The latest report from the Auditor General of the Federation has uncovered alleged malpractices by the Central Bank of Nigeria (CBN) under the previous administration.
According to the report, the CBN split the transfer of $134 million to the United Kingdom branch of a Nigerian bank to avoid violating its own guidelines on offshore deposit placement.
The audit document, covering the year 2020, revealed that the CBN deposited $134 million into First Bank of Nigeria (UK) London, splitting the amount into $59 million and $75 million. This action was purportedly taken to circumvent the provisions of the CBN guidelines on offshore deposits.
Paragraph 2(e) of the guidelines specifies that the exposure limit to any foreign branch/subsidiary of a Nigerian bank should not exceed $100 million or 30 percent of the branch/subsidiary’s average monthly deposit over one year. However, the CBN allegedly failed to provide sufficient information to verify whether First Bank of Nigeria (UK) Ltd. London qualified for such exposure based on its average monthly deposit.
The Auditor General attributed the CBN’s alleged misconduct to weaknesses in its internal control system, stating that such actions could be considered as diversion of public funds and expose the CBN to avoidable risks.
In response, the CBN defended its actions, stating that the exposure to First Bank of Nigeria was within the approved limit and arguing that the splitting of deposits was for liquidity planning purposes. The CBN asserted that the placement of deposits with First Bank of Nigeria was never above the approved limit.
However, the Auditor General directed that the CBN should provide justification to the Public Account Committee of the National Assembly for allegedly violating its guidelines for deposit placement. Failure to do so could result in sanctions for gross misconduct as specified in the financial regulations.
The revelations in the audit report raise concerns about the integrity of financial practices within the CBN and highlight the importance of accountability and transparency in the management of public funds.
