Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, has said about $2.4 billion foreign exchange backlog is not valid for settlement.
Cardoso in an interview on Arise Television on Monday, explained that out of the initially reported $7 billion forex liabilities of the federal government, about $2.4 billion were identified as invalid following a forensic audit by Deloitte Management Consultant.
According to him, the findings of the audit showed various infractions, including non-existent entities and unauthorised forex allocations, making these liabilities invalid.
He 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.”
Cardoso said that the CBN has already settled legitimate forex requests totalling $2.3 billion, leaving an outstanding obligation of approximately $2.2 billion. He reiterated the bank’s determination to only honour validly constituted forex requests and to address the outstanding liabilities promptly.
He 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.”
He assured that the balance would be cleared very shortly.
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 per cent of the N40 trillion loans and advances, were flagged for contributing to these imbalances.
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