The Joint Committee on Finance, Banking, and Currency of the House of Representatives has launched an investigation to unearth the causes of the perennial revenue leakages estimated to be worth around $30 billion annually, arising majorly from payments on account of foreign currency-denominated contracts by companies.
This was disclosed by the Chairman of the House Committee on Finance and Rep, Hon. James Faleke, and the Chairman of the House Committee on Banking and Currency, Hon. Victor Nwokolo, when they led their team members to commence investigations today in Abuja.
According to Hon. Falake, 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.
Commenting on this, Faleke said: “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.
In addition, he queried the skyrocketing amounts of foreign direct investments and capital importations not reflecting in the economic progress of the country. In his view, this was the major reason why the House of Representatives through its Joint Committees of Finance, Banking and Currency decided to investigate the anomaly.
Recall that Nigerian lawmakers have constantly expressed their dissatisfaction over the perennial revenue leakage experienced in the country, especially with the loss of billions in tax evasion and diversion of foreign exchange allocations annually. Therefore, the recent move is a bold step taken by the legislators to first unravel the causes and subsequently recommend policy measures to correct the anomaly.
Analysts who spoke with naijabusiness.com.ng commended the house for the recent move. Experts believe that this is a first step in aligning the enormous inflows of capital importation and foreign direct investment with revenue generation in the country.
On the other hand, naijabusiness.com.ng learnt that representatives of two banks operating in Nigeria appeared before the house to clarify some alleged financial abuse levied against the institution. One of the affected institutions (Citibank) was accused of withholding tax on Value Added Tax (TAX) aggregating to five billion dollars and other foreign exchange revenue leakages of N93 billion which were not remitted by Citibank.
In response to these weighty claims, Citi Bank Director of Operation, Mrs Ngozi Omoke-Enyi while appearing before the committee said that the bank was guided by foreign exchange monitoring and miscellaneous provision act.
She explained 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.