Details: Audit Reveals CBN Under Emefiele Failed to Publish Details of $40 Billion Reserves, Violating Regulations

Details: Audit Reveals CBN Under Emefiele Failed to Publish Details of $40 Billion Reserves, Violating Regulations

“For the 2021 financial year, the Bank failed to publish the amount of $40,230,803,228.80 of the country’s external reserves to the public.”

The Central Bank of Nigeria (CBN) did not publish details regarding the country’s external reserves, which amounted to $40.23 billion during the 2021 financial year, according to a recent report from the Office of the Auditor General of the Federation.

The 2021 report, released in December 2024, also indicated that the CBN, under the leadership of Godwin Emefiele, breached its internal policies concerning dollar time deposits.

Mr. Emefiele is currently facing prosecution by the Economic and Financial Crimes Commission (EFCC) at the High Court of the Federal Capital Territory, Abuja, for alleged fraudulent activities during his tenure as CBN governor, which ended in June 2023.

The EFCC accuses him of unlawfully obtaining $6.2 million under false pretenses. It is alleged that he misrepresented a letter purportedly issued by the Secretary to the Government of the Federation on January 26, 2023 (Ref No. SGFF.43/L.01/201), which requested a contingent logistics advance from the CBN, claiming it was in line with a directive from the president—a claim he allegedly knew to be false.

The audit reviewed the CBN’s compliance with its revised Investment Policy and stated, “For the 2021 financial year, the Bank failed to publish the amount of $40,230,803,228.80 of the country’s external reserves to the public.” It also noted that “no waiver or new policy was formed during this period to justify the non-disclosure.”

The report attributed this failure to “weaknesses in the internal control system at the CBN.” Furthermore, the non-publication violates Article 15(v) of the CBN’s revised Investment Policy, which mandates the Bank to establish the content, form, and frequency of communiqués for managing external reserves with a focus on transparency.

The Auditor General highlighted significant risks associated with this breach, including a lack of accountability and transparency, as well as potential damage to Nigeria’s economic credibility.

It was reported that “foreign investors are not adequately informed about the country’s economic position.”

In response to the audit query, the CBN management stated that “information on the external reserves position is available to the public on the Bank’s website under the Reserve Management tab.” They also noted that their Monetary Policy Committee (MPC), which meets bi-monthly, provides detailed information about the reserves. However, despite this defense, the Auditor General’s evaluation found that the bank’s response did not adequately address the core issue. The report stated, “The response from the management failed to address the issue raised,” affirming that its findings remain valid.

The Auditor General’s report urged the CBN governor to appear before the Public Accounts Committees of the National Assembly to justify the failure to publish the information. It also called for sanctions against the bank under the Financial Regulations Act of 2009, citing “gross misconduct.” The report recommended that sanctions related to gross misconduct, as outlined in paragraph 3129 of the Financial Regulations 2009, should apply.

In addition to the issue of non-publication of reserves, the audit revealed a breach of the CBN’s Money Market Policy. A dollar time deposit worth $26.05 million exceeded the prescribed maximum maturity period of three months, instead rolling over for five months without the necessary waivers. This transaction, dated October 21, 2021, matured on March 21, 2022, violating internal policies that are in place to mitigate liquidity and credit risks. The Auditor General attributed this irregularity to weaknesses in the CBN’s internal control systems. 

In defense of its actions, the central bank stated that its policies allow for extensions of up to one year for certain transactions and claimed that the dollar deposit in question adhered to these provisions. However, the Auditor General rejected this explanation, citing insufficient evidence to support the claim.

The Auditor General recommended that the CBN governor should appear before the National Assembly’s Public Accounts Committees to explain both the non-publication of reserves and the maturity extension of the dollar deposit. The report also called for sanctions against the bank under the Financial Regulations Act of 2009, citing gross misconduct.

It warned that “foreign investors are not adequately informed on the country’s economic position.”

 “The CBN Governor should be requested to: Furnish the Public Accounts Committees of the National Assembly with the evidence of approval to extend the maximum maturity period of US$26,051,039.29 deposit of the CBN for five months instead of three months, and Otherwise, sanctions relating to gross misconduct prescribed in paragraph 3129 of the Financial Regulations 2009, should apply,” it stated.

Source Premium Times NG.