (LCR) for banks following endorsement the endorsement of the new rule on January 6, 2013 by the Group of Central Bank Governors and Heads of Supervision (GHOS).

    The LCR is an essential component of the Basel III reforms, which are global regulatory standards on bank capital adequacy and liquidity endorsed by the G20 Leaders.

    In a statement made available to The Nation, the Basel Committee noted that the LCR is one of the key reforms to strengthen global capital and liquidity regulations with the goal of promoting a more resilient banking sector.

    “The LCR promotes the short-term resilience of a bank’s liquidity risk profile. It does this by ensuring that a bank has an adequate stock of unencumbered high-quality liquid assets (HQLA) that can be converted into cash easily and immediately in private markets to meet its liquidity needs for a 30 calendar day liquidity stress scenario. It will improve the banking sector’s ability to absorb shocks arising from financial and economic stress, whatever the source, thus reducing the risk of spillover from the financial sector to the real economy,” it stated.

    The LCR was first published in December 2010. At that time, the Basel Committee put in place a rigorous process to review the standard and its implications for financial markets, credit extension and economic growth. It then committed to address unintended consequences as necessary.