The Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, has said that about $2.4 billion foreign exchange backlog is not valid for settlement.
In an exclusive interview with Arise Television on Monday, Cardoso clarified that out of the initially reported $7 billion FX liabilities of the federal government, about $2.4 billion were identified as invalid following a forensic audit by Deloitte Management Consultant.
The audit’s findings showed various infractions, including non-existent entities and unauthorized FX allocations, making these liabilities invalid.
Cardoso said:
- “We contracted Deloitte Management Consultant to do a forensic of all these obligations and to tell us what was valid and what was not. Of course, we were committed to ensuring that we would pay all valid transactions.
- “The result that came out of this was startling in a great respect; it was quite startling. We discovered that of the roughly $7 billion, about $2.4 had issues, which we believed had no business being there – and the infractions from that range from so many things. For example, not having valid import documents and in some cases, even entities that did not exist and in some cases, beneficiaries and account parties that asked for FX and got more than they asked for. And those who didn’t even ask for any and got. So, there was a whole load of infractions there, which I said amounted to about $2.4 billion out of the $7 billion headline figure.”
$2.2 billion remaining
He also said that the CBN has already settled legitimate FX requests totalling $2.3 billion, leaving an outstanding obligation of approximately $2.2 billion. The governor emphasized the bank’s determination only to honour validly constituted FX requests and to address the outstanding liabilities promptly.
The CBN governor said,
- “We are not paying if you don’t qualify; they are not validly constituted requests. And of the validly constituted ones, we have settled about $2.3 billion and that applies to the airlines and a whole load of different entities spread throughout our economy – we’ve settled that already.
“And now what remains is about $2.2 billion to be settled and I am confident that we will shortly be addressing those and be able to move on and make progress. - “Now, how are we dealing with those that are not valid? As they were identified, we wrote to the authorized dealers to come in and explain what the situation was and where the numbers differed. And sadly, quite frankly, I think much of those have not been disputed to our satisfaction.”
Cardoso further said that the balance would be cleared very shortly.
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Cardoso also addressed misconceptions about the CBN’s role in economic interventions. He affirmed the necessity of such actions, especially during crises, but stressed the importance of executing them thoughtfully to avoid destabilizing the economy.
He noted that excessive liquidity injections had contributed to current economic distortions, including inflation. The CBN’s economic interventions, amounting to roughly 25% of the N40 trillion loans and advances, were flagged for contributing to these imbalances.
The governor also highlighted the need for the CBN to refocus on its primary objectives, such as controlling inflation and stabilizing prices, rather than direct interventions in the economy.
This shift in focus aims to establish a more stable economic environment. Cardoso reassured that the CBN would collaborate with capable partners for future interventions, ensuring they are managed effectively and achieve desired outcomes.
In dispelling rumours, Cardoso denied any plans by the federal government to convert domiciliary accounts into naira accounts as part of currency stabilization efforts.
He reiterated the CBN’s commitment to resolving the outstanding FX obligations and ensuring economic stability.