Senate summons Emefiele over exchange rates for infrastructure projects

CBN Governor, Godwin Emefiele used to illustrate the story.
CBN Governor, Godwin Emefiele used to illustrate the story.

The Senate Committee on Finance has summoned the Governor of Central Bank of Nigeria, Godwin Emefiele, to appear before it on Monday.

The Chairman of the Senate Committee on Finance, Solomon Adeola, made this known via a statement on Sunday by his Special Adviser on Media, Kayode Odunaro.

Mr Emefiele has been summoned to give detailed explanations on the rationale behind the exchange rates the CBN used for three key projects under the Presidential Infrastructure Development Fund (PIDF).

The projects are being funded by the Nigeria Sovereign Investment Authority (NSIA).

The PIDF was earmarked from dollar-denominated Sovereign Wealth Fund to partly fund the Lagos-Ibadan Expressway, Second Niger Bridge, Abuja-Kano Expressway, East-West Road and Mambilla Hydro Project.

The first three projects had already been funded to the tune of N163.8 billion, the statement said.

According to the statement, Mr Adeola demanded the appearance of the CBN governor during an interactive session between the panel and the Managing Director of NSIA, Uche Orji.

The statement explained that Mr Orji and his management team had told the committee that the contracts for the projects were denominated in naira and that the CBN exchange rate for the disbursed fund was N325 to a dollar instead of the official rate of N305.

Mr Orji stated that the NSIA, since operations in third quarter of 2013 with seed money of $1 billion, has invested in critical sectors like healthcare, presidential fertilizer initiative, education, real estate, international financial instruments.

He said in 2018 the federal government injected $650 million for the PIDF from which N163.8 billion has so far been disbursed for the three projects from the approved N672.4 billion earmarked.

The committee chairman demanded to see the contract documents for the projects and why the exchange rate for the dollar to naira was at N325 to a dollar instead of the official rate of N305 in a government to government transaction for these key infrastructure projects.

“We are not indicting the NSIA or conducting an investigation or probe of the CBN but we like to know the reason this different rate was used but we are inviting the CBN to appear together with the NSIA on Monday,” Mr Adeola said.

While the lawmaker commended the NSIA for what it has done so far in terms of funding healthcare, education, infrastructure and investment in fertiliser production, he, however, called for caution in disbursement.

This is even as he sought more investment in diverse areas to grow the $1.5bn Sovereign Wealth for its contributors like the federal government, state governments, local governments and the FCT to reap the benefits of its establishment.

Another senator, Ayo Akinyelure, while supporting the need for clarifications from the CBN on the exchange rates in the affected transactions, said that the NSIA might have been shortchanged in the transactions.

He also said the rates may explain the seeming slow progress, delay and non completion of these key projects as some aspects will be based on import of materials which are denominated in dollars purchased at higher rates.

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