LAGOS -THE Economic and Financial Crimes Commission, EFCC, is on the trail of several bankers who have perfected a foreign exchange racket.
Already, the anti-graft agency has arrested top managers of a new generation bank over their alleged involvement in the scam and has started full investigation into the activities of other banks' foreign exchange deals.
Confirming the development, spokesman of the EFCC, Mr. Femi Babafemi, said the foreign exchange racket has been going on for long and the EFCC is investigating it.
With the discovery, it has shown that Nigerian banks are the culprits in the free fall of the nation's currency, the naira, due to fraudulent activities some of its top managers.
Investigation has shown that in a grand scheme designed to mop up foreign currencies from the official market only to be resold at huge profit in the open market, top bank managers forge documents including flight tickets, international passports and fake company registration document and use them to illegally apply for Business or Personal Traveling Allowance.
Two weeks ago, managers of one of the new generation banks ran out of luck, when EFCC agents raided the bank's Marina, Lagos branch and carted away thousands of fake travel documents and other supporting papers used in the racket. Two top managers were arrested over the scam.
The discovery of the foreign exchange syndicate in banks has pointed to the source of capital flight from the country.
The Nigerian economy has been facing financial haemorrhage as private Nigerians and corporate bodies aided by banks move funds massively out of the country, after converting from naira to dollar.
In the last three months of 2008, a total of $13.894 billion went out of the country. While about $757 million went out in the week ending 9th September, the amount of foreign exchange flowing out of the country rose to $1.359 billion for the week ending 19th September. It however dropped to $452million on the 3rd of October and rose astronomically to $3.290 billion on 17th October.
The foreign exchange outflow went further up to $3.356billion on the 31st of October and declined a little to $2.397billion on the 14th of November and $2.02 billion and $1.262billion for the weeks ending 21st of November and 28th respectively.
This resulted in the crash of the naira exchange rate which had remained stable in the last two years. The CBN had attributed the collapse of the naira at the interbank to currency speculators who buy and hold currency for them to sell at a future date to make some gain. The movement of funds out of the country comes by way of Nigeria residents buying up dollars with their naira and moving it offshore.
The trend became noticeable in October, last year, when in a matter of weeks, several billions of dollars were purchased through the banks and bureaux de change.
Mr Babafemi of the EFCC said the syndicate might be operating in other banks, but so far, no other bank has been found to be involved in the scam. He however does not rule out the possibility of other banks being implicated in the matter.
The EFCC was tipped off by a vigilant customer who noticed the unusual activity and confronted an employee of the bank who confessed and gave additional information to the customer who reported the case to EFCC.
A source at the EFCC credits the breakthrough in the case to the commission's new programme, ANCHOR, which is aimed at getting citizens involved in the fight against financial crimes.
"When we launched ANCHOR, the idea was to encourage citizens in taking responsibility in solving this problem of corruption in the country because EFCC or any other agency cannot do it alone. We are glad that results are trickling in." An EFCC source involved in the case said EFCC is investigating to ascertain the pervasiveness of the scam.
"We are investigating this to see if this was something that was restricted to the branch or if other branches of the bank are involved. Also, we would like to know the role of top managers in all of this. They will be charged to court very soon," the source said.
"We are certain that this scam is not restricted to one bank. Other banks may be doing the same and we are extending our dragnet."