The media has been awash lately with news that the Central Bank of
Nigeria (CBN) has banned nine deposit money banks (DMBs) from the
foreign exchange market, for allegedly hiding over $2 billion belonging
to the Nigerian National Petroleum Corporation (NNPC), being dividend
from the Nigeria Liquefied Natural Gas Limited (NLNG), from the Treasury
Single Account (TSA).
From what’s in the public domain, it is apparent that President
Muhammadu Buhari was briefed on the alleged breach by the banks, and
that they have all been mandated to move the monies to the TSA in
keeping with the policy directive of government before they can be
allowed to participate again in the forex window.
Interestingly, before the TSA came into effect, the NLNG was paying
dividends from the investment of the government in the NLNG through the
NNPC, through its accounts domiciled with a couple of Nigerian banks.
These dividends had accumulated to about $5bn over time. It is alleged
that the NNPC was investing this dividend payment in a dedicated account
as fixed deposits with some commercial banks. However given the rush by
the present government to implement the TSA, an initiative conceived
under the Goodluck Jonathan administration, the banks were caught
off-guard and appeared unable to remit the monies back to government
coffers at once. Consequently, it was decided that the remittance of
these NNPC funds (dividends) be staggered so as to mitigate the negative
impact it might have on the economy.
The TSA policy came into force in August 2015 with government saying
it would help control leakages in the system. However, following
deliberations with the chief executives of the banks, the CBN clarified
that the dividends due to the NNPC from the NLNG were exempted from the
TSA policy. The Accountant General of the Federation, M.K Dikwa issued a
circular addressed to the Director, Banking and Payments System
Department of the CBN with reference number FD/LP2015/C/ADC/20/1/DF,
dated September 14, 2015 to clarify this.
This is why several stakeholders are surprised at this summersault,
particularly with reports claiming that the president gave his blessing
for the ‘erring’ banks to be sanctioned. Now with the economy needing as
much support as it can get, the sole source of breathing live into the
economy is in danger of being heated up and the public sent into panic
mode since this news broke.
Lenders’ Reaction
Expectedly, several of the deposit money banks involved are reacting
to the development. While some posit that they are not the only ones
involved, the CBN tamely reacts that the others would be further
investigated, a stance that does little to assuage the fears of the
public. Many are of the position that the CBN ought to have done its
homework well before castigating few out of presumably more offenders,
particularly given the sensitive nature of the banking sector and the
impact it will always have on the general economy.
For instance, Fidelity Bank has vehemently denied withholding
government fund that would have been remitted to the TSA. A source at
the bank clarified that the said N2.1 billion was part of NLNG dividends
from the investment of the government in the company to the NNPC,
which, going by written communication with policy makers, is not meant
for the TSA.
It will be recalled that when the government raised the issue that
the dividends should have been paid into the Federation Account, the CBN
Governor invited the CEOs of all the banks that had the funds for a
meeting in Abuja to reconcile the amount in each bank with the records
of CBN/NNPC, and to agree on a repayment time table of the funds with
the banks. Also, as at the time the TSA implementation commenced in
September 2015 some of the banks had paid back over 50 percent of the
funds based on the repayment timetable agreed with the CBN.
“When the TSA commenced, the banks reported these funds as part of
government deposits they had but it was not remitted like other TSA
funds because of the remittance timetable that had been agreed with the
CBN”, the source disclosed.
It is evident that the CBN and NNPC had a clear picture of the status
of these funds with the banks. So for the CBN to now hurriedly suspend
nine banks from the foreign exchange market alleging breach claiming to
have the consent of the president, it is either there is a policy
summersault or someone is out to deceive the Nigerian public by heating
up the economy.
UBA on its parts has issued a statement claiming that it has fully
remitted what is due on the NNPC/NLNG account to the TSA. “We wish to
state very categorically that UBA has completely remitted all NNPC/NLNG
dollar deposits,” the statement read in part.
Similarly, Diamond Bank claim that it has been very transparent in
its management of remittances of the NNPC/NLNG account to the TSA, in
keeping with agreed terms.
Almost all the banks weld evidence that the Accountant General had
through a circular issued in September 2015 exempted 13 government
agencies from the TSA. Notable among the agencies so exempted are, NNPC,
Power Holding Company of Nigeria, Bank of Industry, Nigerian Railway
Corporation, Federal Mortgage Bank of Nigeria, Bank of Agriculture,
Niger Delta Power Holding Company/National Integrated Power Project,
Ajaokuta Steel Company Limited, Galaxy Backbone Limited, etc.
In addition, the affected banks also claim that in keeping with the
TSA Implementation which commenced in September 2015 some of them had
paid back over 50 percent of the funds based on the repayment timetable.
What Will It Benefit To Throw the Economy Into Panic With the TSA Policy?
Nigerians welcomed the TSA policy with joy, believing the
government’s position that it would help block leakages. The impact, in
some case has been good, I must say.
For clarity sake, the TSA is simply a public accounting system under
which all government revenue, receipts and income are collected into one
single account, usually maintained by the country’s Central Bank and
all payments done through this account as well. The purpose is primarily
to ensure accountability of government revenue, enhance transparency
and avoid misapplication of public funds.
The maintenance of a TSA is intended to help ensure proper cash
management by eliminating idle funds usually left with different
commercial banks and in a way enhance reconciliation of revenue
collection and payment, however, in an economy such as ours, that is
heavily dependent on government, the speedy implementation of the TSA is
certain to cause a lot of dislocations.
One will imagine that in managing these dislocations, consensus
building, rather than military fiat is required. This argument is
premised on the fact that the economy is grossly underperforming and
would require the injection of funds into critical sectors. This cannot
happen with a weak financial system. The government therefore needs to
rethink its harsh stance as expressed with this brash ban.
Fidelis Nwangwu, a public affairs analyst, writes from Lagos.
No comments:
Post a Comment