CBN fails to account for $4.5 billion in foreign reserves between 2018 and 2019 — Report

The Auditor-General of the Federation, Shaaka Chira, has asked the Central Bank of Nigeria, CBN, for an explanation for a missing $4.5 billion fund.

According to an audit report from the Office of the Accountant General, the sum was unaccounted for in Nigeria’s foreign reserves between 2018 and 2019.

The yearly audit report provides comprehensive information about the spending and financial affairs of the various ministries, departments, and agencies under the government within a financial year.

According to the report, the country’s foreign reserves, which stood at US$42,594,842,852.75 in December 2018, decreased to US$38,092,720,200.72 in 2019. By a simple calculation, US$4,502,122,652.03 could not be accounted for.

The infraction occurred following the COVID-19 outbreak, during the tenure of Godwin Emefiele, the former governor of the bank who is presently facing corruption charges. Chira has now urged CBN to offer explanations for the sum.

The audit report, stressing that the stability of the exchange rate may be jeopardised if the apex bank fails to justify the fund, stated: “This violates Section 25 of the Central Bank of Nigeria Act 2007, mandating the bank to endeavour to maintain external reserves at levels considered to be appropriate for the economy and the monetary system of Nigeria.

The report also revealed an ‘unsubstantiated’ decline of over $8 billion in foreign reserves between 2019 and 2020. According to the Auditor-General, as of the close of business on 30 June 2020, total reserves stood at $35.7 billion as against $44.7 billion recorded in the corresponding period of 30 June, 2019.

“The above anomalies could be attributed to weaknesses in the internal control system at the CBN, particularly its inability to effectively manage economic variables that could impact negatively on the reserve” he said.

In addition to these infractions in the Foreign Reserves, the CBN failed to account for the total funds recovered from the Economic and Financial Crimes Commission (EFCC) between 2016 and 2019, despite the Commission’s continuous activities in relation to forfeitures of looted funds to the federal government. The Recovered Funds component of the foreign exchange inflow of $40,502,645.06 was last reported in 2015. There were no reports of Recovered Funds between 2016 and 2020.

“This violates Section 14(3) EFCC Act, 2004, which states that all money received by the Commission under the provisions of subsection (2) of this section must be paid into the Consolidated Revenue Fund of the Federation” Mr Chira noted. According to the Auditor-General, no compelling explanation was given for the depletion of the Reserves, as this could lead to loss of public funds and inability to fund the budget.