The Central Bank of Nigeria (CBN) has taken a significant step in addressing the backlog of verified foreign exchange transactions by disbursing $500 million across various sectors. This announcement, made by Mrs. Hakama Sidi-Ali, CBN’s Acting Director of the Corporate Communications Department, follows the recent payment of approximately $2.0 billion to settle outstanding commitments in the manufacturing, aviation, and petroleum sectors.
The move reaffirms the CBN’s commitment to expeditiously settling legitimate foreign exchange backlogs, demonstrating its dedication to improving liquidity in the Nigerian foreign exchange markets. Mrs. Sidi-Ali emphasized that the CBN has adopted a comprehensive strategy to enhance liquidity in the short, medium, and long terms.
“As the Governor said, the CBN’s focus is on addressing fundamental issues that have hindered the effective operation of the Nigerian FX markets over the years,” she stated.
The ongoing forex market reforms aim to streamline and unify multiple exchange rates, foster transparency, and reduce arbitrage opportunities. Mrs. Sidi-Ali expressed confidence that achieving a stable exchange rate would boost investor confidence and attract foreign investment to Nigeria.
Despite the CBN’s efforts, forex shortages persist, impacting the value of the Nigerian naira currency. The CBN, in the past three months, successfully cleared almost $2 billion in overdue foreign exchange forwards to alleviate the backlog. The central bank continues to make payments, instilling confidence in the foreign exchange market.
Hakama Sidi Ali disclosed, “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.”
Efforts are underway to secure a $3 billion emergency loan from the Afrexim Bank to stabilize Nigeria’s volatile foreign exchange market and relieve the country of outstanding forex liabilities. President Bola Tinubu has pledged to enhance foreign currency inflows by attracting new investments, increasing oil production, and implementing reforms in the foreign exchange market.
