CBN Reads Riot Act on Utilisation of ‘Free Funds’

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  •  Capacity deficit, a major challenge in W’Africa, Says Emefiele

Obinna Chima

The Central Bank of Nigeria (CBN) monday stated that it noticed that some authorised dealers in the FX market have continued to buy and sell FX referred to as “free funds” despite the provision of an earlier circular that warned against that.

Against the background, it stressed that dealing on FX without appropriate documentation, which includes “relevant entries, blotters, physical documents and non-disclosure to the regulatory authorities is a breach of extant regulations.”

The apex regulator therefore reiterated that as provided in the laws and regulations governing dealings in FX, authorised dealers “shall not sell foreign exchange without appropriate documentation and disclosure to the regulatory authorities irrespective of the source of such funds.”

“Accordingly, authorised dealers shall deal in eligible transactions only and not to engage in any foreign exchange transactions on terms inconsistent with the extant laws and/or regulations,” the CBN stated in a circular posted on its website last night.

Meanwhile, the CBN Governor, Mr. Godwin Emefiele has stressed the need to develop capacity in financial institutions in the West Africa sub-region.

The CBN Governor made this call in a keynote address at the 20th anniversary of the establishment of the West African Institute for Financial and Economic Management (WAIFEM) held in Lagos monday.

Emefiele, who was represented by the Deputy Governor (Economic Policy), CBN, Dr. Sarah Alade, noted that the dearth of the required capacity in the continent inhibits efforts in implementing strategies and policies as well as in achieving their desired development outcomes.

He cited the Africa Capacity Report 2015, which stated that weak capacity in various dimensions was still a problem in the continent.

“Twenty years after WAIFEM was established, the mandate remains as relevant as ever. We must continue to support WAIFEM to remain as relevant as ever. We must continue to support WAIFEM to remain true to the aspirations of the founders.

“Our next step is to ensure that WAIFEM now becomes the training and capacity building institution of ECOWAS. I know the process has started, but we need to fast track it to avail the entire ECOWAS countries opportunity to benefit from WAIFEM’s capacity building programme,” he added.

He described WAIFEM as a foremost institution in the West African sub-region, saying that the status was achieved through the hard work and dedication of its management and staff.

“It is gratifying to note that through several independent evaluations commissioned by donors, the board and other partners, WAIFEM’s programmes have been found to be effective, efficient and relevant to social and economic development in Africa,” he added.