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Reps discover 5 banks withholding $5bn in forex

Published

1 year ago

February 7, 2024

Trends Admin

House of Representatives

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

JUST IN: Release files on Tinubu, US judge orders FBI, DEA

Published

2 hours ago

April 13, 2025

Trends Admin

President Bola Ahmed Tinubu

JUST IN: Release files on Tinubu, US judge orders FBI, DEA

A United States District Court in Washington, D.C., has directed the Federal Bureau of Investigation (FBI) and the Drug Enforcement Administration (DEA) to make public records concerning President Bola Tinubu.

Judge Beryl Howell issued the order on Tuesday in response to a motion filed by Aaron Greenspan, an American citizen seeking a review of a previous ruling.

In her decision, Howell dismissed the agencies’ justification for withholding the information, stating that shielding such documents from the public “is neither logical nor plausible.”

Greenspan alleged that the agencies violated the Freedom of Information Act (FOIA) by failing to produce documents regarding alleged federal probes into both President Tinubu and Abiodun Agbele within the legally mandated timeframe.

In 1993, Tinubu forfeited $460,000 to the U.S. government after officials linked the funds to proceeds from narcotics-related activities.

The issue resurfaced during proceedings at Nigeria’s Presidential Election Petition Court, where opposition candidates Atiku Abubakar and Peter Obi cited the forfeiture in challenging Tinubu’s eligibility for office. The court ultimately dismissed the petitions and upheld his election.

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Judge Howell’s latest ruling partially supports Greenspan’s claims, particularly concerning the agencies’ reliance on what’s known as a “Glomar response”—a refusal to confirm or deny the existence of records.

According to the judge, the FBI and DEA failed to demonstrate that their use of the Glomar principle was appropriate in this case.

She wrote, “the claim that the Glomar responses were necessary to protect this information from public disclosure is at this point neither logical nor plausible,” noting that Tinubu had already been publicly identified as a subject in investigations by both agencies.

Further explaining the legal framework, Howell stated that a FOIA requester can challenge a Glomar response either by disputing the claim that disclosure would cause identifiable harm, or by proving that the agency has already officially acknowledged the information in question.

In this instance, Greenspan made both arguments. He contended that: “The plaintiffs’ argument that (1) DEA has officially confirmed investigations of Agbele’s involvement in the drug trafficking ring, (2) the FBI and DEA have both officially confirmed investigations of Tinubu relating to the drug trafficking ring, (3) any privacy interests implicated by the FOIA requests to the FBI and DEA for records about Tinubu are overcome by the public interest in release of such information, and (4) the CIA has officially acknowledged records responsive to plaintiff’s FOIA request about Tinubu.”

JUST IN: Release files on Tinubu, US judge orders FBI, DEA

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US envoy meets Tinubu in Paris over economic war

Published

2 days ago

April 11, 2025

Trends Admin

U.S. envoy meets Tinubu in Paris

US envoy meets Tinubu in Paris over economic war

The United States has opened discussions with President Bola Tinubu on expanding economic cooperation across Africa as part of efforts to deepen trade, investment, and development ties on the continent.

This was disclosed following a meeting on Thursday between President Tinubu and U.S. State Department Senior Advisor for Africa, Massad Boulos, in Paris, where the Nigerian leader is currently on a short working visit.

According to a statement posted Friday on the official X (formerly Twitter) handle of the U.S. Mission in Nigeria, and shared by President Tinubu’s Special Adviser on Information and Strategy, Bayo Onanuga, the talks also touched on key security concerns in the region.

“State Department Senior Advisor for Africa Massad Boulos met with President Tinubu on Thursday to discuss regional security, including working together with partners to build a durable peace in eastern DRC,” the U.S. Mission stated.

“They also discussed expanding opportunities for economic cooperation throughout Africa,” it added.

The meeting comes at a time when Nigeria is working to reposition itself as a hub for investment and economic growth on the continent.

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President Tinubu has consistently called for stronger global partnerships to drive industrialization, job creation, and infrastructure development in Africa.

Though specific details of the economic discussions were not disclosed, analysts say the meeting reflects growing American interest in engaging with African leaders on development-focused diplomacy, with Nigeria seen as a critical anchor in West Africa.

President Tinubu has been in Paris since Wednesday, April 2, undertaking a short working visit aimed at reviewing his administration’s midterm performance and setting strategic priorities for the next phase of his tenure.

While abroad, the President has remained actively engaged in state matters, and Thursday’s high-level engagement with the U.S. State Department underscores Nigeria’s central role in regional affairs and global economic conversations.

Tinubu is expected to return to the country shortly, with public attention focused on the outcome of his consultations and the anticipated direction of new policies in the coming months.

News

US honours Soyinka, Okundaye at African Cultural Festival 2025 Pennsylvania

Published

4 days ago

April 9, 2025

Trends Admin

US honours Soyinka, Okundaye at African Cultural Festival 2025 Pennsylvania

The United States government through the Pennsylvania House of Representatives and the Pennsylvania Senate has honoured the Nobel Laureate Wole Soyinka and the renowned African art icon, Chief Nike Okundaye of Nike Art Gallery, Lagos for their contributions to art in Nigeria and globally.

While Soyinka was conferred with “Distinguished Honors” for his extraordinary contributions to literature, culture, human rights, and global discourse, Nike Okundaye was honored for her revolutionary impact on contemporary African art.

She was recognized for being the pioneer of the Adire resist-dyeing technique, which has seamlessly blended ancestral motifs with modern aesthetics, earning global acclaim, thereby solidifying her legacy as a custodian of African heritage.

The honor was bestowed on them on March 26 at the unveiling of African Cultural Festival 2025 held at the Pennsylvania State Capitol . The festival will take place from September 19 to 20, 2025, in Pennsylvania.

The Senate of Pennsylvania lauded Professor Soyinka for his pioneering role in modern African literature and his relentless advocacy for free speech, social justice, and democracy.

The Pennsylvania House of Representatives, led by Speaker Joanna E. McClinton, also commended him for his unparalleled literary achievements and for inspiring critical thoughts across generations.’

For Okundaye, she was honoured for giving hope to marginalised women, training and equipping over 5,000 women with Adire-making, weaving, and traditional craft skills.

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“Her mission to foster economic independence and cultural continuity has empowered communities across Nigeria and beyond, ensuring that African artistry thrives in future generations,” the House and the Senate stated.

Speaking about the upcoming festival, Wole Adeniyi, the Chief Executive Officer, CEO of ACI234, said the festival was designed to celebrate African heritage, foster international collaboration, and stimulate trade and cultural exchange between Africa, the United States, and the world.

Adeniyi emphasised that the festival will solidify Africa’s cultural influence while creating pathways for sustainable growth and artistic innovation.

He thanked the Pennsylvania House of Representatives, the Senate, and the State of Pennsylvania for honouring the two Nigerian icons of art.

Part of activities lined up for the festival includes the launching of Duduplugs, an innovative digital platform by ACI234 Entertainment LLC, designed to connect creative industries across continents, and elevate Africa’s creative economy.

Commenting on the upcoming event, Festival Director Foluke Michael described the African Cultural Festival as a celebration of tradition and innovation — a vibrant fusion of Africa’s timeless heritage with contemporary expression.

She acknowledged the pivotal role of the Lagos State Government in laying the foundation for this global movement through the Lagos Black Heritage Festival, which was steered by Professor Wole Soyinka during his tenure as Festival Consultant.

“That era gave birth to a cultural renaissance,” Michael noted. “It was during that time that the iconic Rhumble in Lagos — featuring President Bola Ahmed Tinubu and boxing legend Evander Holyfield — became a symbolic moment that planted the seed for what we now know as the African Cultural Festival.”

She further revealed that the official countdown to the 2025 edition will begin in Lagos at the end of April, setting the stage for a global celebration of African excellence.