Non-existing entities, other infractions make up $2.4bn FX backlog – CBN Boss

By Mariam Abeeb

The governor of the Central Bank of Nigeria, Dr Olayemi Cardoso, has said that about $2.4bn of the $7bn foreign exchange backlog he met when he got into office were from non-existing entities, requests without import documents among other infractions.
Cardoso said this during an interview where he addressed concerns about the recent volatility in the currency market.
He said, “Approximately, $7bn was what we were told that the obligations were and we looked at this and commenced the process of paying with the meagre resources as we had them. Settling some which believed were valid and due for payment. This wasn’t something we could just do in one shot. It had to take a bit of time.
“As we went along, we had reasons to believe that we needed to take a harder look at these obligations. So, we contracted Deloitte management consultants to do a forensic of all these obligations and actually tell us what was valid and what was not. Of course, we are committed to paying all valid transactions.”
On the findings of the forensic audit, Cardoso said the results were startling.
“We discovered that of the roughly $7bn, about $2.4bn had issues. We believed that they had no business being there. The infractions that ranged from so many things. For example, not having valid import documents and in some cases entities that did not exist and in some cases, account parties who had asked for foreign exchange and got more than they asked for and some that didn’t even ask for any and got. There were a whole load of infractions there,” he said.
Asked what the apex bank was going to do about those contentious transactions, Cardoso simply said, “We are not paying, if you don’t qualify. “
In terms of foreign investment outlook, Cardoso said that many foreign investors are interested in coming back to Nigeria owing to the positive outlook of reforms.
“We have a situation where many foreign portfolio investors are very interested in returning to the Nigerian market. They’ve taken a very methodical interest in understanding how the reforms are taking place and see how it’s taking the country in a direction they believe is the right direction,” he said.
He also said that the CBN had settled $2.3 billion FX requests and was working to settle the outstanding $2.2 billion valid FX backlog.
“We wrote to the concerned parties of the invalid claims, but sadly, much of those have not been disputed to satisfaction,” Cardoso said.
He also said that increased domestic productivity would further help the CBN to achieve its aim.