The Central Bank of Nigeria, CBN, has discovered widespread abuse and serious noncompliance with the country’s foreign exchange market regulations.
In a statement issued Wednesday night, the apex bank said that appropriate fines would be imposed in consultation with competent agencies.
The CBN Acting Director of Communication, Mrs. Sidi Ali, who signed the statement, said that the apex bank commissioned an independent forensic review by a renowned organization to look into the country’s foreign exchange concerns.
Nigeria has nearly $7bn in forex forwards that have matured which is a major concern for investors, but the CBN promised to pay up to boost confidence in the foreign exchange markets.
According to her, the review revealed grave infractions, gross abuse, and significant non-compliance with market regulations, and appropriate sanctions would be enforced in collaboration with relevant agencies.
She also said the CBN will continue to settle the legitimate foreign exchange backlog as it has consistently been doing in the last three months.
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Nigeria’s foreign currency shortages have been worsened by declining oil production, which is the country’s largest export, accounting for more than 90 per cent of dollar inflows.
According to her, the CBN in its bid to clear the backlog of outstanding foreign exchange liabilities, has paid about $2bn across various sectors, including manufacturing, aviation, and petroleum
The statement reads, “The Central Bank of Nigeria (CBN), in its bid to clear the backlog of outstanding foreign exchange liabilities, has paid approximately $2bn across various sectors, including manufacturing, aviation, and petroleum. The Bank has also cleared up the entire liability of 14 banks and started settlements with foreign airlines.
“The Bank had commissioned an independent forensic review by a reputable firm. She also disclosed that payment of the forex backlog for qualified transactions had commenced.
“The review revealed grave infractions, gross abuse, and significant non-compliance with market regulations, and appropriate sanctions would be enforced in collaboration with relevant agencies.”
Ali stressed the CBN’s resolve to sanitize the financial services sector and foster trust among all market participants, as well as internal and external stakeholders, in the Nigerian economy.
Nevertheless, she said the CBN will continue to settle the legitimate foreign exchange backlog as it has consistently been doing in the last three months.