The Governor of the Central Bank of Nigeria (CBN) , Olayemi Cardoso, has dropped a bombshell, revealing an ongoing investigation into dubious foreign exchange allocations and forward contracts amounting to a staggering $2.4 billion. The probe, spearheaded by security agencies including the Economic and Financial Crimes Commission (EFCC), has sent shockwaves through Nigeria’s financial sector.
This revelation comes hot on the heels of a comprehensive audit conducted by global firm Deloitte, commissioned by the new administration of the apex bank. The audit, focused on the $7 billion dollar debts inherited by Cardoso’s leadership, uncovered a myriad of irregularities, with approximately $2.4 billion in FX allocations deemed invalid.
Speaking at a press briefing after the 294th meeting of the Monetary Policy Committee in Abuja, Cardoso disclosed that law enforcement agencies are delving deep into the murky waters of these questionable FX transactions highlighted in the audit report. He stressed the significance of adherence to regulatory standards, citing the majority of transactions flagged by Deloitte as failing to meet criteria for payment.
Cardoso did not mince words, describing the detected anomalies as “clearly unlawful,” with transactions ranging from allocations to non-existent entities to allocations made without corresponding naira value. The gravity of the situation prompted the apex bank to withhold validation of these transactions, pending the outcome of investigations.
While acknowledging the possibility of revisiting transactions found to be legitimate, Cardoso reiterated the CBN’s commitment to transparency and compliance. However, the cloud of uncertainty looms large over the duration of the investigation and its potential ramifications.
In response to concerns raised by stakeholders regarding unmet forex requests, Cardoso assured that the forex market remains open and transparent. Despite the ongoing probe, he underscored the CBN’s resolve to diligently verify and settle recognized backlogs of forward transactions, emphasizing the importance of market integrity.
The CBN’s directive for deposit money banks to bolster their capital base underscores its commitment to fortifying the financial system against potential risks. This move, part of broader efforts to support Nigeria’s economic growth ambitions, signals a proactive stance amidst evolving market dynamics.
Meanwhile, amidst the unfolding investigation, the Nigerian Naira continues its upward trajectory against the US Dollar, reaching N1,382/$ on Tuesday, a testament to recent forex stability efforts. Cardoso expressed optimism that sustained exchange rate stability will bolster investor confidence and pave the way for increased foreign investments in Nigeria.
As the saga unfolds, all eyes remain fixated on the outcomes of the investigation and its implications for Nigeria’s financial landscape. Stay tuned for further updates as the story develops.