Cardoso clears CBN's $7bn forex backlogs

In fulfilment of a key pledge of its Governor, Olayemi Cardoso, the Central Bank of Nigeria (CBN) has announced that all valid foreign exchange backlogs of $7 billion have now been settled.

The accomplishment signals an effective elimination of legacy burden on the apex bank.

The development was confirmed by the CBN’s Acting Director of Corporate Communications, Sidi Ali, in a statement in Abuja on Wednesday, March 20, 2024.

Ali stated that independent auditors from Deloitte Consulting meticulously assessed the transactions to ensure that only legitimate claims were honoured.

She stressed that the apex bank recently concluded the payment of $1.5 billion to settle obligations to bank customers, effectively settling the residual balance of the FX backlog.

“We made clearing the FX backlog a priority to restore credibility and confidence in the Nigerian economy," Cardoso had declared at a recent meeting.

The CBN followed this month by reporting a significant increase in external reserves, rising by $993m to $34.11bn as of March 7, 2024, the highest level in eight months.

The month-on-month increase has been attributed to the marked rise in remittance payments from Nigerians abroad and higher purchases of local assets, including government debt securities, by foreign investors.

The statement partly reads, “The Central Bank of Nigeria has announced that all valid foreign exchange backlogs have now been settled, fulfilling a key pledge of the CBN Governor, Mr Olayemi Cardoso, to process an inherited backlog of $7bn in claims.

“Clearance of the foreign exchange transactions backlog is part of the overall strategy detailed in last month’s Monetary Policy Committee meeting to stabilise the exchange rate and thereby curb imported inflation, spurring confidence in the banking system and the economy.

“Cardoso used the MPC meeting and a subsequent conference call with foreign portfolio investors to set expectations for sustained increases in Nigeria’s foreign currency reserves and improved liquidity in the foreign exchange market.”