CBN Has No Records Of EFCC Recovered Funds From 2016-2019 — Audit Report Reveals

The Central Bank of Nigeria (CBN) has no records of monies recovered by the Economic and Financial Crimes Commission (EFCC) between 2016 and 2019 as required.

This is according to the Office of the Auditor General for the Federation (OAuGF) in its 2020 Audited report of government finances.

The report, dated November 30, 2023, was submitted to both chambers of the National Assembly through the Clerk.

The OAuGF said the last time the CBN recorded an inflow of recovered funds into the federation accounts was December 2015.

It also said that the Recovered Funds component of foreign exchange inflows into the Federation Account of $40,502,645.06 was last reported in December 2015.

Such inflows were not reported between 2016 and 2019, says the report, adding that there were no documents to justify the non-recognition of recovered funds between 2016 and 2019.

In its management response, the CBN said: “There was no inflow for the period January 2016- December 2019.

“However, a review of the account showed credit interest for the period.”

The report asked the Public Account Committees of the Senate and House to request the CBN governor to justify the non-recognition of recovered funds for the years 2016 to 2019.

The report queried what it called an unjustified decrease in foreign reserves of the country between 2017 and 2019.

“Audit observed from the review of CBN Summary of Monthly Foreign Exchange Cash flows that Foreign Reserves which stood at $42.594 billion as at December 2018 decreased to $38.092 billion in December 2019, and there were documents to justify the decrease,” the report says.

The Auditor General also reported a decrease in foreign exchange earnings of about $2,667,269,011.33 in 2019 as contained in the CBN summary of monthly foreign exchange cash.

The Auditor General also said in 2020, the CBN made deposit placements with First Bank of Nigeria (FBN) United Kingdom (UK) Ltd, London amounting to US$134,507, 155.20, split into two tranches of $59,029,548.09 and US$75,477,607.11 to circumvent the provisions its Guidelines on offshore deposits.

It alleged that no further information was given at the time of the audit visit to enable the audit to verify the average monthly deposits of FBN UK Ltd, London over one year to establish if it qualified for exposure above US$100 million

However, the CBN denied any infraction, saying the exposure to FBN, UK was within the approved exposure limit.

It added that the deposits were split for liquidity planning purposes and not to circumvent the provision of the guidelines.

It also said that the placements with FBN UK have never been above the limit stipulated by the Guidelines.

The report accused the apex bank of violating IMF conditions, and diversion of IMF rapid financing instrument of about $3.4 billion

The report says: “The Executive Board of the International Monetary Fund (IMF) through a letter dated 28th April 2020 approved Nigeria’s request for emergency financial assistance of US$3.4Billion under the Rapid Financing Instrument (RFI) to meet the urgent balance of payment needed for stemming the outbreak of COVID-19 Pandemic and the decline in Oil prices.”

“As part of the conditions to release the grant to Nigeria, IMF had requested CBN to credit a Federal Ministry of Finance (FMF) account with the Naira equivalent upon receipt of the Funds.

“Audit observed from the review of documents relating to the grant of the US$3.4 billion that on April 30, 2020, US$ 2,396,458,513.75 was transferred to CBN’s account with Federal Reserve Bank, New York (FRB), while CNY 6,776,051 497.99 was transferred to CBN’s CNY account with People’s Bank of China, Shanghai Office.

“On June 1, 2020, barely one month after the receipt of the fund, the CBN moved US$ 2,396,458,513.75 out of the fund with Federal Reserve Bank, New York to Bank of International Settlement (BIS) for investment in short-term maturities.

“The funds with Peoples Bank of China, CNY 6,776,051,497.99 were moved to the Industrial and Commercial Bank of China (ICBC).

“The funds were classified under the CBN’s portion of the External Reserves instead of the Federal Government Reserve to earn interest that may help to increase the reserves portion of the Federal Government.

“No information/document was provided to justify the movement of Fund, including the subsequent investment and classification as CBN Reserve category that was not made known to the Federal Government and not approved by the Investment Committee of the Bank.”