Commercial banks in the country are raking in millions of dollars from a foreign exchange racketeering which has been fuelled by the acute shortage of hard currency in the economy, investigation by the Saturday PUNCH has revealed.
The Central Bank of Nigeria has been rationing forex to prospective importers in the past 16 months, after the global fall in the prices of crude oil, the nation's main forex earner.
The situation has exacerbated over time and tens of thousands of applications for forex by intending importers have been kept on hold by the CBN for months.
Sources close to the forex racketeering said the dollar shortage had led to a situation where prospective importers apply to the CBN through their banks for forex for months without getting it.
The continued acute scarcity, it was learnt, had been capitalised upon by the commercial banks who are now selling several millions of dollars obtained from the CBN on their clients' names at huge premiums above the N199 to $1 official rate approved by the central bank.
According to sources familiar with the situation, thousands of helpless importers who are in desperate need of forex to import products ranging from raw materials to equipment are milked on weekly basis by the greedy banks.
Findings by our correspondent showed that the scheme, which has been on for several months as the forex scarcity worsens by the day, has made many top bank executives multi-millionaires overnight.
Out of about $10m to $25m (depending on the volume of demand by its customers) sold by the CBN to commercial banks in some weeks, illegal profit to the tune of $5m could be made by each of the banks involved in the forex racketeering.
A prospective importer, who was recently approached by a major bank in the country involved in the forex racketeering, told our correspondent that many importers had no choice but to buy the scarce forex from the banks despite the huge and illegal premiums being made by them.
Narrating his ordeal to Saturday PUNCH, the importer, who spoke on the condition of anonymity, for fear of being victimised by the bank, said, "We need $295,000 to import some equipment. We have been on the so-called CBN queue since October. The bank said no forex. Recently, the bank called us that there was forex but not at the official rate. They wanted to sell to us at N275 to $1. Out of about N81m we are to pay, only about N59m goes to the CBN, which is the official rate. The balance goes to the bank officials who get this allocation from the CBN. This is the type of stupid money they make now, God saves Nigeria."
Explaining further, the visibly angry importer said, "The bank's officials said they had $5m as of January 29. So calculate how much they made for that week alone."
The forex racketeering victim said the bank officials had told him that the difference between the CBN rate of N199/$1 and the N275 to the dollar rate they were offering him would be paid through a cheque written on a name to be provided by the officials.
He added, "The bank will debit my account at the CBN rate and then I will give them a cheque for the balance."
Another importer, who shared a similar experience, told Saturday PUNCH that his own bank offered a deal of N285 per dollar.
Further findings by our correspondent revealed that commercial banks were carrying out the forex racketeering through various means depending on the method through which a prospective importer is planning to make payment to its prospective supplier overseas.
Normally, payments are made for imported goods through open accounts, Letters of Credit, and Bills for Collection.
For items that are not valid for forex (i.e items the CBN has excluded from the list of items it provides forex for), payments are usually made through open accounts.
Letters of Credit (a kind of guarantee for payment) are usually written by Nigerian banks to their correspondent banks overseas on behalf of an importer, while Bills for Collection involve a situation where the supplier releases the goods to the importer and payments are made later. In any of the latter two cases, importers or companies are required to get forex from the CBN which will be transferred into the bank accounts of their suppliers overseas by their commercial banks in Nigeria.
It was learnt that a whole lot of forex racketeering involving opening bank accounts overseas by bank officials and importers alike was now in place.
When contacted, the CBN Director of Corporate Communications, Mr. Ibrahim Mu'azu, said there was the need for aggrieved customers and importers to lodge a formal complaints with the CBN over the matter, adding that this would enable the central bank to commence thorough investigation into the matter.
"The regulatory authority can only know when there are complaints. If there are complaints, the CBN will investigate and rescue the situation," Mu'azu said.
But economic, financial experts and ex-bankers said the CBN and commercial banks were culpable, noting there was the need for the duo to introduce mechanism to arrest the huge fraud.
An economist and Chief Executive Officer, Cowry Assets Management Limited, Mr. Johnson Chukwu, said the CBN could be held responsible for the sharp practices.
Chukwu, who is a former banker, said, "Human beings are economic agents and they will always be tempted to follow the easy path. But the regulatory authority must not create the loophole for such. The premium between the official exchange rate and the parallel market rate is too much."
An Economist and Head, Investment and Research, Afrinvest West Africa Limited, an investment bank and research firm, Mr. Ayodeji Ebo, also said there was the need for the CBN to come up with a policy to close the huge gap between the naira-dollar exchange rate on the parallel and official forex markets, adding that the difference would continue to breed round-tripping and all manner of unethical practices.
He added, "Commercial banks also need to strengthen their internal controls both at the head office level and branch levels. Most of these forex racketeerings are carried out only in some bank branches without the knowledge of the head office or even top officials at the branch level. So, the banks need to do something quickly about this."
The Head, Investment Advisory, Sterling Capital, an investment bank, Mr. Sewa Wusu, believes the CBN is making efforts to stabilise the forex market, noting that issues coming in recent times would be addressed soon.
Meanwhile, the CBN has asked banks to start publishing their returns on the utilisation of the forex in the newspapers.
This, it was learnt, was part of the measures by the CBN to check sharp practices in the forex market.
For the first two weeks of February, Stanbic IBTC Limited with a total of $23,615,680.90 reportedly emerged the highest amount of forex purchased from the CBN on behalf of its customers.
From the publications, Stanbic IBTC was followed by First Bank of Nigeria Limited and Guaranty Trust Bank Plc, with $19,774,888.26 and $19,709,354.41, respectively.
Also, Zenith Bank Plc with total returns of $18,707,309.97 came fourth, while Diamond Bank reported returns of $17,515,474.
Access Bank reported returns of $16,982,208.04 to occupy the sixth place, while the United Bank for Africa Plc reported returns of $12,045,150.76.
By Thursday, only seven banks had published their returns on utilisation of funds purchased from the CBN, with others expected to do so today.
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