Senate Indicts CBN over Alleged $1bn Annual Repatriation by MTN

Summons Fashola over $35m unappropriated expenditure

The Senate on Wednesday indicted the Central Bank of Nigeria for causing the abuse of a monetary policy regulating capital repatriation by foreign investors.

It accused the apex bank of not bringing forth the observed deficiencies of the Foreign Exchange Miscellaneous Monitoring Act (FEMMA), instead opting to grant extensions and exemptions which became prone to abuse.

This followed the adoption of the report of its Committee on Banking, Insurance and Financial Institutions on alleged repatriation of $13.6 billion between 2006 and 2016 by MTN Communications translating to about $1 billion annually.

The committee however did not indict MTN Nigeria on grounds that while there was evidence of massive capital outflow, it did not receive proofs of collusion to contravene the foreign exchange laws.

The Senate also mandated the CBN to sanction Stanbic IBTC for improper documentation in respect of capital repatriation and loan repayments amounting to $388,195,183 and $199,440,952 respectively.

This is in addition to a mandate to the apex bank to sanction the activities of Stanbic IBTC nominees in the matter of shares transfer and splitting for the purpose of dividend repatriation and to henceforth render periodic status reports to the Senate on the performance of foreign investments inflows and outflows.

It also adopted the recommendation to mandate the CBN to propose an amendment of FEMMA with a view to ensuring the growth of the economy through massive foreign capital inflow and greater retention of foreign exchange.

“Whereas some of the contraventions were due to poor institutional supervision, systemic lapses and gaping opportunity for the rational investor to exploit,” the report read.

“No doubt there is a disturbing evidence of foreign exchange haemorrhage in Nigeria especially in the period of recession. MTN, for instance, repatriated over $1.3 billion annually since 2006 or $13.92 billion between 2006 and 2016. Just for one company, the phenomenon constitutes a huge outflow that could pose challenges for foreign exchange and national monetary stability,” the report said.

“The Committee did not receive proofs of collusion to contravene the foreign exchange laws. There was evidence of massive capital outflow, but that alone is not conclusive that a crime has been committed. This was relied on by banks, which claimed that despite regular audit by CBN, the CBN did not apply any sanction,” it added.

In another development, the Senate mandated its Public Accounts Committee to summon the Minister of Power, Works and Housing, Mr. Babatunde Fashola over the expenditure of $35 million unappropriated funds for the Afam Power Project.

It also mandated the committee to ascertain the balances from the July 2013 $1 billion Eurobond of the Federal Government from where $350 million was given to the Nigeria Electricity Bulk Trading Company (NBET) and another $350 million domiciled with the Nigerian Sovereign Investment Authority for reinvestment in low-risk investment.

The mandate followed a resolution by Senator Dino Melaye (Kogi APC) who accused the Fashola led Ministry of desperately trying to retrieve the money from NSIA and divert it to the Fast Power Projects.

“Further alarmed that since the introduction of the Fast Power Project by the Federal Ministry of Power, Works and Housing, a total sum of $35 million has been spent by the Ministry on Afam Power Project alone to pay $29 million to General Electric (GE) as cost for turbines and $6million in consultancy fees to other entities respectively, all without requisite feasibility study of the projects and appropriation by the National Assembly as required by the Constitution,” Melaye said.

He observed that a lot of questions are begging for answers as regards the $29 million paid to General Electric and the $6 million paid to other consultants as to “Who were the Consultants and how were they procured? Was there observance of due process in awarding the consultancy of $6 million and in paying General Electric $29 million for turbines? Why is the transaction cloaked in secrecy? What is the true value of Afam Fast Power? Why is the Ministry engaging in constructing new power plant while the government has several idle plants that are seeking buyers for?”