The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has revealed that security agencies including the Economic and Financial Crimes Commission are currently investigating questionable foreign exchange allocations and forward contracts previously estimated at $2.4bn.
The development followed the conclusion of the audit of $7bn dollar debts inherited by the Cardoso-led CBN from the previous administration of the apex bank.
The new administration of the apex bank had engaged a global firm, Deloitte, to carry out an audit of the $7bn debts. Cardoso had earlier said about $2.4bn FX allocations from the $7bn backlogs were invalid.
Elaborating further on the issue while speaking with journalists shortly after the 294th meeting of the Monetary Policy Committee in Abuja on Tuesday, the CBN governor disclosed that security agencies were investigating the FX transactions that had been declared invalid by the audit report.
The apex bank, according to him, is providing the necessary documents to help the investigation.
Cardoso said the major achievements were part of the decisive steps towards restoring confidence in Nigeria’s economy.
Similarly, he urged stakeholders to access the foreign exchange market to settle their forex transactions, adding that the bank would always maintain an open, transparent, and liquid market for economic prosperity.
However, the ongoing probe may force operatives of security agencies to invite some bank chiefs as well as the chief executive officers of some banks. It is still unclear how long the investigation will last.
Meanwhile, some members of the organised private sector had opposed the rejection of their forex exchange bids by the central bank.
Some businesses under the aegis of the Organised Private Sector of Nigeria said they were considering taking legal action against some commercial banks for not honouring forex requests which have lingered over an extended period.
Some of the member associations, speaking in separate interviews, faulted the process through which the CBN conducted the settlement of the backlogs. They argued that the process was not transparent, neither was it carried out in the interest of full disclosure.
The threat of litigation came despite a recent stakeholder meeting comprising some members of the OPSN, the affected banks and customers which was convened by the Minister of Industry Trade and Investment at the Bank of Industry in Lagos on March 21, 2024.
The National Vice President of the Nigerian Association of Small Scale Industrialists, Segun Kuti-George, had on Sunday said, “Some of the requests have been cleared, but there are others that they are saying were illegal and did not meet their criteria, but the importers are not aware of the reason why the requests have been rejected. Their monies are still with the bank, and they are groaning.
Also, the National President of the National Association of Chambers of Commerce, Industry, Mines, and Agriculture, Dele Oye, had called on the CBN and the Ministry of Trade and Industry to craft an urgent solution to the unmet forex requests by some members of the OPSN to avert what appears to be a looming legal action on the part of the affected businesses.
According to Oye, several NACCIMA member companies and other private sector operators have challenged the completeness of the forex clearance.
Cardoso reacts
But responding to issues of some stakeholders who have backlogs of forex, Cardoso assured that the market remains open and transparent for them to address any outstanding contractual obligations. However, he said the CBN had diligently verified and settled recognised backlogs of forward transactions.
“We are also not unmindful of the fact that some stakeholders may have had backlogs in one form or the other. We have done what we can to make the market transparent as much as possible. Those involved should patronise the open market,” he said.
On enforcement issues regarding the crypto market, the CBN governor said he was working with various agencies to enforce the law noting however that the Security and Exchange Commission, not the CBN, regulates the cryptocurrency market
The new rate according to FMDQ Securities Exchange, a platform that publishes official foreign exchange trading in the country, means the naira gained N38 or 2.75 per cent at the close of trading activity.
In the last one month, the naira has strengthened by 20.4 per cent to N1,382 on Tuesday from the lowest of N1,665.50 closed on February 23, 2024.
The naira has been appreciating against the dollar recently following some foreign exchange reforms by the Central Bank of Nigeria.
At the press briefing that followed the 294th Monetary Policy Committee meeting, the governor of the Central Bank, Olayemi Cardoso, noted the improvement in foreign exchange, stating that forex stability will enhance investor confidence and attract foreign investments to Nigeria.
He said, “The considerations of the Committee at this meeting focused on the current inflationary pressures and the need to anchor inflation expectations as well as ensure sustained exchange rate stability.
“The Committee noted with satisfaction the level of stability achieved in the foreign exchange market in the last few weeks. This, in the view of Members reflects the impact of the Bank’s recent policy actions and reforms, as well as increased transparency in the market. In addition, the Committee noted the efforts of the Bank in offsetting verified foreign currency obligations, an action that will greatly enhance investor confidence and attract foreign investments to Nigeria.”
The summary of the daily FX market trading showed that the intraday high closed at N1,486 per dollar. The intraday low closed flat at N1,300per dollar on Tuesday, while the official FX market recorded a turnover of $245.58m.
Punch / Omowunmi Adewuyi
