The Federal Government, Wednesday, blamed the current state of the Naira on orchestrated criminal conspiracies and manipulation by “unscrupulous elements hiding under the cloak of market forces”. The Attorney General of the Federation and Minister of Justice, Mr. Abubakar Malami, SAN, who made the allegation while briefing newsmen in Abuja, said certain disturbing developments confirmed initial suspicion of the government that the currency was being deliberately undermined by those he branded “economic terrorists”.
He said “As a responsible government, we cannot allow such a situation anchored on unlawful alliances and criminal enterprise to continue unchecked, when it is apparent that its primary objective is to sabotage the economic agenda of the present administration”. He alleged that the elements, having failed in their attempts to force devaluation of the Naira, aligned to create an artificial currency situation whose primary purpose was to undermine the economic programme of Buhari’s administration. He said: “We are witnessing manipulative and coordinated speculative activities in the foreign exchange market leading to the current wide differential between the official rate at the Central Bank of Nigeria and the parallel market rate, respectively, in a manner that defies rational economic analysis.
“These nefarious speculative activities exert further pressure on the Naira exchange rate and have created a very wide artificial differential between the aforesaid two rates which are now being exploited by unscrupulous individuals and institutions. “Accordingly, the differential has given rise to sharp practices and rent seeking activities by these entities that run contrary to various provisions of the laws governing the conduct of the foreign exchange market and our anti-money laundering regime.”
He said some of the noticed infractions included round-tripping of foreign exchange sourced from the Interbank Market, rendition of false foreign exchange utilization data, non-repatriation of export proceeds, among others. His words: “In consonance with the policy thrust of this administration to have a zero-tolerance level for corruption, I have therefore directed the Economic and Financial Crimes Commission and other relevant security agencies to further investigate and confirm the information already available to government about the nefarious activities of these elements within and outside our national institutions.”
Besides, the AGF said government was aware of the insidious activities of certain cabal within some strategic national institutions, who rather than exert their regulatory powers, have chosen to use their accomplices within the system to manipulate the foreign exchange market for personal corrupt gains to the detriment of the national economy. He said measure were already in place to deal with the infractions decisively, adding that relevant security agencies are on the red alert to investigate and prosecute the culprits.
Let me emphasize that the Federal Government will pursue this initiative with all the resources at its disposal as the activities of this group, in our view, amounts to acts of economic terrorism against the Federal Republic of Nigeria. “Our response will therefore be decisive, robust and sustained in order to save our national economy. Pursuant to the outcome of the investigations, all persons indicted will be brought to book and will face prosecution in due course”.
Malami said the federal government would in the next few days, evolve a broad-based strategy to stabilize the market and ensure our national economic survival. He said the Federal Ministry of Justice would collaborate with the CBN to ensure that it remained alive to its punitive responsibilities by way of ensuring that breaches and infractions were punished and all identified loopholes blocked.
Nevertheless, the AGF, acknowledged that in the light of current economic realities, it has become apparent to all objective and discerning observers that there is an urgent need to review Nigeria’s foreign exchange market. He however noted that the current state of the economy has led to a very healthy public debate about appropriate response expected of the government. “While there have been an outcry for the government to reject calls for devaluation of the currency, there is no doubt the government has also been assailed by calls from several quarters to adopt the theoretical policy response of devaluating the Naira, in order to absorb the demand pressure of the currency”.
The AGF observed that both President Buhari and Vice-President Yemi Osibajo had repeatedly restated the position of their administration to the effect that devaluation was not an option, as “it is counter-productive and has the potential to cause even more dislocations in the economy, particularly against the backdrop of our current status as a largely import-dependent economy”. “In addition, government has emphatically restated its priority responses which will be geared towards moves to diversify the economy, promote greater accountability within the system through the blocking of all revenue loopholes, undertake a robust asset-recovery process in Nigeria and overseas and prosecute all treasury looters in accordance with the law”, the AGF added.