When Will the CBN Come for Your Account?

By Chuks Emele

Is your money really safe in your bank account? Or will the Central Bank of Nigeria come swooping in overnight, locking you out of your accounts overnight, leaving you high and dry?

These are the questions agitating the minds of many a bank customer in Nigeria after the accounts of 20 people were frozen on the orders of the central bank, apparently, for their alleged involvement in the recent protests that swept the country against police brutality and bad governance. 

In court papers, the central bank’s lawyer actually said the accounts are being investigated under a law that prohibits financing of terrorism. It’s a claim many see as far-fetched but one which the Godwin Emefiele-led CBN, in its desperate eagerness to be servile to the presidency, was ready to make.

At the height of the initially peaceful protests, sparked by a police extrajudicial killing caught on a video that went viral, the protesters were able to demonstrate that governance could be effective, something of which there aren’t many examples of in their country. They organized crowd funding to which contributions came from Nigerians all over the world, which they used to buy food, water and provide phone charging points for those who camped round-the-clock at key protest sites in Lagos. Money received was often dispensed via transfers into the accounts of people tasked with providing any of the services needed at the protest sites. Many who received such funds are now subject to terrorism financing investigations, if the central bank is to be believed. 

Talk of giving a dog a bad name in order to hang it. But beyond that, the implication is that one should be aware that there are risks involved in receiving money into your account for whatever purpose, even the seemingly innocuous. It could earn you an account freeze or probe for terror financing.

A crowd of Nigerian protesters.

Of course, banks weren’t set up to aid criminals and should be accountable to authorities that licensed them in the public interest. The law gives due cognizance to this, and to ensure it’s judiciously applied, places a requirement on the regulatory authorities to first obtain a court order to that effect. 

The CBN didn’t do so. It closed the accounts before finding a reason for the action, including investigation of terrorism financing, which must ring absurd to any keen observer of events in Nigeria in recent months. 

Of course, critical voices, expectedly, have expressed concern about the awkwardness of law enforcement engagements by the central bank.

The “CBN is not a crime investigation department and constitutionally cannot investigate crime,” Muiz Banire, a former chairman of the Asset Management Company of Nigeria, declared recently on Twitter in one of the most salient criticisms. “The Bank is the examiner of commercial bank accounts and not individual’s accounts. The Bank remains in recent times a meddlesome interloper in affairs that do not concern it.”

What it reveals is a readiness of the central bank to bend to the authoritarian whims of the government in power even in violation of the law and the constitution. In other words, the central bank is acting in a politically motivated manner, that aligns it too closely to Aso Rock and undermines its independence.  It may have secured Emefiele a second term,  but it’s not leaving your money and investments any more secure. You can be locked out of your own accounts unceremoniously.

Yet, among the fundamental provisions of Nigeria’s current constitution are protections for freedom of speech, freedom of movement and freedom of association. Witnesses across the country saw thugs protected by police attacking peaceful protesters, in a deliberate attempt to spark chaos and create the pretext for law-enforcement intervention. One is yet to hear about Emefiele moving against those that shared money to those thugs.

That’s why the suit filed by an affected company challenging the “unilateral ” closing of its bank account is a test case that will determine how far the CBN and the banks can go in separating customers from their money.

It’s not that the courts haven’t spoken before. In 2017 another company, Blaid Construction mounted a legal challenge against the freezing of its accounts by Access Bank on the orders of  the Independent Corrupt Practices and Other Related Offences Commission. The court determined at the time that the action was illegal without an order by a judge or magistrate.

This time around, the CBN acted first and froze the accounts from Oct. 15 before thinking, and  remembering more than 10 days later, that it needed a court order. That’s probably why it told the terrorism tale to convince the court that something terrible was going on. The courts should tell us whether such sloppy afterthoughts are acceptable from a regulator of the CBN’s standing.