. To apprehend AbokiFx, coys for illegal FX transactions
Clara Nwachukwu
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), again resolved to retain all policy parameters constant.
The decision follows concerns of possible headwinds in the global economy, which the Committee feared might lead to another round of economic crisis.
This is just as the CBN has vowed to take every legal action against all illegal operators of foreign exchange (FX), who have profited from the arbitrage, especially an online platform, AbokiFX, and all the companies that patronise him, leading to the current high exchange rate at the parallel/black market.
These were disclosed today at the end of its two-day meeting of the MPC for September at the end of which members voted in favour to retain monetary benchmarks as follows:
- The benchmark interest rate (MPR) at 11.50%
- The asymmetric corridor at +100/-700 bps around the MPR
- The cash reserve ratio at 27.50%; and
- The Liquidity Ratio at 30.00%
Expatiating on the global headwinds, the CBN Governor, Godwin Emefiele, who read the communiqué, said: “Some central banks in advanced economies have given guidance of intended commencement of monetary policy normalization as monetary and fiscal policy across major advanced and emerging market economies have remained robust.
“This would constitute a further headwind to the full and inclusive recovery of the global economy due to the likely rise in cost of capital. The global economy is confronted with more headwinds than tailwinds, evidenced by the multitude of conflicting signals emerging from various major economies.”
Furthermore, he said forecasts for key macroeconomic variables for the Nigerian economy also support the retention of benchmarks. The Committee noted the improvement in the manufacturing and non-manufacturing PMIs, which increased to 46.9% each from 46.6% and 44.8% recorded in July 2021. This was largely attributed to an increase in new order and rising demand as well as further growth in economic activities in the country.
The global economy is confronted with more headwinds than tailwinds, evidenced by the multitude of conflicting signals emerging from various major economies.
The MPC also urged the fiscal policy managers to do their bit to improve the environment, especially in boosting investors’ confidence and enhancing the ease of doing business.
Illegal FX dealers
The CBN also quelled any speculation that its decision to suspend the sale of FX to bureaux de change (BDCs) will be lifted, and insisted that the only recognised form of transaction in foreign exchange is through the investors and export (I&E) window.
To this end, the apex bank and monetary regulator said it plans to prosecute the owner of AbokiFX, whom he identified as Mr. Olumide Oniwinde, for endangering the Nigerian economy through Naira speculation and manipulations by fixing arbitrary rates that are not based on substantiated data.
Emefiele also linked such illegal and nefarious activities to the current high insecurity in the country associated with banditry, kidnapping and cache of arms and ammunition, used in terrorising Nigerians.
He therefore reiterated that there is no going back on the suspension of the BDCs, while promising to do everything within the powers of the CBN to apprehend and prosecute defaulters.
He said: “The only exchange rate that I can recognise today in the Nigerian foreign exchange market, which is the dominant market, remains the investors and exporters window, which is the market that we expect everybody that wishes to procure forex or someone who wants to sell foreign exchange go to your bank the investors and exporters window will attend to you. I’m sorry to say that I do not intend to recognise that there are any other rates in the market.
Eight weeks ago, we did stop the allocation of foreign exchange to the BDCs. Indeed, we began to ask ourselves: why did we wait for so long that we continued to do this? The reason is because Nigeria remains the only country on earth and the Central Bank of Nigeria remains the only central bank in the world that would dip its hands into its reserves and commonwealth, and you pack dollars and begin to sell to BDC operators all in an attempt to stabilise foreign exchange rate in the market.
“For me, it is a wrong decision! And we should really applaud ourselves that we decided that this should stop, and this has stopped for good.
“The reason I say this is because the Bank of England does not sell dollars to BDCs; they don’t even know they exist. The Feds (Federal Reserves) does not sell dollars to money FX dealers in the United States. Indeed, nobody talks about BDCs on the streets of London. Even at Oxford Circuit, the exchange rate that BDC will give you at Oxford circuit is completely different from the rate that the BDCs will give you in the downtown area of London. Yet, nobody made any emphasis on BDCs in the city of London.”
…We have unwittingly supported activities of those who illegally buy foreign exchange from this illegal market, carry them in aircraft out of this country and go to buy arms and ammunition and bring them back into the country and conduct crime.
The CBN Governor, who spoke with deep emotions continued: “It then beats my imagination that Nigeria carried on with this kind of practice that tended to support illegal activities of people who are involved in graft and involved in corrupt practices. What do they do? Instead of collecting Naira as bribe they tell the person to convert it to dollars so that you can have some dollars in your pocket. And yet the Central Bank of Nigeria in an attempt to moderate the rate in that market decides that it will take dollars from the reserves and begin to support the corrupt excesses of these people.
“Or it is about even through its activities that we have unwittingly supported activities of those who illegally buy foreign exchange from this illegal market, carry them in aircraft out of this country and go to buy arms and ammunition and bring them back into the country and conduct crime. Whether it is Boko Haram, whether it is kidnapping, whether it is all sorts of nefarious activities, we, Central Bank, take our country’s dollar and sell to people to go and buy arms and ammunition to come and hurt us. That is what we are saying that people want us to continue to do. We cannot do that any longer. We can’t!”
AbokiFX clampdown
On AbokiFX, Emefiele said preliminary findings suggest that this website was built and is being used purely for the purpose of foreign exchange manipulation and speculation.
For the benefit of doubt, he reminded that “The CBN Act Section 2 makes it clear that only the Central Bank can determine the value of the Naira.”
He continued: “We have been studying the activities of AbookiFX in the last two and half years. There was a particular time I asked to call the supposed owner of AbookiFX that we want to engage him to understand his model; his basis of accounting and how he came about advertising those rates.
“We found him to be a Nigerian, who lives in England, and conducts this nefarious and criminal activity on our economy. It is an economic sabotage and we will pursue him wherever he is. We will report him to international security agencies. We will track him, because Mr Oniwinde, we will find you. We cannot continue to allow you to condone an illegal activity that kills our economy.
“Now on AbokiFX, the company was registered in the UK in November 2015, and is owned by one person who claimed in his regular filing that there are other people with significant interest in that business. But he does not want to name them.
“So, who are these significant persons behind him? Why are they hiding? This is on the UK’s filing record, and we will go there and conduct those investigations.”
Unusual book keeping, multiple accounts
They get Naira loans, use them to purchase dollars, take a position, change the rate over a given period, sell the dollars they purchased and make a profit.
Emefiele noted that what reinforced AbokiFX’ illegal operations is its poor book-keeping, and plethora of bank accounts in Nigeria, saying: “Since the inception of this business, he has continued to file the same account to the UK Government; the same £1,000 cash at hand, that is his balance sheet, £1,000 cash on one side of the balance sheet, and £7,000 total net assets. The same £1,000 Shareholders’ funds – balanced; debit and credit same £1,000 both ways consecutively for four years.
“Yet, here in Nigeria, he and his company have over 25 bank accounts, with about eight banks in both Naira and dollar with significant turnover. Also showing he is simply milking the system through speculative activity on the Naira and collecting his proceeds in cash through a particular ATM in London.
“Our preliminary findings suggest that this website was built and is being used purely for the purpose of foreign exchange manipulation and speculation. They get Naira loans, use them to purchase dollars, take a position, change the rate over a given period, sell the dollars they purchased and make a profit.
“This is completely illegal; it is unacceptable, and we will pursue them.
“On Mr Oniwinde – another finding also reveals that Mr Oniwinde, the owner of AbokiFX is an illegal FX dealer. Between February 2020 and May 2021, their inflow had sold tens of millions of Naira in FX to several Nigerian companies, and we will find those companies as well.”
Emefeile therefore reiterated that the CBN will no longer condone such illegal activities, where only one person or group of persons benefit, while the rest of Nigerians suffer the consequences through high exchange rate at the open market.
