House Investigates CBN’s Claims on Nigeria’s Economic Indicators

  • CRFFN in the spotlight

James Emejo in Abuja

The House of Representatives thursday passed a motion mandating its Committees on Banking & Currency, Capital Market & Institutions, and Financial Crimes to carry out a comprehensive investigation on alleged contradictory figures from the Central Bank of Nigeria (CBN) and other international organisations about the country’s economic indicators and report back within four weeks for further legislative action.

The resolve followed a motion sponsored by Hon. Yusuf Tajudeen (PDP, Kogi) on the allegations.

He said there had been consistent disparity about the state of Nigeria’s economy indicators between the CBN, local and international financial organisations including the International Monetary Fund (IMF).

According to him, the apex bank and other financial organisations had been churning out contradictory figures about the financial status of the country, which is not only disturbing but confusing.

The lawmaker noted that as part of its measures to regulate the financial standing of the country, the CBN came up with the open market operations, geared towards controlling liquidity adding that from reports by the CBN, it has mopped up, through Treasury Bills Insurance, about N5.683 trillion as excess liquidity between January 2 and April 12, 2008.

He, however, expressed concerned that the CBN allegedly spent N372.9 billion as cost of managing the excess liquidity in circulation between January 2 and April 12, 2008, at a time when many financial experts warned about the dire consequences of the policy on the economy.

Tajudeen, also expressed worry that the CBN went ahead with the policy at a time when it claimed that Commercial Banks were having liquidity challenges, thus raising many questions about the genuineness and rationale for the policy.

According to him: “The CBN which claimed that there was excess liquidity in the economy allegedly gave Commercial Banks the opportunity to access the institution’s window to survive” adding that “the alleged CBN’s approach of claiming to mop up excess liquidity and at the same time borrowing Commercial Banks monies to stay afloat may have collateral damage on the country’s economy.”

He said it was alarming “that with this policy, the CBN may be unwittingly collaborating with Commercial Banks to deplete the country’s finances, helping Commercial Banks to make free money without little or no investment, making the real sector have difficulties accessing loans from Commercial Banks, scare away credible investors, contributing to the “slow-and-cold” activities in the stock market as well as limiting the growth of the nation’s economy.”

In the same vein, the lower chamber further mandated its Committee on Ports, Harbours and Waterways to investigate alleged financial and administrative infractions by the Registrar of the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) and report back in three weeks for further legislative action.
It followed a motion moved by Hon. Prestige Ossy on the need to investigate the allegations.

He noted that,” the sum of N3, 942,709,857 billion was approved for both Capital and Recurrent Expenditures for CRFFN in the Appropriation Act 2017, a breakdown of this sum shows that the sum of N3,650,000,000 Billion was for Capital Expenditure, while the sum of N292,709,857 was for Recurrent Expenditure.

“In the same financial year, CRFFN generated the sum of N14, 124,888.77 out of the projected Internally Generated Revenue of N5,042,348,663,00; which clearly shows poor performance by any standards;

Aware that the sum of N2,725,000,000 Billion was released and disbursed to CRFFN as Capital Expenditures, out of which the sum of N2,414,636,805.66 Billion is alleged to have been expended;
Concerned that the sum of N2.5 billion was paid to contractors prior to the execution of the projects in breach of extant financial laws and regulations.”

He, expressed concern that five per cent of the sum of N836,458,385.28 which was approved for the construction of 61 outpost offices was paid to the beneficiary companies as VAT instead of Federal Inland Revenue Service (FIRS), similarly 33 Contracts were awarded under the guise of construction/provision of buildings’ at the sum of N418,113, 198.56 Million without due process and to some cities that have no relevance to Port or boarder operations, and 5% of this sum was paid as VAT to the beneficiary companies.

However, Ossy said “the way and manner these sums were expended shows financial recklessness and manifestation of incompetence on the part of the Registrar/Chief Executive Officer of CRFFN. The Registrar has abandoned one of the core mandates of the Council which is training of the Freight Forwarders as no training has taken place since he became the Registrar. The Registrar/ Chief Executive Officer of the CRFFN clandestinely recruit over 100 staff without due process, and allegedly occupying his office which he ought to have retired on 17 December, 2017 having attained the mandatory retirement age of 60 years.”