The petition addressed to the Chairmen Senate Committees on Gas, Petroleum Upstream and Downstream, dated February 6, 2024, was signed by CGGN's President, Mr. E.C Madaki.
A civic organisation, the Campaign for Good Governance in Nigeria (CGGN), has petitioned the Senate over what it described as the fraudulent activity within the strategic intervention in the foreign exchange market masterminded by Minister of Budget and Economic Planning, Abubakar Bagudu.
The petition addressed to the Chairmen Senate Committees on Gas, Petroleum Upstream and Downstream, dated February 6, 2024, was signed by CGGN's President, Mr. E.C Madaki.
In the petition titled: "Petition Regarding Fraudulent Activity In The Strategic Intervention Of The Foreign Exchange Market Led By The Minister Of Budget And Economic Planning," the group alleged that the Minister's fraudulent act is set to be code named "PROJECT TANGO".
According to the petitioner, the minister aims to unlawfully enrich himself and a select group of individuals within the Nigerian National Petroleum Company Limited (NNPCL) through this fraudulent scheme. "To execute this illicit transaction, the NNPC has already established accounts in Polaris Bank and Wema Bank.
"To support our claims, we have included pertinent documents related to this illegal transaction along with this petition. We urge the Petroleum Committees of the Senate to thoroughly Investigate these documents.
"It is crucial to note that the funds used for this transaction are being diverted from the NNPCL's accounts and allocated to associates in the Bureau De Change (BDC) Industry.
"The proposal put forth by the Minister of Budget and Economic Planning is misleading to President Bola Ahmed Tinubu and is highly fraudulent in nature," the petition partly read.
The group, however, requested that the Senate undertake a comprehensive investigation of the petition, adding that the actions of the minister amounts to economic sabotage.
Meanwhile, in a letter to the president with Ref: HMBEP/SHC/VOL1/2 dated 12th October, 2023, titled: "Re: Strategic intervention in the Foreign Exchange Market," the Minister said the current situation in the foreign exchange market was inimical to national economic security.
According to him, the spread between the official and parallel rates has widened and as at the date of this memorandum, stands in excess of 25%.
This situation, he told the president "is suggestive of a speculative, bubble, common in illiquid markets, which the parallel market has become."
He added, "Our review indicates the causes are not limited to:
"The size of the parallel market, which currently exceeds the official market as a direct result of the now discontinued multiple rate policy that was the norm for over seven years;
"Unmet demand from the official market spills into the parallel;
"Diaspora remittances continue to be settled outside the official market by-passing our-Banking systems;
"Leverage provided by our Banks to fund dollar trades, deliberately shorting the naira, coupled with a proliferation of Fintech apps has rendered price setting, arbitrary;
"Perception of low reserves and backlog of unmet forwards; Speculators and well-funded beneficiaries of previous policies acting against a stable naira."
The letter partly read: "Your Excellency may recall being briefed on a proposed Project Tango, which has been reviewed and is hereby proposed for consideration. It is an initiative providing strategic Intervention in the parallel market, with the primary aim of reducing divergence. The initial aim shall be to stop the current trajectory of persistent naira decline, to be followed by a process to reset the value to towards convergence. The precise mechanics are in the manner discussed in our meeting earlier today.
"Based on market analytics this proposed intervention should, with supportive policies attain convergence to within 5% over a twenty-week period. This could be attained faster with additional funding but sustainability is critical, thus the twenty-week window is preferred.
"Convergence will provide a significant boost to the macroeconomic framework, stabilise inflation and enhance inflows currently deterred by the perceived market imbalances.
"Furthermore, it shall enhance budget performance for all tiers of the Federation, Federal, States and Local Governments as well as benefiting the polity.
"In addition to Project Tango, I have identified other potential sources of liquidity including the Conditional Cash Transfers of US$800M and the reimbursement of US$161.3M under the NO-CARES project. Such funds will serve as an essential contingency/in the event of a speculative attack or unexpected market conditions.
"Your Excellency is invited to note that there is no fiscal cost to the initiative.
"Your Excellency, the Tango team is led by experienced professionals with track records of attainment at National level and I therefore have pleasure in recommending the project."