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Local firms protest state tactics in central bank probe

Raid on Dangote Group and other companies raises 'governance questions' says manufacturers' group

The ballooning investigation into illegal foreign exchange transactions at the Central Bank of Nigeria under suspended governor Godwin Emefiele is rattling local firms who argue that some of the arbitrary methods used could deter legitimate investors. The Economic and Financial Crimes Commission (EFCC) has raided several big companies in Lagos, the commercial capital, prompting headlines about 'crackdowns' in the local media (AC Vol 64 No 12, When – not if – Emefiele leaves the bank).

Lambasting the agency's tactics, the Manufacturers' Association of Nigeria (MAN) condemned the 'Gestapo-style invasion' of the Dangote Group's offices on 4 January. The EFCC has raided other offices in Lagos including those of Dangote Group rival, BUA Group owned by Abdul Samad Rabiu.

'The news has gone around the world and many, including would-be investors, would be taken aback,' the manufacturers' lobby said. 'This may not be the best way to show that Nigeria is committed to good corporate governance.'

Officials at Dangote Group, chaired by Africa's wealthiest man Aliko Dangote, were also angered by the raid, insisting that there are '…no accusations of wrongdoing' against it. It added that the tactics used by the EFCC seemed '…designed to cause unwarranted embarrassment'.

The raid on Dangote Group came just as the company's oil refinery division was preparing to start full operations. It had taken delivery of its first consignments of crude oil from the state-owned Nigeria National Petroleum Corporation (NNPC) early in the new year. Dangote was planning to list the US$20 billion refinery as a separate company on the Nigeria Stock Exchange (NSE) where it would have easily been the biggest single quoted company.

The raid has reinforced concerns, widely punted on Nigeria's social media, about a rift between President Bola Ahmed Tinubu and Dangote. Neither side has commented. The first signs of friction were seen in May 2023 when Tinubu, then president-elect, declined to attend the official opening of the Dangote refinery, Africa's biggest industrial project, alongside outgoing President Muhammadu Buhari and sundry other Nigerian and other regional dignitaries.

Tinubu's absence from the opening ceremony was doubly remarkable given the refinery is in Lagos and will be the state's biggest economic project and job creator by far. The successful operation of the Dangote refinery should replace most of the gasoline (over 400,000 barrels a day) and diesel that Nigeria currently imports because its state-owned refineries aren't operating efficiently.

Business consultants in Lagos say there is also a political dimension to the central bank probe. Emefiele, the central target of the investigation, was a rival contender for the ruling party's presidential nomination competing against Tinubu in the first stages of the campaign in 2022.

Still governor of the central campaign at the time, Emefiele has launched his presidential campaign with some fanfare, dozens of vehicles were photographed bearing the legend 'Emefiele 2023' (AC Vol 63 No 3, Bankers circle the presidency).

Aides of Emefiele's at the central bank were briefing journalists, suggesting that the bank governor had high-level endorsement with the government and the ruling All Progressives' Congress (APC).

As tensions mounted over the number of serving office holders who were vying for elective office, President Buhari gave the contenders an ultimatum: either drop the political ambitions or quit and run the campaigns outside government employment (AC Vol 63 No 11, President Buhari's edict shakes up presidential race).

Emefiele chose to abandon his presidential campaign and stay on as governor of the central bank in mid-2022. But his decision to order new currency notes later in the year in the run-up to the national elections in February 2023 riled Tinubu.

The ostensible aim of the currency changeover was to cut the circulation of laundered money and fake currency notes to tilt the outcome of the elections. Politicians of all stripes were making cash payments to registered voters but Tinubu's campaign team saw Emefiele targeting their operations.

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