EFCC monitors politicians’ dollar transactions •Northern bizmen angry with Sanusi over ban on dollar importation

The recent ban on importation of dollars and other foreign currencies into the country has started biting hard on politicians whose daily transactions are now being monitored by anti-graft agencies using commercial banks.


The apex bank had banned importation of foreign currencies, including dollars, by individuals and corporate organisations without due approval from the regulatory authority. It has also sanctioned 20 bureaux de change following their inability to justify the usage of dollars put into their care and re-introduced Retail Dutch Auction System to eliminate middle men and enable it sell directly to the end users.

A bank manager (names withheld) told Saturday Tribune that the Central Bank of Nigeria had placed politicians and all banks staff in foreign exchange transactions under watch with a view to catching anyone of them that is transacting business without regard to CBN law.

He said, “Nobody wants to be caught by CBN examiners that are going round banks now unannounced (on-the-spot assessment of banks books). We got the information and we have circulated the information. Anyone caught now will have to face the music alone. We have been told at the head office that anyone caught in any act violating CBN law be sacked immediately.”

He also disclosed that some politicians who used to get dollars from them were disappointed recently when their boss told them to look for their dollars elsewhere, as they would not like to incur the wrath of the CBN.

“I was surprised too when I saw my boss telling a politician whom we have been giving dollars before to henceforth look elsewhere because he would not like to be sanctioned by the CBN. The man was disappointed, but there is nothing we can do. It is the CBN policy that forbids selling of dollars to individuals.” he said.

He said many banks now report their transactions regularly to the Economic and Financial Crimes Commission (EFCC) as required by law.

“Before now, banks complied but not in all cases, as we sometimes did not take it seriously. But since the commencement of this policy, we have been asked to comply with all relevant laws governing bank and customer relationship as violation could mean end of job for staff involved.”

A Bureau de Change operator said it was no longer business as usual as customers had reduced drastically since the CBN asked customers to buy from it directly through their banks.

 “We have stopped enjoying influx of customers since the CBN started selling dollar to our customers directly. Before the CBN came up with that policy, most of these customers always patronised us for large volume of money unrecorded. Now we must record them, otherwise CBN will sanction us and my boss has warned us that any staff who failed to record transactions in the company book will be sacked.

“One of my colleagues was given a query last week. He is now under suspension. Everybody is being careful now. I don’t want to be sacked because this is where I get daily food to take care of my family,” he said, adding that their boss preferred to have lower patronage of customers to sanction from CBN.

It was also discovered during the week that some bureaux de change have started asking parallel market operators selling dollar around their offices to move away as they do not want to incur the wrath of the apex bank. This is because they gathered that CBN examiners were going round bureau de change offices to see if there were some of them colluding with the illegal forex marketers to render the policy ineffective. 

Major operators in the foreign exchange market, including Bureaux de Change (BDC), are currently feeling the heat of the new policy introduced by the Central Bank of Nigeria (CBN) to curtail influx of foreign currencies at the expense of local currency.

These developments, which came as a result of sudden increase in the volume of dollar purchased from the apex bank by the forex dealers without corresponding value of productivity in the economy, were meant to protect the value of local currency, the naira, from falling further.

The abuse, according to the CBN, was affecting the nation’s economy negatively in such a way that the external reserves were fast depleting while productivity in the local economy was gradually going down.

Confirming this development, CBN’s Deputy Governor in charge of Economic Policy, Dr. (Mrs.) Sarah Alade, said the apex bank’s management frowned on the existence of strong foreign exchange demand pressures from domestic sources, which are not necessarily linked to increase in the import of goods and services.

She said the management also observed the surge in dollar cash import by Nigerian banks, and the huge cash sale of the dollars to BDCs by banks.

Stressing that Nigeria currently ranks as the largest importer of dollars, unfortunately, she noted, the purchase and sale of such is not adequately documented by the BDCs.

Alade said, “If the trend is not contained, it could pose grave threats to the value of the naira as well as the Nigerian economy, which has gradually become dollarised.”

She reiterated that Sanusi and his team decided to take immediate action to safeguard the naira and ensure its stability in the face of the aforementioned challenges.

Some operators who commented on the impact of the new policy on their operation said they could no longer enjoy cheap dollar as they used to enjoy before, since the apex bank banned importation of foreign currencies and introduced Retail Dutch Auction System.

They said the CBN had made it difficult for them to purchase and sell huge sums of United States dollars to major clients such as politicians and importers of contraband goods without proper documentation.

While some experts say the policy is working in the bureau de change market, they also acknowledge the fact that some banks have reduced their rate of operation as far as money transfer without documentation is concerned. This is because the CBN is currently watching banks to see if anyone of them will flout its new law on money transfer and forex operation.

Businessmen, especially those from the Northern part of the country, are incensed by the decision to ban importation of dollars and other foreign currencies into the country.

Majority of the operators of Bureau de Change in the country come from the northern part of the country and the decision appears to have hit them the most.

Some of them who spoke to Saturday Tribune but did not want their names in print for fear of official clampdown on their businesses said the decision by the Lamido Sanusi-led CBN was not well reasoned out.

Also, reacting to the development, a finance expert and Chief Executive Officer (CEO), Maxwell Funds, Mr. Eniola Maxwell, said “I think it will kill business for Moneygram/Western Union and other agents in that category. The fact remains that the attraction to Moneygram is the fact that you can always get your funds in hard currency. People use Western Union just because of this; otherwise they would have preferred to patronise other money agents. The policy is like throwing away the baby with the bathwater. While it is true that it would check terrorism and curb politicians’ excesses since these  people deal in hard currency, it will at the same time stifle funds that are being transferred from the diaspora, and, as a result, stifle the inflow of foreign exchange.

“Remember the inflow of foreign exchange adds to the supply of foreign currency in the economy and the increase in foreign exchange goes a long way in stabilising the naira.

“I think what the CBN should have done should have been to find a way of strengthening the regulatory framework that would still make it possible to achieve what this naira for dollar policy is out to achieve. Going ahead may create a wide gap between the official market and the parallel market.”

Saturday Tribune’s checks with a bureau de change at Victoria Garden City revealed a wide gap between buying and selling rate. An official who spoke under the covers of anonymity was ready to buy the British pound sterling at the rate of N260 and sell at N268. Hitherto, it was N250 to N252.

The official said the distortions by the apex bank had resulted in scarcity of foreign currency, and that as of the time of speaking with the correspondent, the bureau de change did not even have the pound sterling.

Meanwhile, do Sanusi, during the week, said many politicians would not need to carry dollars if the Federal Government had allowed CBN higher denomination of N5,000 note when the nation was suffering double-digit inflation.

Sanusi, who defended his proposal to print N5,000 notes before it was suspended by the federal government, said higher denomination makes sense to him when a currency has lost value over a period of time.