Professor Moghalu is a former Deputy Governor of the CBN (2009-2014)
I have seen in the mainstream media and floating around on social media including Whatsapp, a report purported to be that of the CBN Special Investigator appointed by President Tinubu. I have some comments on this development.
1. The “report” has no signature appended, so we can’t assume it is the real and official report.
2. Assuming it is in fact the real report, it’s wrong for such a sensitive report to have “leaked” to the public before the President and his Government have reviewed and spoken to it. This is because the “report” talks of “chargeable offenses” and mentions specific individuals it recommends to be prosecuted in addition to Emefiele. This is a media trial and prejudices the rights of these individuals named or referred to. This is NOT how a report into the Central Bank of Nigeria should be handled.
The central bank of any country is a very sensitive institution and confidence (or the lack of it) in the institution has practical consequences on the ground for Nigeria’s economy. As much as the Bank and its leaders ought to be accountable for their official actions, we must consider the continuing damage this kind of sensationalism (which, knowing our country, nothing much is likely to come of it at the end of the day) does to Nigeria’s economy, image, and the institution of the CBN itself. When it comes to law, allegations are simply allegations unless and until proven in a court of law.
3. The foregoing notwithstanding, my views on Emefiele’s PERFORMANCE as CBN Governor have been a matter of record even when many now opining on the matter of his performance on the job were mute. He is without debate the WORST and MOST damaging Central Bank Governor in Nigeria’s history- incompetent and ill-prepared for the role, and from all available information from his actions, doubtlessly severely integrity-challenged. Four things make this clear:
a) his performance regarding the STABILITY of the Naira exchange rate, as well as inflation;
b) the brazen illegal provisions of Ways & Means lending to @NigeriaGov ;
c) Emefiele’s illegal attempt to run for President, in clear contravention of Section 9 of the CBN Act of 2007 which precludes the Governor and Deputy Governors from engaging in activities outside their functions; and
d) the incompetent manner in which the Naira Redesign Policy was handled, and its consequent negative, indeed disastrous impact on Nigeria’s economy.
4. While the law should certainly take its course, it is worth noting that an exclusive focus on the CBN as a “fight against corruption” may come to seem more as vendetta than anything else IF other sensitive entities such as the NNPC, Nigeria’s national oil company, are not subjected to a similarly vigorous searchlight. Corruption has robbed Nigeria of its destiny and impoverished our citizens while enriching at insane levels a select few. Combating it has to be a holistic affair, not just politically convenient media trials.
4. Emefiele’s fame & infamy today certainly calls into question the self-serving attitude of our elected political leaders to sensitive appointments like that of CBN Governor as opposed to a focus on the national interest. Who appointed Emefiele as CBN Governor in 2014 and why? Who re-appointed him in 2019 (despite his obvious -even then – weak performance) and backed his malfeasance cloaked as “policy”? We like theatre in Nigeria, but the thing about entertainment is that it tends to be chimeric, vanishing from view (and even memory sometimes) a little while after we are “in the moment”. Nigeria’s political leadership culture and governance need a complete overhaul. The current approach to the matter to Emefiele, who undoubtedly deserves his trial, is not quite the optimal path when placed under close scrutiny.
Our political leaders who appoint incompetents and crooks to sensitive positions in the government for their own selfish aims, and back the supposedly “official” acts of those officials, have as much responsibility as the officials for the economic sabotage of Nigeria’s economy.
In countries with real cultures of accountability, Presidents @GEJonathan and @MBuhari would have explanations to give for the collapse of Nigeria’s central bank under Emefiele and the subsequent trauma to Nigeria’s economy.
Order CBN to honour Letters of Credit– SINET to Tinubu, NASS
Amidst several hardships facing the Nigerian populace, the Social Integrity Network, (SINET) has urged President Ahmed Bola Tinubu and the leadership of national assembly to compel the Governor of Central Bank of Nigeria (CBN) Mr. Olayemi Cardoso, to order and reconsider honouring the forward contracts that are genuinely backed up with proper compliant documents for utilisation against each Letters of Credit (LCs) opened by the commercial banks using the forwards as a hedge.
The group also urged the Federal Government to make further clarification concerning a statement credited to the CBN Governor on issues regarding the alleged and well-publicized revelations of a $2.4 billion forex trading fraud.
SINET recalled that “On February 5, 2024, the governor of CBN made this declaration in both his interactions with Senate committees and his interview on a national television, following the engagement of Deloitte Management Consultant to conduct a forensic investigation where he claimed that the said amount was uncovered.
A statement issued on Monday by SINET national coordinator, Ibrahim Issah, disclosed that “On the contrary, we wish to unequivocally state that these claims lack merit and do not take into account the consequences they will have on businesses, public perception, or the economy of our cherished nation and its implication on forex both at home and abroad.”
According to him, “Without sentiment, the claim is completely falsehood and unacceptable as he, the CBN governor, failed to consider its economic implications. It is pertinent to state that genuine businessmen and women across the country, borrowed Funds from commercial banks, some with interest rates as high as 30% to secure forex from the CBN through their respective commercial banks since CBN does not sell the dollars to individuals directly.
“The same funds have been deposited with CBN for the past one and half years for forwards allocated for which the Apex Bank is now claiming were fraudulent transactions. May we remind Mr. Governor that while the CBN allocated the forwards after collecting the naira for each forward allocated, the commercial banks used these same forward contracts as a hedge and issued Letters of Credit (LCs) to their various customers against their offshore credit lines and also as a sovereign guarantee to their offshore banks which stand unpaid till today as a result of the failure of CBN to honour the various forward contracts.
“May we also remind our CBN Governor that as a result of their failure to honour these contracts, the outstanding foreign loans continue to accrue interest (post-negotiation charges), which the commercial Banks are passing to their customers: the same customers you say do not have a genuine claim.”
The statement further stressed that, “The public would like to ask Mr. Governor the following questions: What will happen to the foreign bank that is expecting their payment to be paid back? What will happen to the businessmen and women who had borrowed Naira from commercial Banks and paid the same into the CBN account for the purchase of forex for over eighteen months? Who will bear the interest charged on borrowed funds locally? Who will bear the charges running against the offshore lines used in establishing Letters of Credit? What will happen to the businesses? What will happen to the employees that are dependent on the survival of the businesses that CBN is trying to kill?
“We call upon the senate president and, in fact, the president and Commander In-Chief of the Federal Republic of Nigeria to call the CBN governor to order and reconsider honouring the forward contracts that are genuinely backed up with proper compliant documents for utilisation against each Letters of Credit (LCs) opened by the commercial banks using the forwards as a hedge.
“Let us state categorically that the CBN is killing businesses by cancelling the forward contracts that were sold to them about 18 months ago at the rate of N450/dollar and now selling the same funds to the commercial banks and directing the bank to sell the money at the rate of 1,500/dollar to the same businesses who initially had a forward contract at the rate of N450/dollar.
“May we also remind Mr. Governor, that failure to honour these forward contracts is taking commercial banks longer time to clean the offshore lines already used for establishing Letters of Credit against which shipments have been done and payment made to LC beneficiaries by the offshore banks. The delays of the commercial banks to settle their Forex obligations to their offshore banks is making our country risk to be very high.
“Lastly, the public will like to call on the coordinating minister for the economy, Mr. Wale Edun to engage the CBN regarding this issue of undelivered forward contracts because at present in Nigeria, almost 60% of companies in the manufacturing sector have been closed due to the volatility of Forex in Nigeria in order to avoid the other 40% from also closing down.
“This will go a long way to help the few remaining manufacturing companies still in operation in Nigeria and also encourage the new investors that the president and commander in-chief of the federal republic is trying woo to bring their investments to Nigeria.”
Senate Passes Sen Ashiru’s Bill To Establish National Road Transport Council
The Senate on Tuesday granted first reading to a bill seeking to establish a National Road Transport Council which is to be saddled with the responsibility of regulating the road transport industry and the transport profession in Nigeria.
The bill titled National Road Transportation Council (Establishment) Bill 2024 is sponsored by Deputy Senate Leader Senator Oyelola Ashiru and was introduced to the Senate plenary after the Senators resumed from their 30 day recess.
Further details of the bill fronted by the Kwara South Senator reveals that if signed into law a council board will be established which shall consist of a Board chairman and six members drafted from each geo-political zone of the country.
More insights of the bill sighted by the Sun also states that the board shall be presided by a representative from Ministries of transport, commerce and industry and aviation and they shall not be below the rank of a Director.
As highlighted in the explanatory memorandum of the bill , [b]the functions of the proposed council include; creating an effective regulatory framework on road transport service operators; determining the standard of knowledge and skills required for road transport service operators; encouraging the advancement of education in road transportation; ensuring accessibility of road transport facilities, [/b]channels, and routes; monitoring the performance of the regulated road transport industry; conducting background check on road transport service operators; registering all road transport service providers and determine the fees for such registration; setting guidelines and general policies for road transport service operators; updating the Federal Government on its activities and progress through annual and audited reports; reviewing progress and suggest improvement within the provisions of this Bill and do such other things as are necessary or incidental to the objects of the Council under this Bill or as may be assigned by the Federal Government.
The bill received the nod of the Senators via voice votes presided by the Senate President Godswill Akpabio shortly after it was introduced to the floor of the Red Chambers by the Leader of the Senate, Senator Opeyemi Bamidele.