Nigerian Banks, EFCC and Place of CBN in Corruption Investigations



Tuesday, May 10, 2016 10.32 PM / Opinion 

The developments over the last two weeks have seen the financial crimes enforcement agency – EFCC visit, invite, arrest, detain and interrogate a number of banking executives over issues for which it has NOT issued a formal statement. 

The very vibrant media has thus filled the void and quoted “sources” for news headlines that got the attention of the Central Bank of Nigeria who issued a statement last night confirming that indeed there was an on-going investigation into specific transactions for which the regulatory body and monetary policy decision making was part of and involved in. 

This was an extra-ordinary statement giving its implications and severity. It had an immediate impact as the Nigerian Stock Exchange released today two statements from Access Bank Plc and Sterling Bank Plc whose managing directors were visited by the EFCC and taken to their offices for further questioning. 

In the release, both institutions denied any wrong doing or association with the widely believed ‘allegations’ reported in various channels and platforms. 

Indeed, the nation is in such a mood and at a stage where anything, quite frankly, is believable about the banks and bankers whom the narrative has defined as the facilitators of wholesome looting of the common wealth of the nation. That is plausible given the revelations in the public space about both the wealth of political office holders, public officials and bankers. 

It is instructive to note that the information and allegations in the public space has not been denied by the central bank of Nigeria, the federal government and indeed the enforcement agencies . 

This development, weighed against confirmed instances of looting that could not have been done outside the banks/banking system has placed a serious searchlight on the banks and their principals who appear convicted in the eyes of the public. 

The fact that the stock market does not reflect this sentiments is lost in the noise and the market’s correlation quotient with the economy. 

Below is the status of the publicly available information on developments thus far.

Word on the street is that more banks are involved in the on-going investigations which a source at CBN confirms includes three tier 1 banks and 4 other Tier 2 banks. 

The developing scenario is one that leads us to expect more ‘headline stories’ in the coming days which may be sensational but should fizzle out ultimately given the nature, quality and less than best practice approach to dealing with investigations related to financial institutions. 

That the banks are complicit in the looting of public funds is not a subject of debate by any remotely informed about the workings of Nigerian banks. But proving the case will require much more than sensationalism and opportunism. 

More damning however is the self-indictment the central bank of Nigeria (CBN) has to accept, endure and assimilate from its role in the USD cash disbursements to the ONSA, the use of its foreign exchange market as a channel and vehicle for money sharing, looting and laundering; and its supervision/examination lapses that facilitated the conditions for such wholesome breakdown in financial systems administration and control. 

As more news come forth, we expect that much more attention will also be placed on regulatory reforms as well as proper investigations to balance the acknowledged balancing act required. 

We welcome this focus on banks and expect same will be extended to the taxation records of individuals of interest and indeed the bank executives. 


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