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Nigeria Spends $66bn Spent On Bureau de Change in 11 Years

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Emefiele

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has disclosed that the central bank frittered away a whopping $66 billion over an 11-year period funding Bureau de Change (BDC) operators, blaming this as one of the several policies that led to the erosion of Nigeria’s foreign reserves and is partly to blame for the economic crisis in the country today.

Speaking to journalists at the weekend, Emefiele recalled that in September 2008, Nigeria’s foreign reserves stood at $62 billion when crude prices peaked at $147 per barrel, noting however that rather than save the money or invest it in infrastructure and industry for wealth creation, previous governments embarked on frivolous spending, disclosing that in 11 years, Nigeria spent $66 billion funding BDC operators.

He said: “In September 2008, Nigeria’s foreign reserves stood at $62 billion. But what did we do with $62 billion at a time crude price was in excess of $120 per barrel?

“What we could have done was to save the money, if we couldn’t save the money, invest it in infrastructure and industry that will create productivity and wealth for our people.

“Instead, the central bank at that time went about licensing Class A, Class B and Class C bureau de change operators. For Class A BDCs, the central bank was allocating $1 million per week, for Class B, the CBN was allocating $750,000 per week and for class C BDCs, the central bank was allocating $500,000 per week. The CBN was among one of the few central banks in the world allocating dollar cash for BDC operations.”

He revealed that between 2005 and January 2016 when it was stopped, the CBN had disbursed $66 billion to fund the cash operations of BDCs in Nigeria.

“What that meant was that in 11 years, we spent $66 billion funding the operations of BDCs which came to an average of $6 billion a year. If we had thought of other ways to utilise our reserve, especially in 2008 when our reserves were as high as $62 billion, certainly we will not be where we are today,” said the visibly agitated Emefiele.

The CBN boss, who recalled his worst experience as the chief executive of Zenith Bank Plc and how he was punished for not participating in funding of BDC operations, said: “We had a situation where at that time, as the MD of Zenith Bank, there was a deputy governor of the central bank that would call to query me as to why I was not coming to the central bank to collect dollar cash to sell to BDCs.

“I was informed that some people in Port Harcourt, Lagos and Kano were calling to complain that Zenith Bank was not selling dollar cash to BDCs, but of course the bank did not see any serious need to sell dollar cash for BDC operations at that time. So that was what we did with part of the $62 billion foreign reserves.

“Between 2009 and 2014, you remember in 2009 when we had the crisis, when it started with the Lehman Brothers collapse, America pumped a lot of money to stimulate its economy and as a result of that, money flowed into emerging markets including Nigeria.

“At that time again, Nigeria removed all forms of captive controls to encourage the flow of capital into Nigeria. So what happened during that time was that for five straight years, we saw crude prices at above $105 per barrel on the average for five straight years.

“In that period, we also saw flow of capital into emerging markets including Nigeria. So we should have at that time built our reserves but we did not, and these were some of the actions they took at the central bank that got us where we are today.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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President Buhari Accuses Governors of Stealing LG Funds

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Muhammadu Buhari

Nigerian President, Muhammadu Buhari has once again accused state governors of stealing monthly allocation due to local government under them.

The president spoke at a parley with members of the Senior Executive Course of the National Institute for Policy and Strategic Studies, Kuru, held at the State House Banquet Hall, Abuja.

Speaking at the event, the president stated that it beats anyone’s imagination how some governors collected money on behalf of council areas in their states, only to remit just half of such allocation to the council chairmen, who would further deplete the remittance by filching it. Investors King learnt. 

 ‘‘I found it necessary to digress after reading my speech and this digression is a result of my personal experience. What they did, this is my personal experience, if the money from the Federation Account to the state is about N100m, N50m will be sent to the chairman, but he will sign that he received N100m. The governor will pocket the balance and share it with whoever he wants to share it with,” the president narrated. 

‘‘This is what’s happening. This is Nigeria. It’s a terrible thing; you cannot say the person who was doing this is not educated. He was a qualified lawyer, he was experienced, yet he participated in this type of corruption.” he queried. 

Furthermore, the president clarified that state governors and local government chairmen should be held responsible for the underdevelopment in the rural areas noting that most of the local governments lack basic amenities. 

Similarly, the National Union of Local Government Employees on Thursday backed the position of the president on the embezzlement and mismanagement of local government funds.

Responding to Buhari’s position, the  President of the Nigeria Union of Local Government Employees (NULGE), Hakeem Ambali, said Buhari was merely stating the obvious.

The NULGE President nevertheless admonished the president to go beyond the statement and ensure governors, especially those in APC to sign the local government autonomy bill into law.  

“He should go beyond that statement. He is the leader of the party, he should ask them to sign the autonomy into law; he is the leader of the governors,’’ he said.

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Ramaphosa Braces for Calls to Resign Over $580,000 Theft at Farm

The panel found the president may have violated sections of the constitution following a theft of $580,000 that was stashed in a sofa at a game farm he owns.

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Cyril Ramaphosa

South African President Cyril Ramaphosa’s allies are steeling themselves before a meeting of the governing party’s top leaders at which he’s likely to face calls for his resignation.

The African National Congress’s National Executive Committee will on Thursday discuss the findings by an advisory panel that there may be a case for Ramaphosa’s impeachment. The panel found the president may have violated sections of the constitution following a theft of $580,000 that was stashed in a sofa at a game farm he owns.

The release of the panel’s report on Wednesday night triggered a slump in the rand. The NEC meeting is scheduled to start at 7 p.m.

Party officials met with the ANC’s chief whip and the speaker of parliament to discuss the report on Wednesday, according to people familiar with the matter. A group of NEC members sympathetic to Ramaphosa held a meeting of their own, said the people who asked not to be identified discussing private party matters.

Pule Mabe, the ANC’s spokesman, didn’t immediately respond to a request for comment sent by text message.

Resignation Option

The meeting of Ramaphosa’s supporters was called by Minister in the Presidency Mondli Gungubele. Two NEC members who are close to Ramaphosa expressed concern that the president may opt to resign — a replay of what happened in June when the scandal over the game-farm theft first erupted and he took advice on whether or not he should quit.

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Ibom MRO to Bring in Forex to Nigeria 

Akwa Ibom State to open a cutting-edge smart terminal building at the Victor Attah International Airport

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U.S dollar - Investors King

The governor of Akwa Ibom State, Governor Udom Emmanuel, has announced that the state is close to opening a cutting-edge smart terminal building at the Victor Attah International Airport and that this will generate foreign exchange for Nigeria. 

Investors King has also learnt that an MRO facility for aircraft would be operational from January.

This comes on the heels of praise from his Edo State counterpart, Gov. Godwin Obaseki, who attended the Tuesday reception in Uyo for two additional A320-200 Airbus aircraft that the state’s Ibom Air fleet had leased from a European company.

Speaking at the event, the governor of Akwa Ibom said that while there were already efforts underway to persuade the government to lease the MRO, the MRO is an investment because it was built with naira, despite its current depreciation, and will therefore generate income.

The Akwa Ibom governor said “Our terminal building is world-class in Africa, our MRO is world-class. If you find one today in the entire Gulf of Guinea, tell me I’ll disassemble this one and build another.

“Look at our MRO; what you see here can accommodate two 747 aircraft as well as eight CRJ aircraft, which we are flying for servicing at the same time.”

“This is the only MRO in this part of the world today, and these facilities are not built with local currency, but we are building this MRO with naira that has no value.”

“I invest in areas where we can see a return on our money. Right now without blinking an eye, I can make over $ 30 million with this MRO if we decide to sell but we are not selling, we will make a foreign exchange from this investment.

“Airbus is on us to come and lease our MRO for all their regional flights, but we are not selling.

“We are going to open up this place ( MRO facility) from January next year for commercial activities and we are going to earn in dollars.”

He thanked Ibom Air’s Board of Directors, Management, and Staff for making him proud, emphasising that “they have done very well.”

Gov. Obaseki, who spoke at the event, stated that Akwa Ibom has become the country’s flagship state for its efforts to invest in and make significant strides in the aviation sector.

Obaseki described Akwa Ibom as the country’s flagship state for its efforts to invest in and expand the aviation sector. “Ibom Air is always completely booked.” Let me thank you on behalf of Nigerians,’’ Obaseki said.

In his remarks, the Managing Director of Ibom Airlines., Mr Mfon Udom announced plans to begin regional flights in 2023.

Udom said the new addition to the fleet of Ibom Air would expand its carrying capacity and boost employment opportunities in the state by 40 per cent.

“With this new capacity coming on board, we are delighted to inform our passengers that we have increased our offerings, providing more frequencies for their convenience.

“The Uyo-Lagos and Uyo-Abuja routes now have three frequencies each every weekday, while our Lagos-Abuja passengers will have seven frequencies to choose from both ways, every weekday,’’ he said.

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