Naira Redesign: EFCC watching 3 Governors over stashed cash

Chairman of the Economic and Financial Crimes Commission (EFCC), Abdulrasheed Bawa, told Daily Trust in an exclusive interview on Thursday that three serving state governors are being monitored for their attempts to launder billions of hidden naira by paying workers’ salaries under the table.

He stated that the raids on Bureau De Change operators will continue and urged Nigerians to support the system for the greater good.

The Central Bank of Nigeria (CBN) declared on October 26 that the nation’s currency would be changed to solve numerous flaws with negative economic impacts.

While the new banknotes will be issued on December 15, Nigerians will have until January 31, 2023, to deposit their old banknotes. However, the wild rush by senior politicians, traders, investors, and other members of the public to take shortcuts and convert hidden riches into dollars, real estate, and other assets has strained the economy.

Godwin Emefiele, governor of the Central Bank of Nigeria, stated that the decision was made to combat terrorism financing and the public’s hoarding of banknotes. The central bank will redesign N200, N500, and N1,000 banknotes.

Despite many searches by EFCC agents in Lagos, Kano, and Abuja, a dollar sold for N882 on the black market in Abuja yesterday, according to checks conducted by this newspaper.

As the currency’s scarcity worsens, BDC operators are purchasing dollars from states, according to sources cited by this publication.

3 governors under EFCC watch

Yesterday, in an exclusive interview with Dailytrust newspaper the chairman of the EFFCC said that some governors are planning schemes to launder money they have kept in homes. He stated that they are currently closely observing three of them.

Bawa, who declined to reveal the identities of the three governors, did reveal that two of them are from the north, while the third is from the south.

According to intelligence at the commission’s disposal, the three governors have finalised arrangements to inject the money into the system by paying the salaries of their state employees under the table.

“Let me tell you something, the intel that I obtained yesterday, and I would like for you to take this matter quite seriously. Already, some state governors have stowed a portion of this cash in various homes, while others are attempting to pay wages in cash in their own states,” he stated. When asked if the commission will summon the governors, the chair of the EFCC responded that they are constantly monitoring them.

He said, “I have no idea how they intend to accomplish this, but we must prevent them from doing so. The move violates Section 2 of the Money Laundering Prohibition Act, despite the fact that they have not yet paid employees in cash.

“The legislation involving monetary transactions is crystal clear. If a cash transaction is to be conducted as an individual and not through a financial institution, the amount cannot exceed N5 million, and if it does, it is illegal to conduct such a transaction. And the fee for corporations is N10 million.

“Yes, I agree that the salaries are inadequate, but why, when you have always paid people’s salaries through their bank accounts, do you now want to pay them in cash? What are you trying to accomplish?” They will come under a variety of guises, and they are attempting to conduct officer vetting, he said.

Disposal of hidden funds through real estate

The head of the EFCC also verified the wild rush by some individuals to dispose of their hidden funds by purchasing real estate.

“We are cognizant of that. Even if you dispose of your property and obtain cash, that cash will be worthless to you until January 31, 2023 unless you deposit it in a bank; so what happened, are you bringing those millions to the bank? “This is why we’re working with the lenders; if you have this information, please share it with us,” he said.

BDC raids will continue.

He stated that BDC operator raids would continue. This, he stated, is crucial for protecting the system from money laundering.

“They (BDCs) are highly vital because many people with naira currency will want to change it to U.S. dollars or other foreign currencies; so, they are quite important.

“And based on the known gullibility of these people (BDCs), they are willing to accept this cash from the owners of these funds and they are willing to depart with the foreign currencies that they have, so that is why they are very important and very crucial to us in this project that we said we were going to undertake,” he said. When money was brought to Bawa’s attention that the dollar was rising despite EFCC raids, he stated that it was a function of demand and supply.

“The truth of the issue is that this is only a simple function of demand and supply; individuals are racing to acquire this commodity not because they intend to utilise it for a substantial economic transaction, but rather as a store of wealth.

“And according to economics, the bigger the demand, the higher the price,” he stated. “Therefore, people view USD and other hard currencies similarly to gold in order to exchange and store their wealth.”

Why I met with bank compliance officers

Recently, he met with the chief compliance officers of banks in Lagos. He explained that the meeting was part of an effort to properly monitor the system and to request their cooperation on the potential of people reintroducing illicit funds into the system.

“We knew that many people were hoarding these cash, and that they would always find a way to try to return them to the system.

“Therefore, regardless matter what they do with their cash, whether they swap it for dollars or use it to buy property from those ready to accept cash, it must eventually return to the financial institution. Therefore, regardless of what you accomplish, banks are highly vital and crucial because they are the ultimate recipients of this income.

“The owner of BDC must deposit the funds he converted for foreign currency, as must the owner of real estate, and so forth. Therefore, we sat down, deliberated, and decided on a course of action. “Everyone is delighted,” he remarked.

No cause for alarm

However, he advised Nigerians to remain calm, stating, “This (redesign of the naira) is really a regular procedure that the CBN should have performed every eight years. The money will be seized.

“All the government is saying is come deposit the money at no cost to you; that is exactly what is taking place, nothing more.”

How can you have an economy where 85 percent of your currency is in circulation while advocating for a cashless society when there are so many ways for people to complete transactions? What do you have to hide? You can transfer money here using your smartphone, and you can transfer money by ATM, POS, and everything else, so why keep the cash? Why are you afraid to go to the bank and request to deposit your money? He queried.

Videos of hidden naira bills being retrieved are prevalent on social media.

In addition, BDC operators in Abuja, Kano, and Lagos reported running out of US dollars due to increased demand.

Although the number of buyers is increasing, we no longer have the necessary funds. Some of them are willing to pay N900 per dollar,” stated one of the BDC operators in Zone 4, Abuja.

When asked if they were being harassed by EFCC agents, he responded, “Not really, of course there was anxiety when they first arrived, but they subsequently stated that they wanted our assistance to find down unpatriotic Nigerians who wish to launder proceeds of corruption.”