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The Central Bank of Nigeria (CBN) has achieved a significant milestone by settling all valid foreign exchange backlogs, effectively eliminating a legacy backlog inherited by Governor Mr. Olayemi Cardoso. This commitment fulfills a crucial pledge to address a backlog of US$7 billion in claims.
Mrs. Hakama Sidi Ali, Acting Director of Corporate Communications at the CBN, announced this development in Abuja on Wednesday. She highlighted that the recent completion of a $1.5 billion payment to bank customers marked the resolution of the residual balance of the FX backlog.
Furthermore, Ali emphasized that independent auditors from Deloitte Consulting meticulously scrutinized these transactions, ensuring that only legitimate claims were honored. Any questionable transactions were promptly referred to relevant authorities for further investigation.
Governor Cardoso underscored the importance of clearing the FX backlog to restore credibility and confidence in Nigeria’s economy. He stated, “We made clearing the FX backlog a priority to restore credibility and confidence in the Nigerian economy.”
With all genuine and verifiable transactions now settled, Cardoso expressed confidence that this obstacle to market confidence has been overcome.
The clearance of the foreign exchange transactions backlog aligns with the comprehensive strategy outlined in the recent Monetary Policy Committee (MPC) meeting. This strategy aims to stabilize the exchange rate, curb imported inflation, and foster confidence in the banking system and the economy at large.
During the MPC meeting and subsequent engagements with foreign portfolio investors, Governor Cardoso articulated expectations for sustained growth in Nigeria’s foreign currency reserves and enhanced liquidity in the foreign exchange market.
The CBN’s efforts have already yielded positive results, with external reserves witnessing a significant increase. As of March 7, 2024, reserves surged by $993 million to reach $34.11 billion, the highest level in eight months. This increase was driven by higher remittance payments from Nigerians overseas and increased purchases of local assets, including government debt securities, by foreign investors.
The successful resolution of the FX backlog marks a pivotal moment in Nigeria’s economic trajectory, demonstrating the CBN’s commitment to fostering stability and confidence in the financial landscape.
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