President Muhammadu Buhari has said that banks, importers and individuals involved in round-tripping of dollars they buy from the Central Bank of Nigeria’s (CBN) official market and resell in the parallel market will be made to face the law when caught.

The president gave the warning in an interview monitored on Al Jazeera television at the weekend.

Forex round-tripping or arbitrage refers to a process whereby funds obtained from the official forex market (at lower rates) and diverted to other markets and sold at a higher rate by forex dealer, banks and end users.

There has been strong suspicion that some banks and other end users that get weekly forex allocations from the CBN divert some of the dollar cash to the parallel market because of the wide gap between the official and parallel markets.
In his response to a question on alleged round-tripping in the forex market, the president said: “I agree with you, but we are going to check that and we are going to apply sanctions to anybody that is given dollars by the central bank for the importation of essential raw materials, for example pharmaceutical products, and because he can make N100 more, goes to the parallel market to sell it. We will pursue them and obviously would punish them.”

The CBN Governor, Mr. Godwin Ifeanyi Emefiele, recently said the central bank was on the lookout to penalise banks found in such unhealthy practice.

He also warned that if any bank was caught in the act, it is not just the institution that would be penalised, its management would also be severely punished.

Continuing, Buhari reiterated his stance against the devaluation of the naira, maintaining that “countries that play around with their currencies are countries that have enormous production capacity”.

“They have factories in place, they have infrastructure in terms of power, and their communications and security are actually perfect,” he said.

According to him, Nigeria virtually imports everything, from rice to toothpicks, adding: “If we don’t have the money for importing those things, what is the value in further devaluing the naira?”

He pointed out that in terms of the country’s exchange rate policy, national interest supersedes the interest of multilateral agencies such as the International Monetary Fund (IMF)?

“If it is against our national interest, why can’t we go against the IMF’s advice? Nigeria can only afford to live within its means. If we don’t have the money to back the naira for people to buy the dollars and import toothpicks, chocolates, rice, glamorous dresses,” he said.

When reminded that there were some essential items such as the importation of pharmaceutical drugs that are also being starved of forex, he said: “We have pharmaceutical companies in Nigeria.

“Once upon a time we did what was called institutional strengthening by giving them monies to import machinery and essential raw materials.

“We have already given instructions for the ministries to find out which industries need foreign exchange on a quarterly basis to produce those items that are essential, like pharmaceuticals as you said, but certainly, not to import rice.”

Responding to a question on the anomalies detected in the 2016 Appropriation Bill, the president, who pointed out that drawing up budget estimates involves technocrats, did not rule out the fact that there could be men and women in some ministries, departments and agencies that are working against his government.

“Basically you know producing the budget involves technocrats. I would like people to assess Nigeria, especially this government on where we found ourselves.

“When we came in, there were 42 ministries and we found out that the economy cannot take all 42 ministries and we reduced them to 24. The permanent secretaries, who are the heads of the ministries as technocrats, 21 of them were removed.

“So, people who want to be fair to us should sit down and reflect – the ministries, the permanent secretaries were taken over after eight successive administrations.

“We cannot assume that from the permanent secretaries downwards, they are 100 per cent loyal to the new government. But we would apply sanctions. But since the budget is at the National Assembly, I don’t want to talk more about that now,” he added.

He also urged member countries of the Organisation of Petroleum Exporting Countries (OPEC) to work together to save oil producers from the present situation in the market.

“OPEC has to work together to save the situation. If you can produce less and earn more, why produce more and earn less? I have never been able to understand that, but the market forces are influenced by a lot of political decisions, both regional and global, and we have to live by it.

“OPEC as an organisation has to be mindful of the economic conditions in each member country because that is what will influence that country’s ability to go along with OPEC’s decisions.

“For Nigeria, we were unable to diversify our economy, hence we are much more disadvantaged by the low oil prices. OPEC may try to help us, but clearly, it was basically our fault.

“In OPEC, there are individual national interests: there are regional interests and there is OPEC’s interest. On top of that there are global interests. Large producers like Russia, which are not in OPEC are swing producers. If Russia decides to go flat, it can disorganise OPEC’S principle of controlled production.



“Certainly, under my leadership, Nigeria will not withdraw from OPEC. Between 1976 and 1979, I served as petroleum minister and I valued OPEC as an institution and I think Nigeria will make the necessary sacrifice to remain in OPEC,” he said.

The president also said high demand for forex by parents of students studying abroad had put pressure on the naira, stating that any parent who can afford foreign education, should go ahead to source for forex from autonomous sources.

According to him, “Those who can afford foreign education for their children can go ahead, but Nigeria cannot afford to allocate foreign exchange for those who decide to train their children outside the country. We can’t just afford it. That is the true situation we are in.”

The president’s remark on the possible review of forex sales for foreign tuition conflicted with the CBN’s statement three weeks ago when it allayed fears that it was going to stop the sale of forex for school fees.

The central bank’s statement came on the heels of the last meeting of the Bankers’ Committee where bank chief executives had expressed concern over spiralling demand for forex for school tuition oversees. However, no decision was taken on the issue at the meeting.

The statement by the Bankers’ Committee caused jitters in the forex market, as parents rushed to buy as much dollars as they could get, leading to increased pressure on the naira which depreciated by several percentage points to over N400 to the dollar in a space of one week and forced the central bank to issue the statement to douse concerns among millions of Nigerian parents.

http://businessnews.com.ng/2016/03/08/fg-will-punish-banks-importers-caught-round-tripping-buhari/

The question is which bank is not involved?

Story time for umu nnunu.

Are you sure this man go fit remember all the things wey him talk say him go do?

The best form of defense is to attack. Government shouldn't have given them that free space, it should have been paid directly to the supplier from the CBN.


Buhari can't spend all his time in office probing pass events while more are springing up everyday. Get all the loopholes blocked.

Introduce a system that will make it difficult for people to cheat, that's what intelligent leaders/people do.


Build a system that even if you are not there, things will still work well.

Close the wide gap & arbitrage will naturally die... threats won't do Jack!

The wide margin will tempt even "Angels" to explore if an opportunity to profit presents itself..

Buhari dey vex ooh

What I suspect is that CBN will approved school fees for applicants, their banks will deny the applicants and blame CBN, the applicants blame CBN and FG while the bank officials sell the approved funds to willing and ready buyers. Imagine buying at 199 and selling at 300, that is 50% profit

9jatriot:
What I suspect is that CBN will approved school fees for applicants, their banks will deny the applicants and blame CBN, the applicants blame CBN and FG while the bank officials sell the approved funds to willing and ready buyers. Imagine buying at 199 and selling at 300, that is 50% profit

DMB are now mandated to publish in national dailies approved Forex lists so they can't do that.... If CBN approves for you, they can't deny you..

Olisa Metuh sef bought FX for his kid's school from Diamond bank, it was in one of last week's thisday newspaper.

modath:


Close the wide gap & arbitrage will naturally die... threats won't do Jack!

The wide margin will tempt even "Angels" to explore if an opportunity to profit presents itself..

The CBN cant do dat as of now. If devaluation is done and naira falls to say 250, the parallel will still hoard and create artificial scarcity to sell for 400+.

We simply dont av enough dollars to satisfy our high import taste. Hence the dollar should be reserved for the most important things...dats what PMB is saying

Olisa Metuh?? No witching in this case?

If that is the case, how then do the banks round trip?

If CBN approves dollars for you, I thought they would directly transfer the payment to the company you are making payment to abroad? How then do they do the round tripping exactly? Seriously, it confuses me.

modath:


DMB are now mandated to publish in national dailies approved Forex lists so they can't do that.... If CBN approves for you, they can't deny you..

Olisa Metuh sef bought FX for his kid's school from Diamond bank, it was in one of last week's thisday newspaper.

tosin2013:


The CBN cant do dat as of now. If devaluation is done and naira falls to say 250, the parallel will still hoard and create artificial scarcity to sell for 400+.

We simply dont av enough dollars to satisfy our high import taste. Hence the dollar should be reserved for the most important things...dats what PMB is saying

Seems you are misunderstanding me.... twould be quite silly of me to get behind devaluation when the balance of trade is not in the nation's favour...

The divergence between the official (CBN manipulated) & the PM should ordinarily not be more than #50 (give or take 10# either ways)cos CBN can't meet all the demands but we all witnessed how speculators & hoarders forced it all the way to 390+ till recently that it came back to 310..

There is scarcity of dollars but the scarcity isn't as bad as the unseen evil hands manipulating rates are making it look like...

Whatever was done to drive it down should be sustained till arbitrage is no longer profitable..

You get me now?

NLder arbitrage go get enough mentions for this thread !

ok

Nigeria: A country where the president and his cronies send their children abroad to study but deny the populace similar privileges.

Hmmmm

APC we don tire for the Mouth gig!!!! We need the real action!

How will this be achieved

But I pray he succeeds in this because many heads will roll as many are involved in this evil

Good one

K

Ki eku ile o gbo ko so fun toko

mycar:
The best form of defense is to attack. Government shouldn't have given them that free space, it should have been paid directly to the supplier from the CBN.


Buhari can't spend all his time in office probing pass events while more are springing up everyday. Get all the loopholes blocked.

Introduce a system that will make it difficult for people to cheat, that's what intelligent leaders/people do.


[size=18pt]Build a system that even if you are not there, things will still work well.[/size]

End of Discussion!

Adesiji77:
President Muhammadu Buhari has said that banks, importers and individuals involved in round-tripping of dollars they buy from the Central Bank of Nigeria’s (CBN) official market and resell in the parallel market will be made to face the law when caught.

The president gave the warning in an interview monitored on Al Jazeera television at the weekend.

Forex round-tripping or arbitrage refers to a process whereby funds obtained from the official forex market (at lower rates) and diverted to other markets and sold at a higher rate by forex dealer, banks and end users.

There has been strong suspicion that some banks and other end users that get weekly forex allocations from the CBN divert some of the dollar cash to the parallel market because of the wide gap between the official and parallel markets.
In his response to a question on alleged round-tripping in the forex market, the president said: “I agree with you, but we are going to check that and we are going to apply sanctions to anybody that is given dollars by the central bank for the importation of essential raw materials, for example pharmaceutical products, and because he can make N100 more, goes to the parallel market to sell it. We will pursue them and obviously would punish them.”

The CBN Governor, Mr. Godwin Ifeanyi Emefiele, recently said the central bank was on the lookout to penalise banks found in such unhealthy practice.

He also warned that if any bank was caught in the act, it is not just the institution that would be penalised, its management would also be severely punished.

Continuing, Buhari reiterated his stance against the devaluation of the naira, maintaining that “countries that play around with their currencies are countries that have enormous production capacity”.

“They have factories in place, they have infrastructure in terms of power, and their communications and security are actually perfect,” he said.

According to him, Nigeria virtually imports everything, from rice to toothpicks, adding: “If we don’t have the money for importing those things, what is the value in further devaluing the naira?”

He pointed out that in terms of the country’s exchange rate policy, national interest supersedes the interest of multilateral agencies such as the International Monetary Fund (IMF)?

“If it is against our national interest, why can’t we go against the IMF’s advice? Nigeria can only afford to live within its means. If we don’t have the money to back the naira for people to buy the dollars and import toothpicks, chocolates, rice, glamorous dresses,” he said.

When reminded that there were some essential items such as the importation of pharmaceutical drugs that are also being starved of forex, he said: “We have pharmaceutical companies in Nigeria.

“Once upon a time we did what was called institutional strengthening by giving them monies to import machinery and essential raw materials.

“We have already given instructions for the ministries to find out which industries need foreign exchange on a quarterly basis to produce those items that are essential, like pharmaceuticals as you said, but certainly, not to import rice.”

Responding to a question on the anomalies detected in the 2016 Appropriation Bill, the president, who pointed out that drawing up budget estimates involves technocrats, did not rule out the fact that there could be men and women in some ministries, departments and agencies that are working against his government.

“Basically you know producing the budget involves technocrats. I would like people to assess Nigeria, especially this government on where we found ourselves.

“When we came in, there were 42 ministries and we found out that the economy cannot take all 42 ministries and we reduced them to 24. The permanent secretaries, who are the heads of the ministries as technocrats, 21 of them were removed.

“So, people who want to be fair to us should sit down and reflect – the ministries, the permanent secretaries were taken over after eight successive administrations.

“We cannot assume that from the permanent secretaries downwards, they are 100 per cent loyal to the new government. But we would apply sanctions. But since the budget is at the National Assembly, I don’t want to talk more about that now,” he added.

He also urged member countries of the Organisation of Petroleum Exporting Countries (OPEC) to work together to save oil producers from the present situation in the market.

“OPEC has to work together to save the situation. If you can produce less and earn more, why produce more and earn less? I have never been able to understand that, but the market forces are influenced by a lot of political decisions, both regional and global, and we have to live by it.

“OPEC as an organisation has to be mindful of the economic conditions in each member country because that is what will influence that country’s ability to go along with OPEC’s decisions.

“For Nigeria, we were unable to diversify our economy, hence we are much more disadvantaged by the low oil prices. OPEC may try to help us, but clearly, it was basically our fault.

“In OPEC, there are individual national interests: there are regional interests and there is OPEC’s interest. On top of that there are global interests. Large producers like Russia, which are not in OPEC are swing producers. If Russia decides to go flat, it can disorganise OPEC’S principle of controlled production.



“Certainly, under my leadership, Nigeria will not withdraw from OPEC. Between 1976 and 1979, I served as petroleum minister and I valued OPEC as an institution and I think Nigeria will make the necessary sacrifice to remain in OPEC,” he said.

The president also said high demand for forex by parents of students studying abroad had put pressure on the naira, stating that any parent who can afford foreign education, should go ahead to source for forex from autonomous sources.

According to him, “Those who can afford foreign education for their children can go ahead, but Nigeria cannot afford to allocate foreign exchange for those who decide to train their children outside the country. We can’t just afford it. That is the true situation we are in.”

The president’s remark on the possible review of forex sales for foreign tuition conflicted with the CBN’s statement three weeks ago when it allayed fears that it was going to stop the sale of forex for school fees.

The central bank’s statement came on the heels of the last meeting of the Bankers’ Committee where bank chief executives had expressed concern over spiralling demand for forex for school tuition oversees. However, no decision was taken on the issue at the meeting.

The statement by the Bankers’ Committee caused jitters in the forex market, as parents rushed to buy as much dollars as they could get, leading to increased pressure on the naira which depreciated by several percentage points to over N400 to the dollar in a space of one week and forced the central bank to issue the statement to douse concerns among millions of Nigerian parents.

http://businessnews.com.ng/2016/03/08/fg-will-punish-banks-importers-caught-round-tripping-buhari/

You are a great disappointment-

Key word being "caught"

No be who you catch?

Punish ECOBANK

I really dont get this government sometimes..................................LET THE DAMN NAIRA FREE FLOAT AND STOP THIS NONSENSE. Roundtripping will be hard to prove in any court of law. GOOD GRIEF!!!

Bubu punish anybody

we're solidly behind you... ko le da noni

Ok bubu we have heard.

As as how?

[size=18pt]our banks are in serious trouble from oil price crash.

they must round trip the dollars to survive.


President is right but he is dealing with seasoned white collar criminals like likes of CEO's of GTB , UBA , FIRSTBANK and rest. [/size]

abuayman:
Hmmmm

Stop this, dont quote nonsense. If this was a fact tell me how China, with governement controlled banks and offcially state regulated has generated the most billionaires in recent years.

Socialist propaganda, why not move to a pure socialist country. There is nothing wrong with capitalism, its the greed of the human spirit that spoils it.