Nigeria’s central bank has successfully settled the entire foreign exchange forwards liability of 14 banks, marking a significant step towards easing concerns over the country’s forex reserves. This move comes amid ongoing challenges with foreign currency shortages, impacting the value of the naira.
The Central Bank of Nigeria (CBN) spokesperson, Hakama Sidi Ali, revealed on Wednesday that settlements with foreign airlines have commenced following the clearance of the backlog. The country, with Africa’s largest economy, had been grappling with a substantial forex forwards liability of about $7 billion, prompting concerns from investors.
Approximately $2 billion from the backlog has been disbursed across various sectors, including manufacturing, aviation, and petroleum. Ali emphasized that this payment is part of the CBN’s commitment to addressing the forex backlog and stabilizing the naira.
However, an independent forensic review commissioned by the central bank exposed “grave infractions, gross abuse, and significant non-compliance with market regulations” within the forex transactions. Ali stated that appropriate sanctions would be enforced in collaboration with relevant agencies.
The CBN is resolute in its commitment to cleaning up the financial services industry, aiming to boost market confidence. Despite the revealed irregularities, the central bank remains focused on settling legitimate forex backlogs to clear all outstanding liabilities.
Investors will be closely monitoring the developments, as the resolution of the forex backlog and the implementation of sanctions contribute to shaping Nigeria’s economic landscape.