Reps to investigate CBN on foreign reserve accounts

 

The House of Representatives has mandated its Committee on Finance to investigate without delay, Central Bank of Nigeria, CBN, on the particulars of the accounts in which the foreign reserve of the country are held and to declare any interests accruable to the foreign reserve accounts held on behalf of the federation in the last four years and thereafter periodically.

This development came as a result of the motion brought to the House by Honourable Abdulssamad Dasuki, APC member representing Kebbe/Tambunwal federal constituency of Sokoto State.

Dasuki noted before the House that section 36 of the Central Bank of Nigeria Act, 2007 mandates the CBN to operate as the banker to the government and that the CBN maintains several foreign reserve accounts on behalf of the federation, containing funds in foreign currencies that are held in financial institution before they are shared during the monthly Federation Account Allocation Committee, FAAC, meetings.

The lawmaker further told the House that the foreign reserve accounts accrue reasonable interest from the surplus of funds held by the CBN which have not been monetised into naira and received by the federation.

Moreover, it was disclosed that the CBN contracted fund managers to manage the funds on contractual terms which are not even subjected to public scrutiny or open competitive and transparent processes.

However, the Nigeria Sovereign Investment Authority, NSIA, was established to undertake the management of the excess crude account funds on behalf of the federation and domestic capacity was being developed so that large state-owned funds could be managed by Nigerians. But the house regretted that accruals to the federation foreign accounts have not been openly declared by the CBN and hitherto, remains uncertain in public records.

It could be recalled also that some states have persistently agitated for discontinuance of the ‘agreement’ allowing the Federation Accounts Allocation Committee, FAAC, to decide savings or reserves from disbursable funds to the components of the federation.

The house was worried that the entire circumstances regarding the management of the excess crude accounts of the federation was straining the relationship between the three arms of government, in particular, with the argument of some states that they want the unused funds for certain development purposes and on that premise refused to endorse the continued arrangement.

The fear of the unforeseeable consequences, the house has urged the CBN to report the criteria for engaging any and all foreign managers of the foreign reserve accounts of the federation to ensure transparency and to report annually on the performance and continued compliance of the managers with any set guidelines issued by the CBN for the engagement of the fund managers