- As Nine banks’ return fails to lift up naira
Oil marketers have refunded N46 billion in a probe of massive fraud in the sector, The Nation has learnt.
It is all part of the ongoing probe of the rot in the Nigerian National Petroleum Corporation, an Economic and Financial Crimes Commission (EFCC) source said yesterday.
The marketers, who are not named because “the investigation is yet to be concluded”, lifted products without paying a dime to the defunct Petroleum Products and Marketing Company (PPMC), a subsidiary of the NNPC now known as the National Petroleum Marketing Company(NPMC).
The anti-graft agency busted the fraud after going through the company’s records.
A top source in EFCC, who spoke in confidence with our correspondent, claimed that some of the marketers conspired with some staff of PPMC and NNPC to perpetrate the fraud.
The source said: “When we conducted our investigation, we discovered that the affected marketers sourced products from NNPC through PPMC without paying for them.
“In some instances, these marketers got two or three supplies and paid for one. Through connivance, they cooked the books.
“We discovered that products worth about N100billion were lifted and unpaid for by marketers leading to the invitation and interaction with some of them.
“So far, we have been able to recover N46billion out of the N100billion which the nation had purportedly lost.”
The source expressed concern that the some forces within and outside NNPC and PPMC behind the syndicate almost frustrated the EFCC team probing the “fraud”.
“The cartel wielded enormous influence in the sector and it almost frustrated the investigation and the recovery. As a matter of fact, some forces in NNPC and PPMC did not want us to go this far.
In spite of the liberalisation of the process of obtaining foreign exchange, most marketers still rely on the NNPC for their supplies.
Our correspondent’s was unsuccessful in getting the response of the Managing Director of NPMC( former PPMC), Mr. Farouk Ahmed, to the recovery made by EFCC.
Apart from calls, a text message was sent to Ahmed.
He did not acknowledge the calls and the text message.
The EFCC in April quizzed a former Managing Director of PPMC over some transactions and alleged purchase of houses valued at N1.3 billion off Amazon in Maitama, Asokoro and Wuse districts in Abuja.
The petitioners alleged that the ex-MD acquired the houses in less than six months in office.
An ex-Officio member of the Kaduna chapter of the Independent Petroleum Marketers Association (IPMAN), Bako Abdullahi Yelwa, had in February alleged that a cabal had been at work in PPMC.
He said: ”PPMC members of staff are frustrating Independent Marketers. Why will they ask for a percentage of our profit before giving us allocation? And when we refuse, they frustrate the process of getting our allocation. They only give product allocation to marketers that have given them a share of their profit upfront.
“For example, an Independent marketer gets an average of two allocations of Petrol (PMS) monthly and the profit from each truck is 80 thousand Naira. How can 160 thousand naira pay all my staff, service and maintain the stations and still keep me in business?”
In the meantime, the naira struggled throughout last week against the dollar despite expectations that Central Bank of Nigeria’s (CBN’s) decision to re-admit suspended banks into the interbank market would lift the currency.
Nine banks were last month suspended from the forex market for failing to remit Nigeria National Petroleum Corporation (NNPC) dollars back to the CBN.
The action drove the naira way above N400 to one dollar. The banks have all been readmitted into the market after a most disruptive week.
Despite the re-admission of the banks, the expected convergence of exchange rates at the interbank and parallel markets currently remains far-fetched as the liquidity crisis in the currency market persists. The naira has lost nearly 60 per cent of its value this year despite the introduction of the flexible foreign exchange policy by the CBN.
At the parallel market, the naira last week traded between N423 to dollar and N425 to dollar from Monday to Thursday before eventually closing the week at N424 to dollar on Friday. Activity level at the interbank or official market waned compared to the previous week as the naira/dollar spot rate traded at a tight band of N314.20 to dollar and N314.92 to dollar between Monday and midweek, before appreciating to N308 to dollar on Thursday.
Managing Director Afrinvest West Africa Limited, Ike Chioke said the CBN intervened with dollar supply to the interbank market on most trading days of the week as autonomous suppliers remain scarce.
“In the futures market, despite the August 16 2017 Futures contract trading at N241 to dollar, the 1-Year forwards rate hovered between N352 to dollar and N354.70 to dollar during the week (save for Tuesday when it appreciated to N314 to dollar), implying a weaker expectation for future price of the naira.
In the week ahead (this week), we expect activity level at the interbank to stay soft on the back of the general holidays declared by the federal government. We also opine that the apex bank may continue to intervene at the interbank in the interim in order to clear up rising forex demands,” he said.
Managing Director, Financial Derivatives Company Limited, Bismarck Rewane said the CBN may conduct stress tests as well as routine examinations on banks in light of growing non-performing loans and deteriorating asset quality due to naira weakness.
He said there is apprehension on the state of Nigerian banks and that the last released financial stability report was May 2016 for – December 2015 showed the lenders’ asset quality decline. He puts the industry ratio of non-performing loans (net of provisions) to capital increased to 7.4 per cent from 5.5 per cent.
These, Rewane attributed to unfavourable macroeconomic environment and exposure to the oil and gas sector adding that the naira weakness in the forex market and the abuse is a ticking political time bomb.
The country has been grappling with currency crisis since crude oil prices dropped by about 43 per cent from an average of $100.35 throughout 2014 to an average of $57.20 for the first six months of last year. It closed at $49.29 per barrel at the weekend.
Specifically, the drastic fall in the price of crude oil, which constitutes the largest component of Nigeria’s forex reserves has cut dollar earnings from about $3.2 billion monthly to about a billion dollar for the same period. This has negatively impacted on the value of the naira.
Some of the measures put in place by the CBN to end the crisis include the first Naira-Settled Over-the-Counter (OTC) Forex Futures Market (FFM) launched on June 27 with FMDQ OTC Securities Exchange and the introduction of flexible forex policy.
Nation
