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Economy

45 account holders abandon N1.2trn in Nigerian banks

Zainab Ahmed, Minister of Finance, Budget and National Planning

—as  house of Reps commences move to retrieve trapped fund

 

Forty-five account holders have had their funds, running to the sum of over N1.2 trillion, trapped in the Deposit Money Banks(commercial banks) over their failure to link the accounts to Bank Verification Numbers(BVN) and the Treasury Single Account policy of the Federal government.

However, the House of Representatives Ad Hoc Committee on Unclaimed Funds in the Commercial Banks and Infractions by the Central Bank of Nigeria(CBN) has commenced a process to free the trapped funds from the strong rooms of the concerned banks.

The House had on January 26, 2022, resolved to set up the committee to investigate the “suspicious and unclaimed funds” sitting with various accounts.

The House had mandated the committee to also investigate the unremitted funds collected on behalf of ministries, departments and agencies of the Federal Government by the banks.

The House had further mandated the committee to look into the alleged “several infractions by the Central Bank of Nigeria against the provisions of the enabling Act and Laws of the Federal Republic of Nigeria and the good people of Nigeria, especially in the area of intervention projects and programs.”

The committee is to report back within eight weeks for further legislative action.

These resolutions were based on a motion moved by a member, Dachung Bagos, titled ‘Need to Investigate Unclaimed Funds in Nigerian Commercial Banks and the Infractions by the Central Bank of Nigeria,’ which the lawmakers unanimously adopted.

Moving the motion, Bagos noted that the Bank Verification Number was introduced by the CBN in 2014 to the Nigerian banking system as a way of checking and combating money laundering, illicit financing and duplicitous ownership of bank accounts used for fraud.

He also noted that about seven years after the introduction of the BVN, about 45.85 million bank accounts across Nigeria are yet to be linked to BVNs, as data released by the Nigerian Inter–Bank Settlement Systems on June 23, 2021, disclosed that the total number of bank accounts in Nigeria, as of May 2019, was pegged at 122.071 million and the active accounts, as of May, 2020 stood at 72.936 million.

On Monday, the committee was inaugurated with several invited ministries, departments and agencies of the Federal Government as well as banks in attendance.

Unyime Idem, chairman of the committee, after representatives of the MDAs made their remarks, said, “For commercial banks, this resolution stipulates that you submit documents that would help us recover unclaimed funds in about 45 million accounts that are not linked to the BVN.

“About 45 million accounts are what the House has been able to discover through the recent reports. Those accounts are not linked to BVN. So, money in those accounts, we want to know the positions, whether you have refunded the FG or what happened to the funds. You are going to give us documents to back these investigations.”

According to Idem, the committee’s assignment is “enormous, crucial and sensitive, given what the country is facing economically.”

He said, “We believe that the outcome of it (probe) would help the country to recover a very substantial part of the unclaimed funds that have been hanging in some of the Nigerian commercial banks and other unauthorized hands.

“Money meant for the Federal Government is not supposed to sit with unauthorized hands for a very long time. Any money that was disbursed or meant for the Federation Account, if the contract has failed or was not executed, the proper thing is for the money to be refunded to the same source it came from.

“But unfortunately, whether out of oversight or deliberate; for whatever reason, so much money, based on the recent discovery, has been tied down somewhere. That is what informed the National Assembly, precisely the House of Reps, to commence this investigative hearing.”

The lawmaker also read a riot act to the stakeholders, saying, “For commercial banks and other agencies that are sitting on these funds that belong to the Federal Government, that are not willing show cooperation and not willing to refund; for banks that are collecting funds on behalf of the government, I think this House would not have a choice but to stop you from collecting funds on behalf of the government if you don’t show cooperation.

“But if you do, it would be a win-win. When we look at your books and then you check the one that belongs to the government and refund it appropriately, there would not be any issue.”

Earlier while declaring the event open, Ahmed Wase, deputy speaker of the House, noted that the motion stated that about N1.2tn was not paid into the Consolidated Revenue Fund. He said the probe was necessary “so that we can improve the infrastructure deficit and other challenges in our nation.”

In his remarks, Ben Akabueze, Director-General of the Budget Office, who represented Zainab Ahmed, Minister of Finance, Budget and National Planning, noted that over years, there had been circulars from government authorities to those concerned to enforce the TSA and BVN policies.

Akabueze said, “When we received this invitation that talked about unclaimed funds in Nigerian commercial banks, basically, my initial reading of this was that it was related to inactive accounts, dormant accounts; because the extant regulation guiding the management of these issued by the CBN, in October 2015, provides guidelines for the management of inactive accounts, dormant accounts and unclaimed funds.

“Those guidelines obligate any bank to have notified the Federal Government of the existence of any such funds belonging to it. If they had, I am sure that those funds would not be there. I hope, without prejudice to the work of this committee, that the CBN would also do the job of enforcing its own guidelines.

“As the work of the committee progresses, whatever other specific information required of us as a ministry, we would be able to provide.”

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Economy

Buhari shuts Zanaib Ahmed, Finance Minister, up on naira redesigning policy

Emefiele-Buhari-and-Zainab-
– backs CBN Governor 

The Eyewitness reporter
President Mohammed Buhari has come out to publicly endorse the Naira redesigning policy of the Central Bank of Nigeria (CBN), thus putting paid to the controversy generated by the decision.
In a radio programme on the Hausa service, President Buhari, on Sunday, said that the decision of the  CBN to launch new designs and replace high-value Naira notes had his support and is convinced that the nation will gain a lot by doing so.
The presidential endorsement of the policy has therefore put paid to the criticism of the policy by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed.
Mrs Ahmed had openly distanced herself and her Ministry, as the management authority of fiscal policy in the country, from the CBN Naira redesigning policy, saying she was not consulted and warning of the consequences of the decision if implemented.
However, President Buhari expressed support for the policy, saying he was convinced by the reasons given to him by the CBN Governor, Mr Godwin Emefiele that the economy stands to benefit from a reduction in inflation, currency counterfeiting and the excess cash in circulation.
The Senior Special Assistant to the President, (Media & Publicity), Garba Shehu, quoted Buhari in a statement as saying he did not consider the period of three months for the change to the new notes as being short.

”People with illicit money buried under the soil will have a challenge with this but workers, businesses with legitimate incomes will face no difficulties at all.”

The president’s support for the policy has however vindicated the stance of the CBN Governor who had insisted that he needs not to consult the Finance minister, having sought and obtained the approval of the President on the matter.

Mr Emefiele had on  Saturday insisted the CBN will carry on with the redesign of some denominations of the Naira notes, saying it followed due process in its decision.

The apex bank made this known via its verified Twitter account, saying that the exercise was 12 years overdue.

The CBN urged Nigerians to support the measure, stressing that it was in the country’s overall interest.

The CBN said the measure was in line with provisions of sections 2 and 19 of the CBN Act.

“The management of the CBN had duly sought and obtained the approval of President Muhammadu Buhari in writing to redesign, produce, release and circulate new series of N200, N500 and N1,000 banknotes.

“The CBN urges Nigerians to support the currency redesign project, which is in the overall interest of every citizen of the country.

“The hoarding of significant sums of banknotes outside the vaults of commercial banks should be discouraged by anyone who means well for the country,” it said.

According to the CBN, it had tarried for too long considering it had to wait 20 years to redesign.

“The standard practice globally was for central banks to redesign, produce and circulate new local legal tender every five to eight years,” Emefiele claimed.

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Economy

News Alert!  Naira redesigning policy: We don’t need to consult anyone- Emefiele slams Minister of Finance 

CBN Governor, Godwin Emefiele
 The Eyewitness reporter
Barely a few hours after her criticism of the Central Bank of Nigeria(CBN) policy of Naira redesigning, Mr. Godwin Emefiele, the Governor of the Central Bank, has slammed the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, saying the apex bank does not need to consult anyone over its decision to redesign the nation’s currency notes.
Mrs. Ahmed had discredited the policy, which is meant to redesign some of the Naira currencies from N100 to N 1000, saying her Ministry as the fiscal authority, was not consulted by the CBN before the decision was made.
While speaking at the National Assembly Friday during the defence of the 2023 budget, Mrs. Ahmed had warned of the dire consequences of the policy on the economy when implemented.
In a swift reaction, Emefiele said that having sought and obtained the approval of President Mohammed Buhari in writing and also backed by the CBN Act, the Apex bank does not need the approval of anyone else.
” In line with Sections 19, subsections a and b of the CBN Act 2007, the Management of the CBN sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N100, N200, N500, and N1,000 levels.
”That is the position of the law. With this, we don’t need to consult anyone else” Emefiele fired back.
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Economy

Finance Minister discredits CBN’s Naira redesigning policy

Zainab Ahmed and Godwin Emefiele

 

— warns of its dire consequences on economy
as naira continues its fall 
The Eyewitness reporter
There seems to be a great disconnect between the fiscal policy managers and the monetary policy managers of the Nigerian economy over the recent decision of the Central Bank of Nigeria (CBN) to redesign the national currencies.
Less than 48 hours after the CBN Governor, Mr. Godwin Emefiele, announced the decision of the apex bank to redesign the major Nigeria’s currencies, the Minister of Finance, Budget and National Planning, Zainab Ahmad, who is the head of fiscal policy management team of the economy, has sharply disagreed with Mr. Emefiele, the CBN Governor, the head of the monetary policy managers of the nation’s economy.
Mrs. Ahmed, who was at the  2023 budget defence with the National Assembly Friday, feigned ignorance of the CBN Naira redesigning policy, saying she only got the information from the media like every other Nigerian.
She however warned of the dire consequences of the policy on the economy if implemented.
” Distinguished senators, we were not consulted at the Ministry of Finance by CBN on the planned Naira redesigning and cannot comment on it as regards merits or otherwise.

“However as a Nigerian privileged to be at the top of Nigeria’s fiscal management, the policy as rolled out at this time portends serious consequences on the value of Naira to other foreign currencies.

“I will however appeal to this committee to invite the CBN governor for required explanations as regards merits of the planned policy and rightness or otherwise of its implementation now.”

Senator Opeyemi Bamidele, during the 2023 budget defence session, warned CBN of consequences that may arise from the policy.

He had told the Finance Minister that barely two days after the announcement of the policy by CBN, the repercussion of it on the value of the Naira to the US dollar was being felt.

” Just two days after the announcement of the policy, the value of the Naira to a US dollar has risen from N740 to N788 to a US dollar due to the rush in exchange of starched Naira Notes for foreign currencies, particularly the dollar.

“To me, the policy may be a well-conceived one, but the timing going by realities on the ground, is very wrong as the Naira may fall to as low as N1,000 to a US dollar before January 31, 2023, fixed for full implementation of the policy.”

It would be recalled that CBN Governor, Mr. Emefiele had on Wednesday said that the apex bank would redesign the country’s currency from 200 Naira denomination to N1,000 notes.

Emefiele said the action was taken in order to take control of the currency in circulation just as he posited that the bulk of the nation’s currency notes were outside bank vaults and that the CBN would not allow the situation to continue.

According to him, the planned policy was in line with Sections 19, Subsections a and b of the CBN Act 2007, upon which the management of the CBN sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N200, N500, and N1,000 notes.

 The policy is expected to fully take off from February 2023.
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