By Elizabeth Chukwuma and Lateef Adegbite
Ali Ndume, Senate Chief Whip, and other northern political gladiators who are opposed to the relocation of some operations of the Central Bank of Nigeria, CBN, under the close watch of Olayemi Michael Cardoso, may have to do a rethink.
The Senate Chief Whip had said that that Cardoso, the CBN, governor and his management team decision to relocate some of the apex bank operations to Lagos, the nation’s commercial nerve center was influenced by ‘’political cartels’’ within the Bola Ahmed Tinubu’s government who are misleading him on implementing bad policies that would further counter-develop the northern part of the country.
The Borno state born politician may have won the heart of other Senators from the region, who in the guise of the Northern Senators Forum, NSF, were said to have threatened to drag the CBN and the government to Court of the relocation of some apex bank offices to Lagos were not reversed.
Mohammed .A. Yakasai, a retired Director, in CBN, had said that there was no basis for northern political gladiator’s opposition to the relocation of some operations of the bank to Lagos. The former CBN, retired Director was said to have told those that cares to listen that the planned relocation of some units of the apex bank was not the initiative of the current governor of the CBN.
The former apex Bank Director had said that the plan had been on drawing board since the era of Sanusi Lamido Sanusi, the deposed Emir of Kano, as the governor of the bank. According to him, it was the blueprint of the then Sanusi’s regime because they believe that the Federal Capital Territory, FCT, of the bank , cannot accommodate everything.
The former CBN governor may have prepared the ground to relocate the departments that are supervisory in nature to Lagos for effectiveness and to minimize cost of operations. It was not surprising why the Sanusi’s Administration in the bank demolished the ban old head office in Lagos and built a modern a befitting modern office building to accommodate all the departments that would be relocated to the country’s Finance and Commercial Headquarters.
Chukwuma Soludo,a Professor of Economics , an erstwhile governor of the apex bank and now governor of the south eastern state of Anambara and Godwin Emefiele , immediate past governor of the bank could keep to the vision of relocating the approved departments slated to move to Lagos because of the rigours of Lagos . He had alluded to the fact that what the Nigerian apex bank has done was not different from what obtains in other parts of the global economy.
He had cited the North American country of the United States, US, where Washington DC. Is the political Capital of the country whle New York is the Commercial and Financial capital, Asian countries of China, where Beinjing is the country’s capital while shanghai is the commercial and Finance capital.
The situation is not different from Canada, a neighbouring country of the US, where Ottawa is the capital and Toronto is the business and financial capital of the country or the South Africa, in the African Continent where and Financial capital. Pretoria is the capital and Johannesburg is the country’s commercial. There is no gain saying the act that all the nation’s 23 major Financial institutions like Access Bank forly Skye Bank,Bank, Citibank, Ecobank Nigeria plc, FCMB, Fidelity, First Bank plc, Globus Bank Limited, GTB, Heritage Banking Company Ltd, Key Stone Bank , Polaris formerly Skye Bank, Providus Bank, Stanbic IBTC Bank Ltd, Standard Chartered Bank of Nigeria Ltd and Sterling Bank plc, have their Head offices in the sprawling city of Lagos, as obtained in other world world major Commercial centres.
Others like Sun Trust Bank Nigeria Limited, Tita Trust Bank, Union Bank of Nigeria plc, UBA plc, Wema Bank and Zenith including Unity Bank plc, also have their Head offices in the south west state city of Lagos, where there there are two major seaports, Lagos ports of Apapa and Tincan Island and an international airport including a major international border route , at Seme, a border community between Nigerian and the neighbouring Benin Republic, described as the busiest in the African Continent.
This may have informed why Yakasai, the former CBN, Director, who could not hide his feelings would want the likes of Senator Ndume, a ranking Senator of Federal Republic of Nigeria, who would want northers to believe that he is fighting for their interest not to ethnicise a pex bank’s Management decision to relocate the banking supervision and other Financial Institutions Supervisions operations, Consumer Protection Department , Payment System Management Department and Financial Policy Regulations Department but to support it.
Many see the relocation of the penciled down departments of the apex Bank as the beginning of restoration of discipline in the system. This is evident with the recent directive of the CBN Authorities to the Money Deposit Banks, MDB, to sell their excess US dollar stock put at about $5 billion. The apex Bank was said to have given the Banks a deadline of Thursday April 1, 2024, to the Deposit Money Banks, DMBs to comply with the directive which was said to have been geared to stabilize the country’s volatile foreign exchange rate. The apex Bank Leadership were said to have warned the DMBS against hoarding the excess foreign currencies for profit.
Going by officials report of the CBN, some Commercial banks , were instrumental to the continued slump of the naira against the US dollar and other major foreign currencies including the British pound sterling ‘’hold long-term foreign exchange positions to enable them profit from the volatile movements of the country’s foreign rates at both the Autonomous and the Parallel, popular, Black market foreign exchange rate market markets.
The apex Bank could enforce the newly introduced set of guidelines aimed at reducing the risks associated with these practices that had been the norm over the years in the Banks because the relevant Departments that could do are now on ground in Lagos, the nation’s Commercial and Finance Capital.
The MDBs were said to be making huge profits from the country’s volatile movement in foreign exchange sales over the years may have haven known that that the game is up and to avoid losing their operating License over the unwholesome practice in the sale of Forex when the Senate’s Committee on Banking , Insurance and other Financial Institutions invited Cardoso, CBN, governor to appear before it over the sharp decline of the Local currency in the country’s foreign exchange market on Tuesday, January, 30, 2024.
With the CBN, official window of selling forex reporting that the naira had slumped to an all-time low as it has hit N1,520 to the US dollar on Wednesday , January 31, 2024, may have given Cardoso and his Management team room to quickly find answers and solutions to stabilize the naira and restore confidence in the nation’s economy to avid playing into the hands of the Senate and Hajia Hadiza Bala Usman, a former Managing Director of Nigerian Ports Authority, NPA, during Buhari’s Administration, and now pecial Adviser to President Tinubu on Policy and Coordination , who has the mandate to assess and evaluate the performance of the Political appointees serving in the MDAs including the ministers.
It was not surprising why the Apex bank had ordered the Deposit Money Banks, DMB, to sell their excess dollar stock put at about $5 billion latest on Thursdy, February 1, 2024. The CBN Authorities may have taken the bold initiative as part of moves to stabilize the nation’s forex market. The Banks regulatory Authority was said to have warned the operators against ‘’hoarding excess foreign exchange currencies for profit’’.
The DMBs, may have known that the game is up when each got a copy of the CBN circular titled, ‘’ Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks and further warning the banks against ‘’reporting false exchange rates. The CBN circular, which was said to have been signed by Hassan Mahmud, Director of Trade and Exchange and Rita Sike, Representative of the Bankerss’ Bank Director , Banking Supervision , had noted with concern ‘’the growth in foreign currency exposures of the Banks through their Net Open Position , NOP, .
The CBN , top officials who may have spoken the mind of the Cardoso, the governor, noted that NOP, has created an incentive for the Commercial Banks ‘’to hold excess long foreign exchange positions , which exports the Banks to foreign fraudulent practices and risks.
The apex Bank was said to have also issued prudential requirements that must follow religiously without cutting corners. A top of the CBN, disclosed that a key focus of these prudential requirements is the management of the NOP which measures the difference between the Bank’s foreign currency assets and whAt it owes companies and individuals in foreign exchange currencies.
Cardoso and his Mnagement Team may have dampened the enthusiasm of the Commercial Banks, which are dealers of the country’s forex when it directed that ‘’the NOP must not exceed 20% short or 0% long of the Bank’s shareholders’ funds. The apex Bank was said to have made t categorically clear to the Banks that the calculation must be done using ‘’Gross Aggregate Method ‘’, which Financial analyst had said provides a comprehensive view of the Bank’s foreign currency exposure.
The apex Bank Leadership may have dampened the enthusiasm of the Banks which are always making huge profits from forex sales when the Institutions with current NOPs exceeding the Limits that ha been set by it are required ‘’to adjust their positions to comply with the new regulation by Thursday, February 1, 2024.
It further stated that Banks must calculate their daily and monthly NOP and foreign Currency Trading Position using the template provided by the CBN. This may have informed why there were huge forex transactions which had been experiencing a free fall since May 29, 2023, when Bola Ahmed Tinubu announced the unification of the the official and parallel foreign exchange market rates that the hit the all –time low of N1,520.00 to the US, dollar.
In a related development, Patience Oniha, Director General, Debt Management Ofice, DMO, had said that the Nigerian government will soon get a breather from the foreign and local debt quagmire put at about $114.350 billion . This because Tinubu’s Administration, according to the DMO, Chief Executive Officer, CEO,has made total repayment of $3.070 billion in debts owed to the Asian country of China, t World Bank and other othermulti-lateral Financial Institutions, particular, the Paris Club and London Club.
In sustaining the repayment of the country’ foreign debts and funding the official foreign exchange window, President Tinubu, who believes that the Nigerian National Petroleum Corporation , NNPC, now baptized as Nigerian National Petroleum Company Limited, NNPCL, with the passage of the Petroleum Industry Bill, PIB, by the National Assembly which was signed into Law by former President Buhari in August 2020, may he has mandated the CBN to take over responsibility of Crude Oil Sales from NNPCL.
The oil octopus, which over the years has maintained sole control over the country’s crude oil sales and forex only rendered accounts to the Federal government. Under the new platform, which had been described by former Vice Atitku Abubakar, during Olusegun Obasanjo, as ‘’illegal’’. Under the new arrangement which had made it clear that NNPCL, must provide all receipts of payments of crude oil sales to the apex Bank ‘’for proper vetting and documentation’’ . The new policy arrangement, according to an insider was said ‘’to have effectively blocked the gap in the country‘s crude oil sales and undeclared receipts as CBN.
.This may have informed why Cardoso, the CBN, governor could beat his chest that ‘’the coordinated effort will greatly enhance the Commercial Banks foreign exchange flows and further boost the country’s freign exchange reserves’’. This is evident with the recent release of $500 million to various sectors of the economy by the CBN to address the backlog of verified forex transactions.`
The apex Bank was said to have also released $64.44 million to settle all the verified debts accumulated by the Buhari’s Administration in the nation’s aviation sector, which an insider had brought the total clearance of all verified foreign airlines claims to $136.3 million,
Unconfirmed report had said that about $700 million of the Foreign airlines claims remains blocked with he the DMBs, awaiting to be clered.
