CBN Clears $7 Billion Forex Backlog, Boosts Nigeria’s Economic Stability, Signalling Economic Renewal
The Central Bank of Nigeria (CBN) has achieved a significant milestone by clearing the valid foreign exchange backlog, as announced by Mrs. Hakama Sidi Ali, the Bank’s Acting Director of Corporate Communications. This accomplishment, stemming from CBN Governor Mr. Olayemi Cardoso’s promise to address a $7 billion backlog, underscores the bank’s commitment to stabilising the national economy.
In a recent development, the CBN has finalized payments totaling $1.5 billion, effectively settling the remaining portions of the FX backlog. This action not only demonstrates the bank’s dedication to economic stability but also highlights the meticulous verification process employed.
Deloitte Consulting’s independent auditors were engaged to scrutinize these transactions closely, ensuring that only legitimate claims were settled. Any questionable transactions were promptly referred to the relevant authorities for further investigation.
Furthermore, the CBN reported a substantial increase in Nigeria’s external reserves, rising by $993 million to $34.11 billion as of March 7, 2024, reaching an eight-month high. This surge was attributed to increased remittance payments from Nigerians abroad and heightened interest from foreign investors in local assets, including government debt securities.
CBN Governor Yemi Cardoso revealed in February that approximately $2.4 billion of the foreign exchange backlog was not valid for settlement. Following a forensic audit by Deloitte Management Consultant, it was discovered that these liabilities included various infractions such as non-existent entities and unauthorized FX allocations, rendering them invalid.
Despite these successes, questions remain regarding the handling of the forex backlog, with critics questioning the validity of the settlements and the effectiveness of the verification process. However, the CBN’s recent efforts have shown positive results, with parallel market operators quoting a buy price of N1400/$1 for holders of dollars looking to sell, indicating a significant strengthening of the naira.
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