In a race against time to ease the stranglehold of a forex crisis, Nigeria’s Central Bank has reportedly paid nearly $2 billion in the last three months to settle outstanding foreign exchange forwards. This desperate move aims to alleviate concerns about the staggering $7 billion forex forwards backlog, a looming threat causing anxiety among investors and casting a shadow over the country’s economic stability.
The Central Bank of Nigeria (CBN) acknowledges the urgency of the situation, emphasizing its commitment to resolving pending obligations and revitalizing a functional foreign exchange market. Acting spokesperson Hakama Sadi Ali, in a statement late on Sunday, stated, “In the past three months, the CBN has also redeemed outstanding forward liabilities amounting to almost USD 2 billion. This underscores the Bank’s commitment to the resolution of pending obligations and a functional foreign exchange market.”
Despite these efforts, Nigeria’s naira continues to grapple with the repercussions of persistent forex shortages, a crisis exacerbated by declining oil production—the country’s primary export, contributing over 90% of dollar inflows.
Ali revealed that the CBN recently disbursed $61.64 million to foreign airlines facing the brunt of the currency crisis. These airlines, having sold tickets in the local naira currency, have struggled to repatriate their funds out of the country. As of November, foreign airlines were owed a staggering $700 million, further highlighting the severity of the foreign exchange challenges.
“These payments signify the CBN’s ongoing efforts to settle all remaining valid forward transactions, with the aim of alleviating the current pressure on the country’s exchange rate,” Ali asserted.
With the forex crisis showing no signs of abating, President Bola Tinubu has pledged to boost foreign currency inflows into Nigeria. His proposed strategies include attracting new investments, ramping up oil production, and instituting reforms in the foreign exchange market. The effectiveness of these measures remains uncertain, leaving the nation in suspense as it grapples with the repercussions of a deepening economic turmoil.