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CBN says sanction of erring BDCs won’t hurt Forex Market

By BusinessNews Staff on October 7, 2013

As investigators from the Central Bank of Nigeria (CBN) wrap off the probe of activities of the 20 bureau de change operators recently indicted by the apex bank Governor Sanusi Lamido Sanusi for alleged money laundering activities, the Economic and Financial Crimes Commission may swoop on officials of the indicted firms this week.

Meanwhile, CBN has assured foreign exchange users that the disciplinary action against the bureau de change operators will not lead to shortfall in foreign exchange supply.

Reacting to the fear that the punishment, which affected 20 operators in one fell swoop may cause upset in the foreign exchange market, CBN’s Deputy Governor, Operations Directorate, Mr. Tunde Lemo, told THISDAY at the weekend that the number of the affected BDCs was too insignificant to cause strains in the foreign exchange market.

Lemo, who confirmed the takeoff of the investigation, said “EFCC is in charge of prosecution after investigation,” adding we have over 2000 BDCs, there is no problem with foreign exchange supply.”

Lemo’s assurance came on the heels of anxiety in the foreign exchange market over the fallout of the clampdown on operators over money laundering activities.

An official of a bureau de change in Ikeja, who declined to give his identity, said at the weekend that the withdrawal of licences of the affected 20 operators had sent jitters down the spines of other operators, adding that the new policy of the CBN would compel bureau de change and banks to put stringent conditions on the way of foreign exchange users.

Although he believed the CBN’s tough measure would bring sanity into the market, he, however, warned that the anticipated stringent conditions from bureau de change operators might force more foreign exchange users to patronise parallel market.
But the CBN deputy governor said only BDCs found guilty would face prosecution, saying it is left to the EFCC to decide the fate of the indicted companies.

According to him, “EFCC will decide. It is only BDCs that are guilty of money laundering, etc that will be prosecuted and these are matters for law enforcement agencies not CBN.”

EFCC Spokesman Wilson Uwajare could not be reached for comments on the development.
The apex bank had announced the withdrawal of operating licences of 20 bureau de change operators and directed the EFCC to bring the officials of the indicted firms to book.
The names of the affected BDCs posted on the CBN’s Website are: FBN BDC, Amity Global BDC Ltd., Haruna A. Rahaman BDC, Majia BDC, Ahali BDC Ltd and Lawabash BDC Ltd.
Others included Bin Dahuud BDC, Garin Gabas BDC, D&D BDC, Fatahul BDC Ltd, Global Payments BDC, Startime BDC, Plannet Ventures BDC Ltd and Fadima BDC Ltd.
The list also included Optimum BDC Ltd, Secon BDC Ltd., Asabana BDC Ltd., Maiksal BDC Ltd and Alim BDC Ltd.
The CBN said the affected BDCs did not render returns on their foreign exchange utilisation.

It noted that the BDCs failed to provide documentary evidence that their purchases were utilised for eligible transactions in accordance with the relevant provisions of the Money Laundering Prohibition Act.

The bank stated further that EFCC had been requested to investigate the matter for the prosecution of indicted operators.
This, the CBN said, would serve as a deterrent to others and a demonstration of government’s resolve to stamp out money laundering in the country.

The apex bank also announced new measures to tackle money laundering. It suspended the Wholesale Dutch Auction System.
“The WDAS is hereby suspended and its place Retail Dutch Auction System (RDAS) is hereby re-introduced with effect from Wednesday, October 2, 2013.

The RDAS will take place on Monday and Wednesday for every week,” the CBN said in a statement.
Statistics reeled out by CBN showed that Nigeria had become the largest importer of U.S. dollars,” a development that led to the replacement of its twice-weekly wholesale foreign exchange auction with a retail version requiring dealers to reveal the identity of their buyers.

However, the central bank’s new measures do not affect the $250,000 weekly limit for foreign exchange dealers’ sales to bureaux de changes, Reuters reported.

Dealers will now have to obtain prior approval to import foreign exchange banknotes, and recipients of proceeds from international money transfer firms such as Western Union and MoneyGram will be paid only in naira.

QUICK TAKES

Before the Ban on Tokunbo Cars
Last week, the Federal Executive Council unveiled a new Automotive Industrial Development Plan, which the Minister of Trade and Investments, Dr. Olusegun Aganga, said would encourage local manufacturing of vehicles and enforce a gradual phase out of used cars, popularly known as “Tokunbo”.

He said government’s projection, with strict implementation of the policy, was that a brand new car locally produced would sell for less than N1.5 million.

With the policy, Nigeria will cease to be a dumping ground for used vehicles and their attendant health and economic hazards.
For a country that spent N445 billion on used cars between 2010 and 2012, moving to boost local production of cars is a commendable initiative.

However, the question is, going by the prevailing economic realities in Nigeria, what is the percentage of Nigerians who can afford to buy a new car even with N1.5 million? This is food for thought for those drumming up this ban on Tokunbo cars policy.
Air Safety
As the nation is plunged into mourning following the death of 13 people aboard a charter plane, which crashed shortly after takeoff from Lagos airport last Thursday, the issue of safety of air travellers in Nigeria has once again come to the front burner of discourse.

While it is true that air mishaps happen all over the world, the frequency of the Nigerian situation should give all stakeholders in the aviation industry in the country a serious concern especially with the memory of the 2012 ill-fated Dana flight 992 that crashed into the densely populated Iju-Ishaga neighbourhood of Lagos State still fresh.

While we are waiting for the outcome of the examination of the aircraft’s black box, the fact remains that some of the air disasters in Nigeria were avoidable.

Those familiar with the Nigerian aviation industry said reliance on fairly used aircraft, poor maintenance culture and failure to adhere to industry standards are some of the threats to air safety in Nigeria.One hopes that after the mourning, when all tears must have been wiped away, those in charge of our aviation industry will sit down and map out plans to ensure things are done properly to check wanton loss of lives again.

Between Lagos,
Ogun, Oyo
In terms of infrastructure, the efforts of Governor Raji Fashola of Lagos State and his counterparts in Ogun and Oyo states, Ibikunle Amosun and Isiaka Ajimobi, are quite commendable.

Lagos is able to retain its pre-eminence as the nation’s economic capital because of the sustained provision of basic amenities, especially roads to the people.

When the current administration in Ogun and Oyo states declared their determination to open up their states for investments, it was applauded.

Today, Abeokuta and Ibadan boast of good roads and bridges and government officials said more are still coming. However, residents of the border communities between Lagos, Ogun and Oyo say there is need to enjoy a piece of the action too.

It is argued that the state governments will be better for it if all the adjourning towns and communities are properly developed. They will not only help to decongest the cities, economic activities that will spring up in the areas will also enhance the states’ internally generated revenues.

[This Day]

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