Law enforcement agencies are currently investigating a series of invalid foreign exchange transactions valued at $2.4 billion, according to Yemi Cardoso, the Governor of the Central Bank of Nigeria (CBN).
This announcement came to light during the press briefing that followed the 294th session of the Monetary Policy Committee (MPC) in Abuja on Tuesday.
Some transactions were illegal
The investigation targets a slew of transactions that failed to meet the regulatory criteria set by the CBN for foreign exchange allocations.
Cardoso detailed several anomalies, including the allocation of millions of dollars in FX to requests that were never made, and allocations provided without the corresponding naira support. He pointed out the lack of legality and satisfactory documentation in these transactions.
Cardoso underscored the serious nature of these irregularities, describing many of the transactions under scrutiny as “outright illegal.”
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He said:
- “We determine that a number of these transactions did not qualify. In some cases, we have some allocations made in millions of dollars, which were never requested for; we also had somewhere they had no naira and they were also allocated some foreign exchange.
- “It was for that reason that we refused to validate those particular transactions. Apart from the fact that documentation was not satisfactory, in many cases, they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid.”
While the investigation is underway, the CBN Governor also noted the bank’s awareness of stakeholders potentially impacted by backlogs. He emphasized efforts made by the CBN to maintain an open, transparent, and liquid market, encouraging stakeholders to utilize available markets to manage their backlogs.
More Insights
- The CBN recently announced the complete clearance of the valid foreign exchange backlog with fresh payments amounting to $1.5 billion.
- Cardoso, in February, disclosed that about $2.4 billion foreign exchange backlog is not valid for settlement.
- 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.
