Cleaning The Rot At The CBN

BY MICHAEL AKINOLA

The rot at the Central Bank of Nigeria (CBN) ran deep. Deeper than anyone could imagine. It was a cesspool of corruption based on the findings by the Special Investigator of the Central Bank of Nigeria (CBN) and other related entities. Also, the CBN Governor, Dr. Yemi Cardoso and his team of Deputy CBN Governors have uncovered mind-blowing infractions at the CBN since they assumed office in October 2023.

Some staff found to have engaged in fraud are already returning stolen funds. Already, $1 million has been recovered and counting.

It will be recalled that President Bola Tinubu had appointed Mr. Jim Obazee, the former Chief Executive Officer of the Financial Reporting Council of Nigeria (FRC), on July 28, 2023 to investigate activities of the CBN during Mr. Godwin Emefiele tenure under President Mohammadu Buhari’s government. The committee on April 5th submitted its final report to the president.

Prior to submitting the report to the President, the investor had released some preliminary findings that shook the nation.

According to their findings under Mr. Godwin Emefiele’s leadership, the CBN Governor, consented to the “unlawful removal” of about $6.23 million from the vault of the CBN’s Abuja office. It was from this that the current leadership has recovered $1 million.

The panel said under Emefiele, there were indiscriminate and “fraudulent” use of ways and means advances (printing of naira notes) to the federal government by the CBN amounting to over N22,7trn. Most of the monies couldn’t be traced.

There are several other findings of alleged corruption that happened in the apex bank before Cardoso came on board.

The reformed-minded CBN Governor is working alongside a dedicated team of experienced professionals in the Committee of Governors. They include: Bala Bello, MON, the workaholic Deputy Governor, Corporate Services Directorate, Muhammad Sani Abdullahi, Deputy Governor, Economic Policy Directorate, Philip Ikeazor, Deputy Governor of, Financial System Stability Directorate, and Emem Usoro, the Deputy Governor, Operations Directorate.

The team would go into deep study of the financials of the CBN, the activities of the CBN as it applied to its core mandates especially bordering on being an advisor to the government, reviewing monetary policy tools, fighting inflation, managing the value of the naira and more.

Experts had even before their appointment expressed deep concerns over the veering off by the CBN from its core mandate into development finance. It sank over N10 trillion. Briefing the media after the February 2024 Monetary Policy Committee Meeting (MPC), the CBN Governor said the apex bank in about six years expended over N10 trillion in interventions to different sectors of the economy without significant results. He said the huge financial injection into the economy by the CBN rather exacerbated inflation and caused price distortions.

He also said some of the funds didn’t get to the intended beneficiaries adding that the CBN will discontinue the interventions.

At the Chartered Institute of Bankers of Nigeria (CIBN) 58th Annual Bankers’ Dinner and Grand Finale of the Institute’s 60th Anniversary November 24, 2023, Dr. Cardoso told the audience that the CBN will return to its core statutory mandate; which is to ensure price stability, in addition to issuing legal tender, safeguarding external reserves, promoting a sound financial system, and providing economic and financial advice to the government.

The CBN governor and his team began interrogating processes, reviewing policies, staff audits for efficiency, proper placements of staff for optimum efficiency, and dealing with endemic systemic corruption that would thwart impending reforms at the apex bank.

The CBN Governor believes that “through targeted policies, transparent market operations, and coordination between monetary and fiscal authorities” the apex bank “can ensure a more stable exchange rate, control inflation, and create an enabling environment for businesses and individuals to thrive.”

“I am aware that events over the past few years have also put the CBN in a bad light. These issues can be attributed to various factors, such as corporate governance failures, diminished institutional autonomy of the Central Bank of Nigeria, a deviation from the core mandate of the Bank, unorthodox use of monetary tools, an inefficient and opaque foreign exchange market that hindered clear access, a foray into fiscal activities under the cover of development finance activities. There was also a lack of clarity in the relationship between fiscal and monetary policies, among other challenges” Dr. Cardoso said at the bankers’ dinner.

The CBN is already being cleansed and repositioned through deep reforms.

Some of the reforms that have happened include; discontinuation of intervention funds which the CBN hitherto expended over N10trn without measurable outcomes, liberalism of the Forex market, lifting of forex restrictions on 43 items, and recapitalisation of the banking sector.

Other policies include; reforming the Bureau De Change operations which had become a conduit. They had also been fingered in terrorism financing and money laundering. They were used as a veritable platform for arbitrage perpetrated by bank staff and even some CBN staff. The reform in the segment saw a cleaning up of the BDC with 4,173 licenses revoked. The naira has reacted positively as it has begun to recover. From about N1,800/$, it is now slightly above N1,100/$1.

Cardoso and his team would continue with the reforms by transferring some core staff of the apex bank to drive the announced recapitalisation and effective banking supervision to Lagos. On the 26th March 2024, indeed the CBN announced a new minimum capital base for banks.

The new minimum capital requirement for commercial banks with international authentication was raised to N500bn, national authorisation is now N200bn, and regional authorisation is N50 billion.

With the new policy, the CBN is hoping to attract new capital into the country, make the banks stronger to add value to the economy and help drive the President’s ambitious goal of achieving a Gross Domestic Product (GDP) of $1.0 trillion over the next seven years.

In addition, the CBN management began cleansing within workers as well. Some staff who have been found to have engaged in corruption are being disengaged.

Some have been alleged to be resisting the recent reforms thus the management have shown the gates to some of them.

“We will tackle institutional deficiencies, restore corporate governance, strengthen regulations, and implement prudent policies. We assure investors and the business community that the economy will experience significant stability in the short-to-medium term as we recalibrate our policy toolkits and implement far-reaching measures” Cardoso assured.

A top management staff of the CBN who pleaded anonymity said it’s “time to get all the bad eggs and accomplices out of the CBN for recent policies to succeed.”

“We can’t make significant progress without weeding out the bad eggs. There was so much looting in the bank. Some staff have become so vested they won’t want our reforms to work” he said.

“We are only retooling our internal corporate governance processes so the CBN could work better,” he said adding that the “CBN needs to breathe” he stated.

Recently the Former SGF Boss confirmed in court that “neither Buhari nor FEC approved any payment to foreign election observers.

Another source at the apex bank who pleaded anonymity said “Those who aided and abetted the malfeasance and stealing of our collective patrimony at the CBN must not only be punished but prosecuted and jailed “

“One of the charges against Emefiele is the withdrawal of $6.2 million in cash shortly before the 2023 elections by forging Buhari’s signature, the staff involved in abetting this heist have already confessed and returned about $1 million to the CBN” he stated.

Continuing he said “This may not be the only one. All those staff that aided and abetted Mr. Emefiele, who is currently standing trial, in all these alleged stealing must not only be dismissed but also be prosecuted. Indeed, CBN was a cesspool of corruption under the last administration as mentioned by President Tinubu in his Independence Day speech.”

He indicated that there was recruitment fraud, promotion fraud, medical fraud, and massive kickbacks collected from Anchor Borrowers and other intervention schemes.

According to him, “Cardoso and his team must restore the lost glory of the CBN that until recently was suffering from trust deficit.”

Experts have called on President Bola Ahmed Tinubu to support the CBN reforms and not yield to the blackmail Cardoso is currently experiencing.

They acknowledged that although the reforms are not popular, they have to be supported to succeed and instill discipline into the CBN.