CBN Governor Exposes $2.4 Billion In Dubious FX Claims

By Adeyemi Adekunle

During an interview on Arise Television, Mr Olayemi Cardoso, who is the Governor of the Central Bank of Nigeria (CBN), shared some exclusive information regarding the financial landscape of the country.

According to him, out of the total outstanding foreign exchange liabilities of the federal government, which is reported to be $7 billion, a significant amount of $2.4 billion is plagued with irregularities.

This revelation has further brought to light the existing challenges and issues faced by the Nigerian financial system, and it underscores the need for greater transparency and accountability in managing the nation’s finances.

Cardoso, revealed that the bank has taken a meticulous approach in settling verified foreign exchange (FX) requests. He said CBN has successfully settled verified FX requests totaling $2.3 billion, which has resulted in the current total outstanding FX obligations being reduced to $2.2 billion.

This news might be a relief to those who have been waiting for their FX requests to be settled by the CBN.

The governor attributed part of the headline $7 billion to fraudulent claims, citing the findings of a comprehensive forensic audit conducted by Deloitte Management Consultant, commissioned by the apex bank.

Confident in the imminent resolution of the outstanding FX liabilities, Cardoso asserted that the CBN would not disburse funds for requests deemed invalid.

The bank has proactively communicated with authorized dealers, urging them to account for the identified disparities. Cardoso expressed his dismay, stating, “Sadly, quite frankly, I think much of those have not been disputed to our satisfaction.”

Delving into the intricacies of the situation, the central bank governor revealed, “We contracted Deloitte Management Consultant to do a forensic of all these obligations and to actually tell us what was valid and what was not. The result that came out of this was startling in a great respect; it was quite startling.”

The forensic audit brought to light a myriad of infractions, amounting to $2.4 billion, encompassing issues such as invalid import documents, non-existent entities, and discrepancies in allocations.

Cardoso emphasized the need to discern between valid and dubious transactions, underlining the gravity of the situation.

Providing a broader economic context, Cardoso highlighted that loans and advances in the economy totaled N40 trillion, with CBN interventions contributing approximately 25 percent.

He acknowledged that mismanagement of liquidity injections was a root cause of current distortions, including inflation. Despite lacking the capacity for direct interventions, the CBN governor affirmed the institution’s commitment to its primary mandate – to control inflation, stabilize prices, and foster a resilient economic environment.