Reps probe cancellation of $2.4bn contract by CBN

The House of Representatives has mandated its Committee on Small and Medium Enterprises (SMEs) to investigate the cancellation of $2.4bn worth of forward contracts by the Central Bank of Nigeria (CBN).

The CBN Governor, Olayemi Cardoso, last week told the National Assembly that about $2.4bn of the $7bn foreign exchange backlog he met upon resumption of office came from non-existing entries, requests without import documents, among other shady deals.

According to Cardoso, the discovery was arrived at following an audit report by consultants employed by the apex bank.

The House, following a motion jointly sponsored by Zakaria Dauda Nyampa, Ojema Ojetu and Obed Shehu during yesterday’s plenary, asked the committee to invite the affected manufacturing companies alongside the CBN governor to examine their documents and identify genuine companies with legitimate transactions.

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Rep. Nyampa, in the motion, said “The invalidated forward contracts were originally entered into about a year ago between various Nigerian manufacturing companies and the Central Bank of Nigeria to hedge against currency fluctuations and risks associated with exchange rates.”

He noted that “Having entered into these agreements, affected companies’ bank accounts debited in naira equivalents and letters of credits issued by the participating commercial banks, the Central Bark of Nigeria decided to dishonour the contractual obligations and cancelled the transactions, one year thereafter.”

Meanwhile, the House also mandated its Committee on Finance to carry out a comprehensive investigation into the non-remittance of N1.8 trillion tax revenues to the federal government by Multichoice.

This followed a motion moved by Sa’idu Abdullahi at the plenary on Wednesday, who said Multichoice, a prominent multinational corporation operating in Nigeria, has been accused of non-remittance of tax revenues due to the federal government, as evidenced by the suppression of information.

“The previous attempts by FIRS to recover the unpaid taxes through legal means, including court proceedings and the subsequent resolution to settle out of court by both parties, have not yielded the desired result.

“The systems audit and investigation revealed enormous indebtedness to the tune of over N1.8 trillion in total taxes for MultiChoice Nigeria, and $342 million in Value-Added Tax for MultiChoice Africa that had never paid any taxes since they started business operations in Nigeria. Both amounts were levied upon the Multichoice Group by the FIRS,” he said.

He added, “Nigeria may lose huge revenue that can inject life into the economy if urgent actions are not taken to recover the taxes from Multichoice.”