Business

Where Is $7bn CBN Placed With 14 Banks?

Published

6 years ago

February 11, 2019

By our business correspondent

THE subject of the narrative, in this column, last week, was the $7bn which Festus Odoko, former CBN Corporate Affairs Director, confirmed had been deposited with 14 Nigerian banks in October 2006. It is not clear how many banks, actually, succeeded in raising the mandatory capital base of N25bn, and the additional N35bn steep threshold, required to manage part of Nigeria’s foreign reserves; nevertheless, on hindsight, CBN may have quietly dropped this clearly ambitious requirement, so as to pursue its declared agenda. Regrettably, despite several promptings in repeat publications of the above title by this writer since 2006, CBN management, remained inexplicably, taciturn to any request to confirm status of the $7bn placed with Nigerian banks, without collateral, equity participation or profitable return after 13 years! Lately, however, the Chairman of the Special Presidential Panel for Recovery of Public Property, Mr. Okoi Obono-Obla, noted in a NAN report, in Abuja, on September 7, 2018, that these banks have not repaid the $7bn to government’s treasury “after 13 years.” Curiously, according to the Panel’s Chairman, “when we enquired from CBN, the state of that money, the banks told us that the money was ‘dashed’ to them.” Consequently, upon the Presidential Panel’s request, the EFCC ultimately, invited Dr.Obadiah Mailafia, a former CBN Deputy Governor, to shed light on the controversial $7bn ‘gift’ to banks, when Soludo was CBN Governor in 2006. It is a story of how hapless Nigerians may have been insensitively betrayed, when CBN dashed $7bn of scarce forex to 14 banks, even when CBN and same government were already neck deep in debt to these bankers.” Below is Mailafia’s testimony, which was published in BusinessDay edition of 24/1/2019. Please read on. “In early October of 2006 the then Governor of the CBN, Prof. Chukwuma Soludo brought a proposal to the Board to the effect that he wanted 14 of our commercial banks to take part in the management of our external reserves in partnership with foreign banking associates. He explained that it was rather unfair that only external custodians such as J. P. Morgan, Goldman Sachs and others were having a piece of the action. At the time, we were feeling rather triumphal. The banking reforms had been a success. We had managed to reach a deal with the Paris Club of international creditors. The economy was booming. Our foreign reserves had grown from a lowly US$10 billion in 2004 to an impressive US$38 billion in 2006… We had just launched the FSS2020 project which aimed to position our country as the financial hub of the continent by 2020.” “As I recall, there was a lively debate on the matter. On the face of it, it seemed a good idea to allow our banks to have experience of managing our external reserves as a means of socialisation into the complex world of financial engineering and global financial markets. I had a modicum of doubt, but, alas, could not voice it. The professor was a Mister Know-All with an ego of the Order of Lucifer. The Curse of Mephistopheles.” “Moreover, he always brandished his closeness with Aso Villa to neutralise any dissent. There was a whispering campaign about me being “the black sheep” that would not play ball…” “At the end of the day, the majority carried the day with regard to local participation in foreign reserves management. I must emphasize–for the avoidance of doubt–that at no stage did anyone get even the remotest impression that it was meant to be a loan, bailout or forbearance.” “Of course, it would be another matter entirely if the banks, as an afterthought—after more than a decade–would now prefer to give a different interpretation to that financial deal. This should be confirmed from the archival records of the CBN. The banks had a mandate as fund managers of the US$7 billion that was distributed to them; of which principal and interest were to be returned within the agreed tenor. But I was not privy to those details.” “On 26 March 2007, while busy at my desk in the early afternoon, news came on national radio that I had ceased to be Deputy Governor and had been moved to the presidency to a 419 position as Special Adviser to the President on Political Economy. I resigned myself to the will of God. I had worked alone in the office up to midnight of 31st December struggling to meet the IMF liquidity targets set for us under the Special Support Instrument. Unfortunately my colleagues deliberately sabotaged me. That may have explained my unceremonious departure. I later got to know that late President Umaru Yar’Adua, having studied my dossier, had instructed that I be reinstated immediately. Unfortunately, that same week he went into coma, never to recover. His presidential directive was never obeyed.” “I mention these events in order to explain that, from October 2006 when the reserves were allocated to 14 banks, up to the time I left in March 2007, was only slightly over 5 months. The Directorate for Economic Policy which I headed is the most important function of any central bank, but it is the one Directorate where we do not handle money. We work with computable models for monetary policy while undertaking research and statistical-analytical work to drive economic development.” “I was therefore surprised when, two weeks ago, a friend in the security services sent me a circular emanating from the Villa in which my name had been included on a list of 30 people slammed with a travel ban under Executive Order No. 6. Dated 11 December 2018. I managed to trace their office to a sprawling nondescript building in the outskirts of Asokoro. There, I met a squadron of investigators who gleefully welcomed me as a new captive. I was detained for questioning for the whole day and had to fill wads upon wads of paper about a “missing US$7 billion dollars” during my time at CBN…” “Without prejudice to the ongoing investigations, my position is that whatever monies that were given to banks to be managed on behalf of CBN, must be returned with principal and interest. I feel duty (bound) to share with the panel all that I know about this case. But I will first affirm my legal rights to be treated above board as a witness rather than suspect.” COMMENT: Ultimately, however, even if there is no criminality in the $7bn gift to banks, there is clearly a good case, if refund is not feasible, for converting the $7bn, plus compounded interest, to significant equity in the respective banks. SAVE THE NAIRA, SAVE NIGERIANS!!!

Business

Access Bank Plc, KCB Group Complete National Bank of Kenya (NBK) Transaction

Published

6 days ago

May 31, 2025

august24admin

Access Bank Plc, KCB Group Complete National Bank of Kenya (NBK) Transaction

AJAGBE ADEYEMI TESLIM

Business

Hydrogen, Lagos State Touch Thousands of Business Owners with “Healthy Heart, Healthy Business” Outreach

Published

1 week ago

May 30, 2025

august24admin

Hydrogen, Lagos State Touch Thousands of Business Owners with “Healthy Heart, Healthy Business” Outreach

AJAGBE ADEYEMI TESLIM

Business

Tunji-Ojo Calls for Innovation-Driven Public, Private Sector at Access Bank GLS

Published

1 week ago

May 27, 2025

august24admin

Tunji-Ojo Calls for Innovation-Driven Public, Private Sector at Access Bank GLS

AJAGBE ADEYEMI TESLIM

SPONSORED BY: H&H

Hon. Dr. Olubunmi Tunji-Ojo, Minister of Interior, delivered a compelling charge to public and private sector leaders at the Access Bank Guest Lecture Series (GLS) held on Friday at the Bank’s headquarters in Victoria Island, Lagos. Speaking on the theme “Dare to Dream, Dare to Innovate,” the Minister outlined a sweeping vision for innovation-driven governance, ethical leadership, and urgent reform in the country’s correctional system.

L-R: Kemi Nanna Nandap, Comptroller General of Immigration; Paul Usoro (SAN), Chairman, Access Bank Plc; Olubunmi Tunji-Ojo, Honourable Minister of Interior; Aigboje Aig-Imoukhuede, Chairman Access Holdings Plc; Bolaji Agbede, Acting Group Chief Executive Officer, Access Holdings Plc; and Roosevelt Ogbonna, Managing Director/Chief Executive Officer, Access Bank Plc, at Access Tower, Victoria Island, during the Guest Lecture Series hosted by Access Bank in Lagos… recently.

In his keynote address, Tunji-Ojo drew on his background as an ethical hacker to illustrate how great leadership, like in cybersecurity, must be proactive, identifying and fixing vulnerabilities before they become crises. “Leadership is not about reacting to problems, it is about foreseeing and solving them before they occur,” he said. “And for that, you must always ask: What is your purpose? How will you execute it? And when is the right time to act?”

Dr. Tunji-Ojo showcased the transformation underway at the Ministry of Interior since he took office, including the clearance of a backlog of over 200,000 unprocessed passport applications and the elimination of ₦28 billion in legacy debt. These achievements, he noted, were realised without additional financial aid from the federal government. Instead, the Ministry deployed a strategy built on system integration, technology innovation, and financial self-sufficiency.

Among the innovations highlighted were the rollout of e-visa platforms, contactless passport renewals for Nigerians in the diaspora, advanced passenger information systems, and the commissioning of a Tier-4 data centre to support round-the-clock immigration services.

In one of the most resonant moments of the event, the Minister spoke passionately about the broken state of Nigeria’s correctional system. He revealed that over 4,000 inmates were being held in custodial centres nationwide simply because they could not afford to pay fines as low as ₦50,000. “This is not a legal crisis, it is a moral one,” he declared. “A society that punishes poverty more harshly than crime has lost its moral compass.”

Dr. Tunji-Ojo explained that the Ministry has since partnered with private donors to secure the release of many of these non-violent offenders and is now pursuing structural reforms that prioritise rehabilitation over punishment.

These include digital case tracking to prevent indefinite detention, vocational training programmes within correctional centres, and public-private partnerships aimed at improving living conditions and operational efficiency. “A correctional facility must correct, not condemn,” he said. “Justice without dignity is injustice in disguise.”

Aigboje Aig-Imoukhuede, Chairman of Access Holdings PLC, who welcomed the Minister to the lecture series, praised his clarity of vision and decisive leadership. “What Dr. Tunji-Ojo has demonstrated is that innovation is not about big budgets, it is about big thinking,” Aig-Imoukhuede said. “His approach to public service reflects the same DNA of impact and excellence that defines Access Group.”

Aig-Imoukhuede noted that the Guest Lecture Series was designed to deepen the conversation around leadership, accountability, and service. “We cannot build the Nigeria we want without leaders who understand systems, value people, and are committed to sustainable change.

Today’s conversation has shown us what that looks like in action.”
The event brought together executives, policymakers, and thought leaders from across the country, reinforcing Access Bank’s role as not only a financial powerhouse but also a platform for national transformation through dialogue, vision, and collaboration.

In his final message, Tunji-Ojo encouraged participants to embrace a personal philosophy of excellence and purpose. “Let Access Bank not just be a financial institution, let it be a philosophy,” he said. “Let Nigeria not just be a country of potential, let it be a nation of performance. It is time to refine our genius, not just export it.”