Reps investigate forex allocation to contractors, $30bn alleged revenue leakage

The House of Representatives has commenced investigative hearing into alleged 30 billion dollars annual revenue leakages arising from payments on account of foreign currency-denominated contracts by companies.

James Faleke, Chairman, House Committee on Finance and Victor Nwokolo, Chairman, House Committee on Banking and Currency led members to commence the investigation on Monday in Abuja.

Mr Falake said that the committee would also investigate foreign exchange allocation to companies from sources such as the Central Bank of Nigeria, CBN, autonomous, interbank domiciliary and over the counter purchase.

The purchases, according to Mr Falake, are for the importation and payment of foreign services vendors, dividend repatriation, foreign loans and interest payments.

“We are all akin to Nigeria’s recurring and growing fiscal deficit, and that to sufficiently finance the Federation’s annual fiscal expenditures, the government is left with no choice but to borrow billions of dollars every year.

“We have also seen the real value of the Naira to the US Dollar drop drastically, the dire consequences of which the Nigerian people are experiencing today,” he stated.

This, he added, was in spite of the enormous inflows of capital importation and foreign direct investment over the years in numbers that one would expect to translate into revenue generation for the country.

Mr Faleke queried the skyrocketing amounts of foreign direct investments and capital importations not reflecting in the economic progress of the country.

He stated that it was for this reason that the House of Representatives through its Joint Committees of Finance, and Banking and Currency launched the investigation.

The lawmakers, however, expressed dissatisfaction with the billions lost to tax evasion and diversion of foreign exchange allocations annually.

The appearance before the investigative hearing was relevant financial institutions to explain their role in the alleged malfeasance of 30 billion dollars revenue leakages.

The lawmaker accused Citibank of withholding tax on Value Added Tax (TAX) aggregating to five billion dollars and other foreign exchange revenue leakages of N93 billion were not remitted by Citibank.

Ngozi Omoke-Enyi, Citi Bank Director of Operation while appearing before the committee said that the bank was guided by foreign exchange monitoring and miscellaneous provision act.

She said that the CBN from time to time issued guideline to regulate transactions on foreign exchange, adding that Citibank was not in contravention any of the guideline in the act in the foreign exchange manual.

Another bank that appeared before the committee was Fidelity to explain its role while more financial entities are expected to appear before the joint committee rounds off the investigation.