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Thieves in the treasury

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One does not really have to be a medical expert to recognize that the heavy grime and dirt on Nigerian currency notes would also readily serve as  vector for the spread of germs and diseases.

However, despite commendable progress in the adoption of E-transactions, cash handling, still remains very popular regardless of the quality of the notes and the attendant health hazard.

Curiously, however, new currency notes have become easier to obtain at social parties and event centres where they are brazenly hawked with up to 20% discount, even when commercial banks, on the other hand, continue to plead non supply from CBN. Nonetheless, the popular suspicion of ‘under table dealings’ in currency supply were probably validated last week by media reports, such as “EFCC nabs six CBN officials and 16 other bankers over N8bn fraud”, on pg 9 in Vanguard edition of 1/ 6/15.

According to this report, the EFCC picked up the suspects for “stealing and putting back into circulation about N8bn stock of defaced and mutilated Nigerian currency notes which were meant for destruction”; the Commission’s investigations had apparently also revealed that in September 2014, “a box that was supposed to contain N5bn in N500 note denominations was discovered to be filled instead with old newspapers” as replacement at the Ibadan branch of the CBN.

Clearly, the sum of N8bn in the alleged scam may actually be an understatement, since the EFCC also claims that such escapades had enjoyed considerable mileage over several years. Besides, the N134m credit balance in one of the bank accounts and the value of other listed properties allegedly acquired by a standard six certificate holder, who is, incidentally a junior member of the syndicate, may already exceed N1bn! CBN

The whistle blower who uncovered the heist also alleged that the Treasury assistant, and the Coordinator and Head of Security at the Ibadan branch were alerted, but regrettably took no action. Be that as it may, this development probably explains why grimy, dirty notes still form a good proportion of the currency in circulation, despite their potential as vector for transmission of diseases.

Nevertheless, according to a report on pg 8 in Punch Newspaper edition of 1/6/15, in addition to the related health issues, the Financial Crimes Agency, also recognized that “the currency fraud is partly to blame for the failure of CBN’s monetary policy over the years, as the currency mop up exercises by the Apex bank failed to check the inflationary pressure on the economy’. Properly translated in plain language, EFCC’s above statement seeks to explain that in order to reduce the threat of perceived inflationary threat of perceived too much Naira in the system; the CBN commits the hari-kari of adopting high monetary policy rates which are antagonistic to economic growth and job creation. Worse still, the CBN becomes forced in response to reduce the available surplus money supply by borrowing hundreds of billions of Naira that it intends to simply keep as idle funds, despite the attendant oppressive interest rates of up to 15% in order to restrain commercial banks from promoting spending by lending to other customers and fueling inflation.

This unfortunate counterproductive and anti people strategy to restrain inflation clearly becomes meaningless, if some CBN staff, in collusion with other commercial bank staff continue to re-inject billions of already discarded/condemned currency notes back into the system, while the CBN is simultaneously kept busy mopping up perceived systemic excess Naira supply despite the attendant oppressive  debt burden for the nation!

Curiously, the modus operandi of the Ibadan currency theft is awkwardly similar to the process CBN also adopts for its liquidity mop up operations. For example, while the Central Bank on one hand pretends to be socially responsible in attempting to stop inflation by reducing Naira surplus and liberal spending, the same Apex bank also deliberately promotes the liquidity surplus syndrome when it substitutes humongous Naira allocations for the distributable portion of dollar denominated revenue every month!

Thus, in the light of the prevailing culture of impunity in governance, it would be a hard sell to convince Nigerians that the Ibadan currency scam is an isolated case; in this event, it would be presumptions to approve a clean bill to the other 36 stations where such CBN cash operations are carried out nationwide. The exposure in Ibadan would obviously have temporarily trigged cover-up strategies in other CBN cash centres.

Curiously, however, currency scams involving CBN staff are not unusual; for example, in December 2012, the House of Representatives expressed shock to “hear that N2.1bn of newly printed N1000 notes was missing at the Nigerian Security Printing and Minting Company”, a corporation over which CBN has supervisory role. Media reports suggested then, that in order to facilitate investigations, the Managing Director of the NSPMC, one, Ehi Okoyomon who reportedly enjoyed extravagant lifestyles, and the subsisting Head of security, of the Mint Company  were sent on compulsory leave. Sadly, the initial intensity of public attention on this scam has since waned and prosecution may ultimately never be concluded.

In another related development, the cover report of the Sun Newspaper edition of 16th April 2013 also carried a story titled “EFCC detains ex Mint MD Okoyomon over N750m polymer scandal!” The story was sequel to allegations that an Australian Newspaper had reported that, SECURENCY (a note printing subsidiary of the Reserve bank of Australia) paid N750m in bribes to some officials of CBN between 2006- 2008 to secure the contract to make polymer notes in Nigeria. According to the report, apart from the former CBN Boss, senior officials of the Finance ministry and a former President were named as beneficiaries of the bribes for polymer notes.

While no official of the Central Bank has so far been indicted, the EFCC is presently in court with Ehi Okoyomon, the former Managing Director of the Nigerian Security Printing and Mint Company over a request to extradite him to the UK to face prosecution over some findings related to the bribery allegations for the contract for the N20 polymer note.

However, in a curious twist of events, the same CBN which had, earlier zealously promoted the alleged attributes of the polymer notes at great public expense has lately turned around to condemn the adoption of such currency as ill advised because polymer notes were found to rapidly deteriorate in the market place. Nevertheless, it is also alleged that the polymer contract bribes may have also encouraged Securrency to breach the planned establishment of a polymer based mint in Nigeria as part of the principal objectives of transferring technology to developing nations!

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