The Central Bank of Nigeria (CBN) has been implementing a questionable, and a corrupt policy in its allocation and sale of foreign currency to APC affiliates, in a leak to the press. The documents reveal the arbitrary fixing of different exchange rates for transactions.
One of the documents made available to press , the “BANK UTILIZATION REPORT ON 60:40 RULE FOR OCTOBER 2016”, shows stark contrasts in the exchange rates applied in the allocation of forex to different companies and individuals. The document shows no applicable pattern or matrix used in calculating exchange rates or selecting the companies or individuals who got low or high rates.
Details of this report show that during the month of October 2016 some companies were allocated forex at exchange rates as low as N0.61 to $1 in one particular transaction while others received forex at exchange rates as high as N470 to $1. The report also reveals the allocation of forex to individuals and companies for reasons varying from importation of a variety of products to family maintenance allowances, mortgage payments, medical travel and school fees/other bills associated with educational expenditure.
Our source is adamant that many powerful forces within the CBN and Nigerian political circles are taking advantage of CBN’s policies to make huge profits by taking advantage of CBN’s policies to make huge profits by purchasing forex from CBN at low prices then selling at black market rates in the black market.CBN’s policies have currently led to a disparity between the official exchange rate and the parallel market rates of almost N200 per $1 .
In October 2016, CGC Nigeria Limited whose address is listed as Kubwa Road, Abuja received an allocation of $81,392.59 at an exchange rate of N47.50/$1 to import floor drains. In a stark contrast, in one of its several transactions, Lafarge Africa Plc of paid an exchange rate of N428/$1 to get $987,214.18.
On its part, two particular transactions of the Nigerian Breweries Plc stood out. In these two transactions conducted through Rand Bank of South Africa, NB Plc was able to purchase $3193 and $1272 for the purchase of “Raw Materials Hi Cone” at N1.20/$1.
The document also revealed that MACADAMS Baking Systems Limited purchased $57,365.02 for the purchase of baking ingredients at N23/$1. Our investigation into the management structure of the Company revealed that the Chairman of the Board of Directors of MACADAMS Baking Systems Limited is Chief Adegboyega Awomolo (SAN). Chief Awomolo is also currently counsel to Independent National Electoral Commission, INEC.
The disparity in exchange rate also applied to individuals. For instance, Adebolanle Badejo purchased $4,372.05 at N23.34/$1 to service credit card payments. Farida Hassan Gimba received purchased $14,621 at an exchange rate of $48/$1 for educational expenses starkly contrasting with the rate of N370/$1 Fatai Odesile paid for the same purpose.
Abas Alhassan was able to purchase $805.73 at N85.24/$1 to make mortgage payments. In stark contrast, Akintunde Rowland Babatunde purchased $1,972.60 at an exchange rate of N404.84 for the same purposes. In another example, while Jigba Zahradeen Saleh and Nnogo Jane were able to purhcase $ 4,278.65 at N87.52 and $365.68 at N23.04/$1 respectively to pay for educational expenses, Isioma Asiodu Otughwor had to purchase $4,794.41 at N405.22 for the same purpose.
In similar transactions Kennedy Onyeali, Managing Director of All Seasons Mediacom purchased $9,752 at N30/$1 for the importation of an item simply referred to as HF101, while Alhaji Babagana Mohammed Sheriff, who we believe is a nephew to factional chairman of the Peoples’ Democratic Party (PDP) – Senator Ali Modu Sheriff and an in-law of President Muhammadu Buhari, was permitted to purchase $ $35,338.69 at the rate of N101.5/$1 for the importation of an item listed as “invisible”.
Foreigners were also able to benefit from the purchase of forex at low exchange rates. A person simply named as Paula was able to purchase $834.15 at N23.35/$1, while Paula Coetzee was able to purchase $1,563.06 at N23.11/$1. Both transactions were conducted through Stanbic IBTC Bank Plc and were for family maintenance allowances for expatriates.
Similarly, William Le Roux and Debra Ann Le Roux were permitted to purchase $13,093.29 and $9,378.37 at N22.63 and N23.11 respectively. Both transactions were conducted through Stanbic IBTC Bank Plc and were for family maintenance allowances for expatriates.
In stark contrast to all this, World Wide Commercial Venture Limited was permitted to purchase $1, 462,480.83 at the rate of N425/$1 to purchase life-saving drugs and pharmaceutical products. Its 24 transactions in October 2016 were conducted through Zenith Bank.
The lack of a pattern or formula used to calculate the exchange rate used for allocations lends credence to allegations of racketeering and dubious allocations of Forex to close family and friends on the part of CBN officials.
CBN has recently come under flak from many quarters for its foreign exchange policies. Last August, former CBN governor and the Emir of Kano, HRM Sanusi Lamido Sanusi, condemned sharp practices in the allocation and forex which he said was capable of distorting the market and damaging the economy. He was particularly critical of CBN’s policies which he said were creating emergency billionaires.
On January 13th, 2016 a civil society group carried out a peaceful procession to the CBN headquarters in Abuja to protest the negative effects of its foreign exchange policies, the rising price of essential goods and services owing to exchange rates and alleged corruption in the implementation of the apex bank’s policies.
One of the organizers of the protest, Mr. Deji Adeyanju, alleged currency speculation amongst the top echelon of the apex bank. Mr. Adeyanju alleged that many senior officials use various fronts to apply for and obtain forex which they then sell on the black market at higher rates.
A few days ago, while speaking to journalists at the 2017 World Economic Forum in Davos, Switzerland Vice President Yemi Osinbajo alluded to the negative consequences of the disparity between the official exchange rate and the parallel market rate.