On Tuesday the 23rd of August 2016, it was revealed that the Central Bank of Nigeria (CBN) recently barred nine commercial banks from all foreign exchange transactions. According to reports, these banks were barred because they failed to remit about $2.21 billion funds into the Treasury Single Account. The funds, which the banks comprising of tier one and tier two lenders and deposit banks, failed to remit belongs to the nation’s oil corporation, the Nigerian National Petroleum Corporation (NNPC). This decision comes two months after the CBN released its new flexible foreign exchange market policy.
Channels Television reported that a top CBN source told them on Tuesday, that President Muhammadu Buhari is aware of the matter and the sanctions to be imposed on the defaulting banks.
The TSA policy established in August 2016 is geared towards blocking revenue leakages in all ministries of government. The TSA policy is also in line with the provisions in Section 80 and 162 of the Nigerian Constitution, which states that revenue must be paid into the federation account, and that no one is expected to use funds without paying into this account first. The implementation of the policy started at a slow pace under former President Goodluck Jonathan but there were no strict sanctions for defaulters.
Nigeria has lost billions in revenue due to leakages in various ministries of the federation. Buhari believes that over $150billion of government revenue has been lost in the past decade due to unaccountability and corruption in the ministries.
According to the CBN, the following banks would be barred from forex transactions until they fully remit the NNPC funds back to the TSA:
- United Bank for Africa (UBA) -$530m
- First Bank of Nigeria (FBN)- $469m
- Diamond Bank Plc-$287m
- Sterling Bank Plc-$269m
- Sky Bank Plc -$221m
- Fidelity Bank -$209m
- Keystone Bank- $139
- First City Monument Bank (FCMB) -$125m
- Heritage Bank-$85m
However, an investigation carried out by Vanguard revealed that “the erring banks had in its records Zenith Bank (Undisclosed amount), which was later removed from the list of barred banks.”
