Recent media reports indicate that some unscrupulous Nigerians are in the habit of undermining the foreign exchange (forex) regulations as clearly stipulated by the monetary authorities. The reports claim that these Nigerians either use fake travel documents (visas) to access foreign exchange and even when they use genuine documents, they find other ways to beat the system by cancelling their flights, that is, abandoning their plans to travel and convert the already secured foreign exchange into other unauthorised uses.
The law guiding the administration of foreign exchange demands that it must be used for the stated purpose and within a given time. If the applicant is not able to exhaust the amount applied for and given, the excess must be returned to the bank. That is a theory observed more in the breach.
Reacting to this development, the Central Bank of Nigeria (CBN) directed the commercial banks to publish on their wedsides the names and Bank Verification Numbers (BVN) of the defaulting customers who presented fake travel documents or canceled their tickets and failed to return the already purchased foreign exchange. Also reacting to this unwholesome development, some members of the Bankers Committee said that the trend, if not curbed, portends great risk to the integrity and stability of the forex market.
In the opinion of this newspaper, this is not about publishing the names of the defaulters and it ends there. Without mincing words, this is clearly a financial crime, a case of obtaining under false pretences. In our local lingo, it is called 419 or OBT. There is no other way to look at it. There are provisions in the nation’s codes of criminal law to address issues like this. It is an attempt to frustrate and sabotage the efforts of the monetary authorities to put in place a forex policy that will serve the interest of all those who have genuine needs for the scarce resource. In addition to exposing their identities, the security agencies must be brought in to handle the criminal intent of those involved and deservedly bring them to justice.
Without prejudice to the processes already in place to get to the bottom of this disgraceful conduct, we are inclined to conjecture that most of the people involved are those familiar with the operations of the foreign exchange regime. It will not be unlikely that they are the so-called elite segment of the society who know all the rules and how to circumvent them.
It is not unlikely also that some members of staff of the banks are in cahoots with those playing this illicit game against the best interest of the nation. We say this because it will be a surprise if the banks do not have a mechanism for detecting and or differentiating a fake travel document from a genuine one. That these criminals get away with their methods is proof that there is a likely insider abuse. It is time, in our view, to bring the culprits and their collaborators to book.
The management of the nation’s foreign exchange and the policies deployed for that purpose have remained complex if not controversial. The CBN management will confirm that forex is one aspect of their functions that creates anxiety for everyone involved. For the simple reason that it is scarce and is also at the core of the economy of the country that is so import-dependent. The challenge is always there to manage it in such a manner that all sectors of the economy get their due fairly and equitably.
Beyond that, for some, it is one of the easiest means to becoming a millionaire just by doing nothing, literally. For instance, the official ceiling for forex allocation if one needs a Basic Travelling Allowance (BTA) is $5,000 maximum obtained at official rate. Convert that to Naira through black market channels, one is talking in millions. So, what it means is that the incentive to cheat is there and very attractive.
It is from this standpoint that we insist that the matter must not be swept under the carpet. It is a crime against the state and must be treated as such regardless of the personalities eventually implicated. We mention this because often in Nigeria, the bigger the crime, the bigger the personality involved and the smaller the willingness to apply the full force of the law.
Nigerians are familiar with the notion of round tripping. It simply means accessing forex officially, abandoning the official purpose and converting it to Naira through unofficial channels. The sidelining of the Bureaux de Change was essentially a move to ameliorate their overbearing interference in forex administration. Commendable as that move was, we warned on this page that leaving the field open for banks alone is certainly a risk.
But the CBN cannot do it alone and that is why we are recommending detailed investigation into this matter after which the rules must be stringently applied to discourage saboteurs and their partners in crime.