CBN Discovers False 2.4 billion FX Backlog

Confidence UbaniFebruary 5, 20241 Mins read713

In a recent interview with Arise Television, Central Bank of Nigeria (CBN) Governor Olayemi Cardoso disclosed that 2.4 billion of the $7 billion foreign exchange backlog owed to banks, aviation and other entities is not valid.

This invalid $2.4 billion in foreign overdue claims, according to him, has been exacerbating the pressure on the naira and unsettling the foreign exchange market.

Cardoso revealed that an audit conducted by Deloitte management consultants exposed various questionable dealings. CBN said it hired Deloitte to investigate the $7 billion forex claims to get a clear picture of things.

Deloitte’s report identified $2.4 billion in false claims and cited issues such as the absence of valid import documents and instances of non-existent entities receiving funds.

“The result that came out of this (investigation) was startling in a great respect. It was startling. We discovered that of the roughly $7 billion, about $2.4 billion had issues, which we believe had no business being there and the infractions on that ranged from so many things, for example not having valid import documents and in some cases, entities that do not exist.

“There were account parties who had asked for foreign exchange and got more than they asked for. There were some who didn’t even ask for any and got. So there were whole loads of infractions there,” Cardoso said.

Those making claims of the $2.4 billion would not be compensated, according to CBN.

“As they were identified, we wrote to the authorised dealers to come in and explain what the situation was. Sadly, quite frankly, much of those has not been disputed to our satisfaction”, Cardoso said.

As of now, the apex bank has cleared $2.3 billion out of the valid $4.5 billion FX backlog with just $2.2 billion outstanding. Expressing confidence in resolving the situation promptly, Cardoso stated, “I think we are at the end of this, to put it that way.”