As EFCC Ambushes Currency Hoarders, Cyber Criminals

With last week’s crackdown on the activities of some erring bureau de change operators and the smashing of a cybercrime syndicate, the Economic and Financial Crimes Commission may have commenced steps to actualise its pledge to bring economic saboteurs into its dragnet as Nigeria awaits the issuance of new naira notes by the Central Bank of Nigeria, writes Festus  Akanbi

In furtherance of its resolve to take advantage of the planned currency redesign, recently announced by the Central Bank of Nigeria to ambush hoarders of money with questionable sources, the Economic and Financial Crimes Commission (EFCC) resumed its raiding of some bureau de change outlets in Abuja and Kano last week with a promise to spread the dragnet to other cities.

 Sources told THISDAY that the black market forex dealers were carrying on their business activity as usual when the EFCC operatives backed by armed policemen stormed their makeshift stalls located opposite the Sheraton Hotel in Zone 4, Wuse, Abuja and took many of them into custody. 

Similarly, operatives of the Kano command of the anti-graft agency stormed the forex market Tuesday evening with about eight vehicles and heavily armed personnel, a situation which threw the market into pandemonium.

The clampdown on illegal forex dealers coincided with the arrest of a Kogi State House of Assembly candidate of the New Nigeria Peoples Party, (NNPP), Ismaila Atumeyi with N326million and $140,500 cash.

A statement by the EFCC disclosed that Atumeyi, who is seeking to represent Ankpa II Constituency in the state House of Assembly, was arrested on Sunday, October 30, 2022, alongside one Joshua Dominic, an alleged serial fraudster, in a sting operation at Macedonia Street, Queens Estate, Karsana, Gwarinpa, Abuja.

Also arrested in connection with the fraud is Abdumalik Salau Femi, a former bank employee, who allegedly supplied the inside information that facilitated the attack on the bank by the syndicate. 

Supporting Naira Redesign

The EFCC Chairman, Abdulrasheed Bawa had endorsed the planned redesign of the naira and cautioned BDC operators against working with currency hoarders who would attempt to seize the opportunity to offload the currencies they had illegally stashed away. 

He also disclosed further that the raids would be extended to Lagos, Port Harcourt, Maiduguri, Ibadan and other cities across the country to stop BDC operators from ‘destroying the naira. 

An official of the commission who described the raid as successful explained that such an exercise was intelligence-led. 

While announcing the new policy to redesign the naira, Emefiele said the policy would be effective from mid-December 2022, explaining that the new notes include N200, N500 and N1000.

He advised Nigerians to take old notes to banks to enable them to withdraw the new banknotes once circulation begins.

Speaking on the motivation for the change, the CBN governor explained that the decision was reached due to persisting concerns with the management of the current series of banknotes, and currency in circulation — particularly those outside the banking system in Nigeria.

According to Emefiele, one of these challenges primarily includes significant hoarding of banknotes by members of the public, with statistics showing that over 80 per cent of the currency in circulation is outside the vaults of commercial banks.

Banking sector analysts believe the intervention of the EFCC would be invaluable at this crucial time since it would be difficult for the CBN to monitor banks at the various points of exchanging old currencies for new ones.

Already social media is awash with photographs of old wads of naira allegedly brought out from storerooms as a result of the plan to redesign the naira, a development that watchers of the banking sector described as a direct fallout of the new CBN policy.

ABCON: Raids on Members in Order 

Responding to the EFCC raids, the Chairman of the Association of Bureau de Change of Nigeria, Mr. Aminu Gwadabe, threw his full support for the crackdown on bureau de change operators. 

He warned in a circular that BDC operators caught in any infraction would risk prosecution by the EFCC.

He said: “This is to inform all licensed BDC operators that they are the gatekeepers of the economy and should not be involved as cash couriers as infractions can lead to prosecution. We advise members to conduct their activities on an account-to-account basis in case of any.”

He described the action of the EFCC as one of the crimes commission’s mandates to check the menace of money laundering and terrorism financing in the economy and the hawking of currency in the street is one of the offences under AML/CFT.

“Therefore ABCON, as a self-regulatory organisation cannot fault the EFCC’s mandate but to collaborate with our regulators and security agencies in dealing with the challenges.

“On our part as an association, we constantly remind our members of the need to ensure they perform their obligations and responsibilities under the anti-money laundering and terrorism financing regime.

“We, therefore, call on all our members to operate within the regulatory framework and conduct their business operations within their offices,” Gwadabe said.

He reiterated his call for the apex bank to consider forex users at the retail end of the market for sanity to return to the market and to reconsider the suspension of liquidity injection into the BDCs. 

“While we can not completely divorce the nexus between the Nara redesigning and the exchange volatility due to leakages and ungoverned space operators, the challenge of severe liquidity in the critical retail end of the market is a major concern that requires urgent attention.

“As usual, we call on the regulators to consider revisiting our suspension of operations to inject liquidity to enshrine sanity.”

 Campaign Spending

As commendations roll in for EFCC, some analysts believe the ongoing political campaign will slow down the fight against hoarding and forex speculation.

Analysts warned that the aftermath of the possible excess liquidity in the system by politicians, occasioned by electioneering, might further increase the inflation rate and lead to a further devaluation of the naira. 

The fear is that although the Electoral Act 2022 has a cap on political donations and expenditures by parties and candidates, it is very unlikely that the politicians will abide by the dictates of the electoral act.

Meanwhile, the commission has expressed its concern about the rising spate of cyber-attacks on banks and the reluctance of the institutions to report such breaches to law enforcement. While warning that such reticence would only embolden the criminals, the EFCC appeals to financial institutions to collaborate with it to secure the financial sector from threats of cyber-attacks.

It will also be recalled that the EFCC had in the wake of the recent announcement by the CBN of plans to redesign and re-issue higher denominations of the Naira, warned Bureau de Change operators to be wary of currency hoarders who would attempt to seize the opportunity to offload the currencies they had illegally stashed away.

A Professor of Economics at the Olabisi Onabanjo University, Ago Iwoye, Ogun State, Sherrifdeen Tella, warned that should politicians release too much cash into the system, there might be dire consequences for the country.

Tella said: “If it is foreign currency, the economy will be awash with a lot of foreign currencies which on the one hand is good. But on the other hand, it is bad because it will cause a lot of inflation. It will further depreciate the naira because people will start changing the foreign currencies to naira that they can spend, and that will cause a further depreciation of the naira. That will result in a higher level of inflation because it will lead to a higher cost of production.” 

 The professor, however, decried that Nigerian politicians were not likely to obey the provisions of the Electoral Act 2022. Another issue giving the crime commission sleepless nights is the rise in cybercrimes.

A 2020 report by Kaspersky Security Solutions states that Nigerians suffered 3.8 million cyber-attacks between January and August. 

Experts explained that cyber attacks are being under-reported by organisations to protect their reputations.

The Nigerian Cybercrime Act was signed into law in May 2015. This piece of legislation covers all issues about cybersecurity in the country.

However, Section 21 of the Cybercrime Act mandates individuals and organisations to report cyberattacks when they happen to the National Computer Emergency Response Team (CERT) to manage such incidents.

“We live in a world dominated by digital infrastructure. If there is a cyberattack on a bank, for instance, people go into panic mode because money is involved, which makes them keep quiet to save face or their reputation.

“They don’t care if it is employees’ information that was revealed or something not related to customers’ accounts, they want to preserve their money which may cause losses to the bank,” a legal cybersecurity expert Enyioma Madubaite was quoted as saying.

However, with the current renewed efforts of the EFCC, chances are that financial institutions will not hesitate to blow the whistle whenever their systems are being compromised in the overall interest of the Nigerian business and economy.