The Central Bank of Nigeria (CBN) has announced the settlement of all valid foreign exchange backlogs, fulfilling a key pledge by CBN governor, Olayemi Cardoso, to address an inherited backlog of US$7 billion in claims.
According to Hakama Sidi Ali, the CBN’s acting director of Corporate Communications, this disclosure was made in Abuja on Wednesday. Ali stated that the CBN concluded the payment of $1.5 billion to settle obligations to bank customers, effectively clearing the residual balance of the FX backlog. She also mentioned that independent auditors from Deloitte Consulting meticulously assessed the transactions, ensuring that only legitimate claims were honored.
Cardoso emphasised the priority placed on clearing the FX backlog to restore credibility and confidence in the Nigerian economy. He highlighted the importance of an independent, and credible process to determine the authenticity of obligations; noting that all genuine, verifiable transactions have now been cleared. This move aims to enhance the world market’s confidence in the country’s ability to meet its obligations.
The clearance of the foreign exchange transactions backlog is part of the overall strategy detailed in last month’s Monetary Policy Committee (MPC) meeting to stabilise the exchange rate, and curb imported inflation: thereby boosting confidence in the banking system, and the economy.
Cardoso also set expectations for sustained increase in Nigeria’s foreign currency reserves, and improved liquidity in the foreign exchange market during the MPC meeting, as well as a subsequent conference call with foreign portfolio investors.
The CBN reported a significant increase in external reserves, rising by $993 million to $34.11 billion as of March 7, 2024, the highest level in eight months. This month-on-month increase was attributed to a notable advance in remittance payments by Nigerians overseas, and higher purchases of local assets, including government debt securities, by foreign investors.
