Fresh evidence has emerged to suggest that Chukwuma Soludo, the former Central Bank governor, was being economical with the truth when he denied any knowledge of a multibillion naira contract at the centre of a growing bribery scandal involving the conversion of our currency from plain paper to a durable coated form.
We can report exclusively that the CBN, under Mr. Soludo, played "a pivotal role" in the award of the contract to Securency, an Australian firm now being investigated by its home government for paying bribes to top CBN officials amounting to nearly N1 billion.
When we first published a story of the scandal during the weekend of Oct. 3, Mr. Soludo had pooh-poohed the suggestion that the CBN was directly involved in the contract. He told another newspaper that "there could not have been a contract between the CBN and Securency, because orders for new notes were usually placed by the apex bank through the Nigerian Minting and Security Company." Under the controversial contract, Securency has supplied at least 1.9 billion pieces of the coated paper, called polymer substrate, on which four of Nigeria's bank notes are printed under Mr. Soludo's much-publicised currency reform programme.
Soludo did it
Well-placed sources, some of whom worked in the Soludo CBN, told NEXT in confidence in Abuja last weekend that Mr. Soludo personally directed the contract process. We also were shown documents definitively linking the Soludo CBN to the decision to award the contract.
A senior industry official said the CBN instructed the national mint, which prints our currency and over which Mr. Soludo presided as chairman, to print the N20 bank note on the polymer substrate, having approved the redesigned bank notes in 2006. The instruction was contained in a letter, dated May 2, 2006 and signed by the CBN Director of Currency Operations, Ben Onyido.
"I am pleased to inform you that the management of the CBN has approved the award of contract for the minting of...the redesigned 5, 10, 20 and 50 bank notes under the bank's currency restructuring programme...Please be advised that the 5, 10, and 50 denominators are to be printed in paper while the 20, will be printed in polymer," the letter instructed.
The CBN in 2005 officially took over majority shareholding of the NSPM, with a 77% shareholding. The CBN governor at the time, Mr. Soludo, became the chairman of the board of directors of the Nigerian Mint, as the NSPM is sometimes called.
The NSPM, was no longer a department of a government agency, but rather to be run as a private sector company albeit with the Federal Government as a majority shareholder.
In May 2006, the CBN approved the contract for the award of Nigeria's first set of Polymer notes, as well as the redesigned paper notes. In the running of affairs, especially on currency matters, the CBN allegedly took complete charge of operations.
"For all purposes, the CBN dictates who prints, what quantity and what substrate to print on, what denomination, what price they are going to pay. Even when the notes are printed abroad who is going to print abroad, what quantity, who is going to clear it, who is going to freight, what clearing agent is to be used is determined by the central bank," according to bank sources.
"The mint just provides logistics support," another source added, asking not to be named for security reasons, adding that the CBN Act gives the CBN the authority to manage the nation's currency and that the CBN could have acted on this premise.
To support his claim, a CBN letter, dated May 31, 2006, titled ‘Airlift and Clearing of ...pieces of 5, 10, 20, and 50 denominations of the redesigned banknotes', addressed to the Mint instructed:
"We advise that the underlisted companies handle the airlift and clearing of the above mentioned bank notes as follows:..." The letter named two companies, Tokke Maritime Services Ltd and Kerl dbert Nigeria Ltd, with their corresponding addresses.
The CBN and Securrency
The relationship between the Soludo led CBN and Securrency began even before the CBN took over ownership of the Nigerian Mint. In November 2004, under the instructions of the CBN, the Mint granted Securrency access to its premises to enable them carry out a survey of the facilities in the Nigerian Mint.
"By November 2004, CBN was already in discussions with Securrency. If I'm not discussing with you, I cannot ask you to just come for inspection," our source said questioning Mr. Soludo's claim in the an interview with the leading Nigerian newspaper, that the CBN had no contract with Securrency, who is the world's leading supplier of polymer currency.
"In 2005 June, the Central Bank considered printing the 1000 note in polymer. I understand that there was a letter to that effect at that time. But later, they back tracked, they changed and left everything in paper for logistics reasons or whatever. What that means is that as at then, the Central Bank was already considering printing on polymer," our source added.
Switching from Paper to Polymer
Players in the industry, using as evidence, the reluctance of most industrial nations of the world going the polymer route, questioned the move from paper bank notes to polymer notes. However, in an interview with NEXT, the spokesman of the CBN, Mohammed Abdullahi said that what informed the move was the two year research carried out by the CBN.
"Research in the last two years shows that polymer notes are more durable than the paper notes. In the long run, there is a 50% cut in costs when we use the polymer notes, "Mr. Abdullahi said.
"Those people make some very stupid assertions that they cannot defend. They say the polymer lasts four times as long as the paper and claim that the CBN has done a research and evaluation for two years. You launched it in February 2007, they say the paper note lasts for six months, the NSPM says 9 months . Even if the paper note lasts six months, six months times four is two years, then the polymer should last for twenty four months. Has it been two years since 2007 before they got the approval? The approval was gotten before two years," a consultant in the industry remarked.
He added that the bribery scheme could have taken place only in order to ensure a switch from paper notes to polymer, which is said to be about twice more expensive than the paper notes.
"What I imagine could have happened is the bribery would be at the point where we had to decide whether we are going to go polymer or to go paper. Once you have decided that you are going to buy the material from me, why would you need to bribe me when I'm the sole supplier for the whole world? It could only be to induce me to change from paper to polymer," he added.
Investigations
The CBN speaking through its spokesman says it is not carrying out any investigations on the matter.
"We are not carrying out investigations in the sense that you are calling it. We are only asking questions on what could have happened based on what we read on the pages of the newspapers." Mr. Abdullahi sought to clear any impression that the CBN is working in collaboration with the Australian government. He also claimed that the CBN had not contacted the EFCC, contrasting the claims of the new CBN governor, Lamido Sanusi that he had contacted the EFCC chairman on the bribery matter.
"We have not contacted the EFCC on any matter. If they are doing anything, it is not based on what we told them, maybe it is from the presidency,"he added.
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