Why We Refused To Validate $2.4bn FX Backlog — CBN

The Central Bank of Nigeria (CBN) has said that it refused to validate the outstanding $2.4 billion Forex forward transactions because they were ineligible for forex allocation.

CBN governor, Olayemi Cardoso, disclosed this on Wednesday in reaction to foreign airline operators’ claim that CBN was yet to settle all FX backlog to its members.

Cardoso said the central bank relied on the report by Deloitte Consultants to refuse approval for the $2.4billion applications. Deloitte Consultants had produced an audit report that revealed that most of the transactions did not qualify for payment.

“In some cases, some allocations were made without being requested for. You also had some where they had no naira and they allocated foreign exchange. It was for that reason that we refused to validate those particular transactions. Because, apart from the fact that documentation was not satisfactory, many cases were outright illegal,” the CBN Governor said while responding to questions from journalists at the end of this month meeting of the Monetary Policy Committee (MPC) of the apex bank on Tuesday in Abuja.

He said law enforcement agencies were now looking into the transactions that are not valid to be paid.

He, however, said that if there is any information to the contrary, the CBN management would reconsider its stand in due course.

“Other transactions have been settled. And as at today, the valid transactions – as far as the Central Bank of Nigeria is concerned have been taken care of. We are also not unmindful of the fact that there may be some stakeholders who, over a period of time, may have had backlog in one form or the other,” he stated.

Cardoso said his administration has done what it could to make the FX market transparent and liquid as possible.