Foreign currency traffickers on the prowl

When recently the Central Bank of Nigeria (CBN) raised the alarm that for­eign currency traffickers are on the prowl and ready to drain the nation’s lean foreign reserves, its critics thought it
was crying wolf.
But today, the signals are clear that unless stringent measures are adopted to stem the activities of the foreign currency exporting cartel, Ni­geria may soon go the way of Greece, unable to meet its international obligations.
What started as part of the build-up to the 2015 general elections following widespread apprehensions by citizens on the likelihood of post-election crisis has now metamorphosed into a cartel trade with the veracity to con­front regulators and perhaps beat them to their game.

Daily Sun’s investigations reveal that the business of cur­rency export is growing by the day and arrests are being made at both the international airports and land borders.
“In May 2015, we had $790,036 exported out of La­gos airport. And by the end of June 2015, the figure had risen to $976,399,” said a Customs official at the Lagos airport.
He, however, said, “it will be somewhat difficult to track similar currency movements done by persons who want to breach the law that demands that foreign currencies export like the dollars in excess of $10,000 be declared since it is usually a random search.

“The onus is on the person to declare and if it’s in excess, to explain the source of the money. But those whose source of the money will not scale through the tests of regula­tory establishments have found a way to undermine the process,” he added.

Daily Sun learnt in recent weeks that the Federal Government and CBN have to put officials of the Ni­gerian Customs, Immigrations, National Drug Law Enforce­ment Agency (NDLEA), the Department of State Security posted to border posts like air­ports, seaports and land bor­ders under some pressure to stem the activities of the cartel that strives to breach govern­ment’s policy regulating the outflow of foreign currencies.

In Lagos, some arrests were made in the last two weeks. The first case was reported by the Lagos Airport Police Command of a 45-year old man, Lawrence Agbe, found with €1.5 million (about N274 million) as he was about to board an Arik Air aircraft at the Lagos International Air­port, while the second was identified as a 46-year-old businessman, Bamidele Ib­iteye, who was arrested by operatives of the NDLEA at Abuja Airport trying to laun­der $2.198 million.

But somehow, the intel­ligence community is of the opinion that foreign currency smugglers in Nigeria are often aided by bank officials and regulatory agencies who get kickbacks too from the illicit trade. “It is a highly organised crime that comes with a huge reward to its perpetrators,” a source said.

There are strong indications that most smugglers of for­eign currencies have in recent months opted to go through the nation’s land borders in Lagos and in the northern part of the country considered as very porous.
Garuba Ndalati, Area Con­troller for the Nigeria Cus­toms Service (NCS), Seme Area Command, told Daily Sun that the nation’s famous land border has now been for­tified with eagle-eyed opera­tives who thoroughly search goods leaving or coming into the country.

Last week, CBN admitted it was in a battle to arrest the waning value of the naira against major currencies of the world, particularly the United States dollar; the Brit­ish pound sterling and the euro due to scarcity of the foreign exchange to match the high demand locally.

The apex bank said some unscrupulous Nigerians were arrested trafficking in large volume of forex across the Nigerian borders without declaration to the appropriate authorities.
The CBN said it was also stepping up collaborations with other relevant regula­tory and security agencies to promptly apply appropri­ate sanctions and penalties against anyone who contra­vened the provisions of the Money Laundering (Prohibi­tion) Act 2011. But some eco­nomic experts, who reacted to its arguement, said as more foreign exchange is smuggled out of the country, almost on a daily basis, the Nigerian mon­ey market is the immediate casualty as the criminal trade continues to drain the nation’s stock of foreign exchange.

For instance, the naira, which was trading at N198.50 on the inter-bank market, sold for N237 against the dollar at the black market in Lagos last Wednesday. They described the efforts of the apex bank to tighten liquidity and con­serve reserves as temporary if the illegal fund transfer is not checked, given the attendant pressure, which currency traf­ficking will bring on the sys­tem.

“One of the adverse impact of this ugly trend of traffick­ing of foreign currency is the fact that some of the smuggled hard currencies are used to fund importation of banned goods and items into the country,” including arms and explosives used by insurgents like Boko Haram, said one top bank official who preferred to speak on condition of ano­nymity.

According to him, “the NCS seems to have lost the battle against smuggling. It is therefore feared that some of these items are purchased in foreign lands through il­legal fund transfer in view of the difficulty in accessing funds for such banned goods through conventional banks.

“The immediate fallout of this kind of unrestrained smuggling is dumping and crowding out of local manu­facturers. Today, banned goods and other essential commodities easily find their way into the Nigerian market despite the efforts of the Cus­toms service,” he said.

According to data from the Economic and Financial Crimes Commission (EFCC), currency smuggling has been on the increase, with a higher percentage of arrests made at the Mallam Aminu Kano International Airport, Kano, as most of the suspects were heading for Dubai in the Unit­ed Arab Emirate.

However, Daily Sun learnt further that some individuals with Air Transport Licences (ATL) are also guilty of the illegality as they reportedly freight out foreign currency under the guise of going to acquire airplanes.
This gives them the liberty to move out large sums of foreign currency, mainly US dollars and British pounds sterling without hassles.

According to an economist, Henry Boyo, the more recent series of arrests confirm that currency smuggling and mon­ey laundering are still thriv­ing businesses in Nigeria. He noted that the CBN was not decisive enough in its bid to effectively nip the operations of currency traffickers in the bud, saying the apex bank’s policies, ironically, liberally fund the foreign exchange sources for traffickers, smug­glers and money launderers