About 2 million accounts were believed to have been opened in Nigeria, most of it, in the city of Kano between last July and December in a sophisticated effort to withdraw billions of Naira out of Nigeria, revealed a top banker in Abuja.
It is believed that ongoing investigations reveal that politicians and businessmen opened the accounts in different banks, made deposits of large sums of money in Naira, and had their cronies in major global cities to use debit Cards to draw heavily from the accounts.
The reported frenzied banking transactions across nations is being read by banking sources within Nigeria as a means of laundering money without linking the process to the politicians. This alarming development is believed to be a reaction to an expected financial clampdown by the government of President Muhammadu Buhari.
For the politicians to successfully execute this they mobilized willing businessmen who opened the multiple slush accounts and supervised the offshore withdrawals. The businessmen involved in this focused principally in making profits while the politicians were more concerned with as much volume offshore transfers as are possible.
One beneficiary of this practice said, he used to raise between 100 to 200 million Naira, would split and deposit the money in numerous accounts and withdraw all the amount in Dubai, UAE or China in the official bank rates provided by their Nigerian banks. This normally provides ample foreign exchange for him to sell in the black market.
This revelation possibly explains the sense in a recent arrest made at the Murtala Mohammed International Airport, Lagos some months ago of an individual who was carrying about 108 pieces of debit cards and another in Kano airport with 870 cards. The bulk of people doing this money laundering, however, is small time account holders, in their thousands, but cumulatively attracts millions of dollars in liabilities for the Central Bank of Nigeria.
Many of the big business men remain in Nigeria and send their wards abroad to withdraw daily deposits both in Automated Teller Machines and POS from shops that offer them cash on the pretext they are buying goods. “We don’t buy any commodities, we hand our cards and we get cash instead, while the shop owners take 4 to 5 percent. Even at that, we make gains because the demand for forex at the Nigerian black market is high” says a small time money launderer travelling to Dubai.
A bank manager, whose bank alone recorded over 150,000 of such accounts in 3 months or there about said, “we are in trouble with issuers, the issuers charge periodically for each card issued per transaction, since the settlement is not instantaneously done, the banks are left with millions to settle the issuer’s, but the accounts are left empty with nothing for the banks to debit at the end of the day.”
This sharp practice led to a prohibition on the use of Debit Cards and Visa cards outside Nigeria by the CBN, but many of the people that spoke to this reporter said, the blame should not only be on some of these politicians and businessmen “the irony is, the banks knew what the cards were meant for and many bankers are involved,” said Musa Muhammad, a tourist in Dubai.
Sadly, those at the receiving end of this forex restrictions are mostly students and small time legitimate enterprises. Only yesterday, the CBN governor, Godwin Emefiele announced immediate suspension of sale of foreign exchange to Bureau d’Change operators. He also announced the lifting of restrictions on foreign exchange deposits in banks.