News
Reps discover 5 banks withholding $5bn in forex
Reps discover 5 banks withholding $5bn in forex
On Wednesday, the House of Representatives discovered that five banks were withholding $5 billion in currencies.
Worried about the country’s foreign exchange market instability, the House directed the joint Committees on Banking Regulations and Banking Institutions to hold an investigative hearing into banks and financial institutions’ failure to comply with CBN directives on Net Open Position Limits.
The resolution was passed after the adoption of a motion on a Matter of Urgent National Importance regarding the need for banks to implement the CBN’s policies on holding excess long foreign exchange and net open position limits, sponsored by Chairman of the House Committee on Defence, Hon. Babajimi Benson.
In his lead debate, Hon. Benson, who observed that the apex bank is tasked with regulating the monetary policies of the country as provided for by the CBN Act, frowned upon the blatant disregard for extant financial regulations.
According to him, “Records show that GTB, Zenith Bank, UBA, and First Bank have a cumulative excess holding of over $5 billion as of January 2024. The only fully compliant bank is Stanbic IBTC, which has made all FX in its reserve available to their clients.
“It is important to note that these banks often obtain foreign exchange either through purchase, borrowing, or allocation from the CBN at the official rate of N461.5 to a dollar for their various customers but hoard them as part of their bank balances or reserves. They eventually sell at higher rates to make extra profit.
“It is this speculative practice that has prompted the CBN to issue a fresh directive centered around the Net Open Position (NOP) for all commercial banks. Simply put, the NOP measures the difference between a bank’s foreign currency assets (what it owns) and foreign currency liabilities (what it owes). Investigations have shown that banks hold far more forex than they require, thereby creating artificial scarcity and an increase in the exchange rate.
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“The new CBN directive will help limit how much foreign exchange banks can hold and for how long. The aim is to discourage hoarding of forex, thereby making it available for intended users at reasonable rates.
“Despite measures adopted by CBN in the past and based on previous experiences with CBN policies directives, many banks are in default of its implementation. This explains why eight banks currently hold a huge NOP of over $6 billion while there is a biting scarcity. This motion will provide the legislative impetus for the required action to compel them to fully comply with the directive.”
Hon. Benson observed that Section 8 (4) and (5) of the CBN Act require that the CBN Governor is expected to brief the relevant Committees of the National Assembly during the semi-annual hearings as well as provide periodic reports on the performance of the economy to the National Assembly.
While frowning upon the non-compliance to the extant law, Hon. Benson lamented that: “there has been a steady rise in the rate of the dollar in comparison to the naira. It rose to N1,520 to the dollar last week.
“The House is also concerned that this astronomical rise has been caused by diverse market forces and certain economic policies adopted by the government, including the liberalization of the dollar.
“The House is further concerned, however, that commercial banks and certain financial institutions in Nigeria usually hold back a large part of forex they obtain either through purchase, borrowing, or allocation from the CBN rather than lending to their customers with a view to selling it when the exchange rate is high.
“The House is worried that this speculative activity by commercial banks and certain financial institutions has further exacerbated the harsh economic situation in the country and led to difficulty by legitimate businesses to obtain forex for their business transactions.
“The House is aware that the CBN has intervened by introducing new monetary policies to check the rise in the rate of the dollar, among which are the Net Open Position Limits and holding excess long foreign exchange.
“The House is also aware that commercial banks and certain financial institutions are reluctant to implement the monetary measures put in place by the apex bank to check these unwholesome practices by banks and other financial institutions in the country.
“The House is concerned that unless drastic legislative measures are taken to enforce the implementation of these directives, the country will continue to experience dire economic hardship as a result of the continuous rise in foreign exchange rates,” he warned.
To this end, the House mandated its Committee on Legislative Compliance to ensure full implementation.
Reps discover 5 banks withholding $5bn in forex
News
Tinubu jets out to France on three-day visit
Tinubu jets out to France on three-day visit
President Bola Tinubu will travel to France today (Wednesday) for a three-day state visit at the instance of the French president.
A statement issued by the President’s Special Adviser on Information and Strategy, Bayo Onanuga, confirmed this.
It said, “The Nigerian leader’s three-day visit, which will focus on strengthening political, economic, and cultural relations and establishing more opportunities for partnership, particularly in agriculture, security, education, health, youth engagement and employment, innovation, and energy transition, promises significant benefits for Nigeria.”
Onanuga said Tinubu and Macron would harmonise positions on stimulating more interest in exchange programmes that focus on skill development for youths and improving their competencies in automation, entrepreneurship, innovation, and leadership.
“Both leaders will participate in political and diplomatic meetings highlighting shared values on finance, solid minerals, trade and investments, and communication,” he added.
“They will also witness a session by the France-Nigeria Business Council, which oversees private sector participation in economic development.”
The presidential adviser stated that the Nigerian first lady and her French counterpart would discuss solutions for empowering women, children, and the most vulnerable through the Renewed Hope initiative.
News
Yahaya Bello reports to EFCC office with lawyers
Yahaya Bello reports to EFCC office with lawyers
A former Governor of Kogi State, Yahaya Bello, on Tuesday visited the Economic and Financial Crimes Commission (EFCC) to honour another invitation extended to him over alleged misappropriation of funds.
Bello went to the anti-graft office with his lawyers in the morning.
The ex-Kogi governor reportedly drove himself to the EFCC’s office in a black Toyota Hilux van with some lawyers.
He was said to have been taken by some operatives of the agency and are currently being grilled.
This is coming after the Supreme Court judgment which dismissed a suit brought by some state governments challenging the constitutionality of the agency.
The EFCC at the last hearing on November 14, sought the adjournment till November 27 in the fresh case it instituted against Bello.
It stated that the 30-day window was still running for the summons earlier issued.
News
Just in: Ebonyi governor suspends two commissioners, Perm Sec for misconduct
Just in: Ebonyi governor suspends two commissioners, Perm Sec for misconduct
Ebonyi State Governor Francis Nwifuru has announced the immediate suspension of two commissioners with a permanent secretary among others for gross misconduct.
Those suspended are the Commissioner for Housing and Urban Development Francis Ori, and the Commissioner for Health, Moses Ekuma, with the Permanent Secretary of the Ministry of Health.
The suspension followed an incident on Saturday night, when the governor reportedly visited the Ministry of Health’s premises and was said to have found six officials diverting government materials.
Others suspended for three months are the Executive Secretaries of the State Primary Healthcare Development Agency and the Ebonyi State Health Insurance Agency
The suspension order was announced by the state Commissioner for Information, Jude Okpor, who cited alleged misconduct and dereliction of duties as the reasons for the disciplinary actions.
Okpor made the disclosure on Tuesday during a press briefing on the outcomes of the State Executive Council meeting held on Monday at the New Government House in Abakaliki, the state capital.
“Following cases of gross misconduct and dereliction of duties by some government officials and matters related thereto, the Chairman of Council directed the indefinite suspension of the Honourable Commissioner for Housing and Urban Development and three months suspension of the Honourable Commissioner for Health, respectively
“In view of the development, the Special Assistant to the Governor on Primary Health was directed to take charge of the ministry in the absence of the suspended commissioner.
Governor Nwifuru directed the suspended government officials to hand over all government properties in their possession including vehicles to the Secretary to the State Government.
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