What a pity and something for everyone to learn from: Francis Atuche is going to jail! An Ikeja court (Lagos) sentenced him to six years imprisonment for defrauding the bank the sum of N25.7 billion.The ex-Managing Director of Bank PHB (now part of Keystone Bank) was an ace operator who fell to his demons. Yet, sending a man to jail for destroying the lives of many does not offer full justice, Nigeria needs to work harder to prevent these crimes. I drive around America and see mechanic shops which are 50 years old and counting, run by human beings. 

“By stealing from the bank, they stole from innocent customers of the bank.

I hereby make an order of restitution against the first and third defendants to refund the sums stated in counts one to 11, 14 and 24.

The sums are to be paid to the relevant agencies that recovered the funds on behalf of the bank.

The first defendant is hereby sentenced to six years imprisonment on counts one to 11, 14 to 20, 23 and 24,” Okunnu said.

The third defendant is hereby sentenced to four years imprisonment on counts one to 11, 14 to 20, 23 and 24,” she held.

The judge, however, held that the sentences would run concurrently.

“It was a well-planned, well-executed scheme but the bubble burst when the Central Bank of Nigeria (CBN) intervened,” she said.

She revealed that both men stole from the bank using well-recognised stockbrokers to transfer money belonging to the bank under the guise of loans and shares.

Meanwhile, Atuche begged the judge not to send him to jail, pleading for mercy he said, “All the time I was the MD of Bank PHB, I gave my all to the bank.

Never at any material time did it occur to me that I would set up a scheme to defraud the bank.

I plead for mercy, leniency, your kindness, and I plead that out of your kindness and generosity, you will not allow me to go to jail. I am sorry and remorseful,” Justice Okunnu.

Yet, we cannot keep a banking institution up and running for two decades. I do think we need to make the Whistleblower regulations stronger so that junior workers can be bold to report these things to law enforcement. Convicting 2-3 people for stealing N25.7 billion sounds good but the biggest shame is that hundreds of workers who saw the sleaze did not have the tools to have reported to stop it. 

Nigeria must invest in prevention rather than just prosecution, and I am calling EFCC to open a Department of Financial Crime Prevention. There are some fundamental things we can do in Nigeria to reduce these crimes. It needs to understand that convicting these men offers marginal value; the biggest victory is preventing these crimes! Time for that playbook! This video explains.

Members, remember Tekedia Live today with our Design Thinking and Innovation Faculty Aderinola Oloruntoye.  Zoom link in the Board.

Thur, Jun 17 | 7pm-8pm WAT | Design Thinking – Aderinola Oloruntoye

Meanwhile, we will end admission into the 5th edition of Tekedia Mini-MBA on Sunday, June 20th. So, if you want to join, you have till Sunday. Interested? BEGIN here.

“The way the exchange rate was managed limited access to FX and thus adversely affected investor confidence and investment appetite,” the World Bank.

The Central Bank of Nigeria (CBN) ran a really brilliant, in my opinion, exchange rate playbook just before 2016. The apex bank kept the exchange rate  around N197/$ for years after it moved from around N157/$. They created and deployed tools, using the basic economic framework: if you improve supply, keeping demand constant, price will fall. But here, at least, the price will stay constant. Magically, businesses were not worrying over exchange rate as they curtailed the movement within an optimal equilibrium point.

But starting in 2016, the apex lost its mission. It began a season of rascality and that old nuanced movement vanished. They discarded what was actually working, and many bad things started happening. Of course, many would blame the fall of crude oil and the mild recession. Nonsense. For you to know that it has nothing to do with crude, put the graph of crude oil and the exchange rate volatility in Nigeria, you will see that the correlation is not strong since 2016. If the correlation is strong, at least, since the oil price stabilized by being perpetually down, it ought to have stopped crashing.

For a long time, Nigerian naira has been under the fearful trio of massive speculation, fear of devaluation and high demand. Add the economic apocalypse of three exchange rates depending on your status in the society – official rate, IEFX (I&E Foreign Exchange Window) and the black market rate – you see confusion.

So, it is not a surprise that the World Bank is blaming CBN for the current forex crisis. The World Bank thinks that CBN mismanaged the foreign exchange regime and that mistake is what we are paying for in the fall of Naira against major global currencies: “According to the World Bank, the central bank’s management of the exchange rate reduced supply in the market thus affecting investor confidence and ultimately leading to a ditch of the official market for the black market.” That is very blunt and I do hope the CBN pays attention.

Sure, we are not saying that the World Bank is a high priest which knows it all. But one thing I know is this: the current state of the Naira is not giving many people confidence to ship money from the US to Nigeria. People want stability in a currency before they can buy stocks, treasury, etc so that when you exit and have to return the funds back to America, your hands would not be burnt.

“In May 2021, the CBN formally took concrete steps towards rates unification between the official and IEFX rates. However, the IEFX rate continues to be managed and is not fully reflective of market forces. Furthermore, there remains a 20 percent premium between this unified rate and the parallel market rate. The two-month naira-for-dollars scheme introduced by the CBN in March 2021 to serve as an incentive for increased remittance inflows through formal channels was extended indefinitely in May and was preceded by regulatory directives in December 2020—that mandated all licensed operators to pay remittances in dollars. While this may indeed encourage the use of the formal channels, it is not clear that incentive payments will increase remittances to the country,”

“While the CBN has taken steps towards operationalizing unification of exchange rates, greater flexibility will be necessary to support the recovery. Until oil companies are allowed to sell FX receipts to IEFX bank participants, CBN would still have an important role to play as supplier of FX. In this scenario, participating banks in the FX market will start to play an expanded role that goes beyond just executing buy/sell orders of its clients to start acting as market makers, meaning that they start to quote two-way prices buying and selling on its own behalf and carrying a stock of FX.

With increased flexibility, the CBN could start intervening only to smooth large fluctuations and work toward ensuring a single, market-driven rate. Keeping market stakeholders fully informed of such efforts would help attract both domestic and foreign investment. The right mix of exchange-rate flexibility and expanded supply (e.g., through banks and FX agents) would enable the FX market to efficiently allocate resources, which would allow the CBN to focus its interventions on smoothing large and disruptive FX fluctuations.”

People, this is evident: if confidence is low on your currency, speculation rises and bad things happen. What brings low confidence? That is what the World Bank refused to touch in that report! I expect CBN and the government to search their economic hearts!

Meanwhile, World Bank has revealed that inflation has pushed about seven million Nigerians below the poverty line in 2020 alone: “According to the report, the rise in inflationary pressure has been driven primarily by surging food prices, as Nigeria’s rate of inflation rose steadily throughout 2020 and reached a four-year high in March 2021.” That is something the government needs to fix.

We are now learning some of the reasons why the Central Bank of Nigeria (CBN) banned the use of cryptocurrency in the Nigerian banking ecosystems. It turns out that criminals were using the digital currency to perpetuate their frauds.

According to the Executive Chairman of the Economic and Financial Crimes Commission (EFCC), Abdulrasheed Bawa, the commission has recovered about $20 million worth of cryptocurrency loot from cybercriminals: “We have seen time and time again where cybercriminals are using this avenue to get their proceeds of crime. Before it used to be through money transfer agencies like Money Gram and of course Western Union. Now they have gone E. They will defraud somebody. They will get gift cards, exchange them on the dark web, and they will use the proceeds to buy crypto, and they can get it to their e-wallet, and then, of course, they can sell and get their money.” EFCC has also created a crypto e-wallet to store the assets.

The EFCC boss expressed his support for the Central Bank of Nigeria (CBN)’s ban on cryptocurrency transactions, saying that it has helped to limit the avenues through which these criminals launder their proceeds of crimes in the country.

Bawa said, “As it is today, there is nowhere in the world where cryptocurrency is being regulated. The EFCC is looking at an avenue in which people are laundering and receiving proceeds of crime and that is our worry.

[…]

As it is today, we have about 20 million dollars worth of cryptocurrency as of last statistics that I have because we also created our own e-wallet to recover cryptocurrency, you know it has never happened before but we created it. We are now recovering these proceeds of crime from that means as well.

So, we are in support of what the CBN has done because it has limited the ways in which some of these criminals can exchange their crypto and get naira for it.”

Yet, the nation does not need to ban crypto. It simply has to find a mechanism to police and regulate the use of cryptocurrency.

If you don’t like where you are, move; you are not a tree.

The Serengeti, located in East Africa, holds a phenomenal event every year. It’s the Great Wildebeest Migration. This is the movement of vast numbers of the Serengeti’s wildebeest accompanied by large numbers of zebra and smaller numbers of gazelle, eland and impala.

Trailing the rain and its provisions of fresh grazing, better quality water and opportunity for procreation, the herds must cross two great and dangerous rivers on their paths from the hinterland of Tanzania to the Masai Mara in the southern fringes of Kenya and back to where they set off.

The Mara and the Grumeti rivers are notoriously populated by large crocodiles that feast on these herds as they cross their territories. Across the great rivers are survival, abundance, and safety. There is no middle ground, the herds must brace up and cross the rivers or perish!

And so it is with man in the pursuit of better opportunities, he must migrate, and in his course, must cross his rivers in perpetuity. The herds in the Serengeti have been traversing this route for thousands of years in the same manner as their forebears, facing the same perils year after year. If only they could think beyond their natural limits, maybe they could build a bridge over the Mara and the Grumeti and never again be eaten by the crocs.

It is a good thing we are higher creatures that can acquire capabilities that expand our capacities to go beyond chasing to creating opportunities. To capture and create these opportunities, we must first plan our paths to the destination identifying the rivers we must cross. Your river could be your job that has boxed you into the rat race. It could be your environment with unequal opportunities created by inept political leadership. Is it the small scale you have operated your business on without access to the knowledge to become a category king firm? Is your river your mindset that you can’t think outside the box to achieve your potential? Your river could also be your current social network, relationship, and perspective.

Around these rivers, you would want to “invent, innovate and drive organizational transformation and growth. Capture emerging opportunities in changing markets while optimizing innovation and profitability. Digitally evolve your business or functional area, turning digital interruptions into competitive capability and advantage. Master the concept of building category king companies and thrive.”

Did I hear you say let’s do this? Then, welcome to Tekedia Institute where they run an amazing business school which has attracted professionals and students from 38 countries. Faculty members come from Microsoft, Shell, Flutterwave, Nigerian Breweries, Jobberman, Coca Cola, and other great organizations. Thrice weekly, Prof Ndubuisi Ekekwe, the Lead Faculty, personally coordinates Zoom live sessions on the mechanics of business systems. Faculties and guests are brought together on sessions covering industries and business domains.

Register today to join the Great Tekedia Migration and cross your rivers to better opportunities with Tekedia Mini-MBA Edition 5.