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HEDA backs Reps on CBN, FIRS forex probe
The Human and Environmental Development Agenda (HEDA Resource Centre) on Sunday declared support for the resolution of the House of Representatives to probe critical financial institutions on forex transactions. The human rights group described the decision as a milestone that will open a can of worms of illicit deals in the sector.
There were reports last week that the House of Representatives will investigate the Central Bank of Nigeria (CBN) and the Federal Inland Revenue Services (FIRS) over forex transactions and allocations. Economic experts estimated the loss in illicit forex transactions to be in the range of $30 billion which they insisted also weakens the naira in the international market.
Human and Environmental Development Agenda (HEDA Resource Centre) in a letter addressed to the House of Representatives signed by its Chairman, Comrade Olanrewaju Suraju, commended the lawmakers’ decision to beam the searchlight on the apex bank, describing it as an important turning point in ensuring the CBN and FIRS act in accordance with global best practices. HEDA in the letter with the caption – Solidarity and Support for the Probe of Central Bank of Nigeria Over forex Racketeering – was addressed to the Chairman, House of Representatives Committee on Finance, Banking and Currency, James Faleke, acknowledged that the investigation and scrutiny by the House of Representatives is a step in the right direction, adding that the group is willing to support in providing any further clarifications and answer to any questioning that would further the cause of investigation.
“The local and international communities are watching with keen interest the plan to probe the CBN and the FIRS on forex. There has been series of allegations of sharp practices in forex dealings against CBN and FIRS officials. The time to establish the truth has come,” HEDA declared.
The group that there have been lingering allegations of racketeering in the allocation of foreign exchange by the two leading foreign exchange hubs.
It was highlighted that the House of Representatives took the decision after adopting the motion brought under matters of urgent national importance by the Chairman, Committee on Finance, James Faleke; who had argued for the urgent need to rescue Nigeria from over $30 billion annual leakages arising from skewed allocation of foreign exchange.
The prime beneficiaries suspects were identified to include: the CBN – Autonomous, Interbank, Domiciliary and Over-the-Counter Purchases for the Importation of Physical Goods, Payment of Foreign Service Vendors, Dividend Repatriation, Foreign Loan and Interest Payments, as well as Foreign Currency Denominated Contracts’ Payments by Companies in Engineering, Procurement, Construction, Installation and Marine Transportation.
HEDA, revealing its delight with the probe resolution, reiterated that the leakages by CBN and other agencies have resulted in the loss of revenue worth over $30 billion.
The House of Representatives Committee of Finance, Banking and Currency will conduct public hearing for a critical look at various originating documents maintained by the CBN, banks, forex dealers, FIRS, importers and other beneficiary companies. The committee is expected to make a formal report of findings and provide necessary recommendations toward the regularization of the problems aimed at putting a stop to the menace in the future.
HEDA noted that the step taken by the Committee aligns with the engagement the organization had with the CBN in the recent past when it wrote a Freedom of Information request to the CBN during which the bank refused to disclose the beneficiaries of the exchange rate differential.
HEDA was of the view that there are strong suspicions that the report relayed that the bank gave subsidies on the foreign exchange through channels such as the forex intervention scheme which is less than being transparent.
“It was reported that the alleged schemes were not beneficial to all and deserving industries. According to reports, during the Former President Goodluck Jonathan’s regime, from 2015 to 2017, pilgrims benefited from subsidies in the exchange rate ranging from being given the dollar at N160 instead of N190, N197 instead of N297 respectively,” the group stated.
HEDA recalled that in the Freedom of Information Request submitted, it detailed breakdown of the schemes created by the Central Bank of Nigeria to sell the dollar at a subsidized rate, the value of the amount that has been given out so far for each scheme, the breakdown of the value per sector and the detailed information on the beneficiaries of the various schemes inclusive of the forex intervention scheme
HEDA declared: “Our request for information on the above listing was met with ridiculous response from the Central Bank of Nigerian vide a letter dated the 23rd December 2019, stating that the Apex bank was not involved in pilgrim’s subsidized exchange rate nor any subsidized exchange rate scheme.
“The refusal by the Central Bank of Nigeria prompted our organization to invoke the provisions of Section 20 of the Freedom of Information Act, 2011 by instituting an action before the Federal High Court, Abuja. The Letters and the court processes referred are hereby enclosed.”
The group said the investigation to be embarked upon by the committee adequately and accurately meets HEDA’s organization’s delight, considering the steps the organization had taken to demand answers from the Apex bank in line with the allegations of racketeering in foreign exchange utilization and allocation by the apex bank.
HEDA expressed the hope that the investigation by the House Committee will shed light on the matter, appropriately set the tone on the issues and putting the agencies on the path of accountability and transparency.