The Central Bank of Nigeria (CBN) Governor Yemi Cardoso revealed that law enforcement agencies are investigating foreign exchange forwards valued at around $2.4 billion. These transactions are considered ineligible for payment.
Cardoso made this revelation following the Monetary Policy Committee (MPC) meeting held in Abuja on Tuesday, March 26.
The CBN governor explained that a thorough forensic audit conducted on these transactions uncovered numerous discrepancies, rendering them invalid.
The CBN, while settling certain portions of the FX backlog, encountered transactions with authenticity issues. As a result, Deloitte management consultants were brought in to conduct a comprehensive forensic analysis over several months to assess the legitimacy of these forward-contracted transactions.
During the audit, it was found that several transactions did not meet the validation criteria. Some allocations were disbursed without corresponding requests, and some transactions lacked proper documentation or were outright illegal.
According to Cardoso, “In the cause of that forensic audit, we determined that a number of these transactions did not qualify. In some cases, you had some requests, which well you actually had some allocations that were made in millions of dollars, which were never requested for.
“You also had somewhere they had no Naira and they were also allocated, you know, huge sums, the foreign exchange and the list goes on and it was for that reason that we refused to validate those particular transactions.
“We refused to validate them because you know apart from the fact that documentation was not satisfactory in many cases they were outright illegal and the law enforcement agencies of course are now looking into those transactions that are as far as we’re concerned, not valid to be paid.”Addressing concerns about potential backlogs among stakeholders, Cardoso assured that the market remains open and transparent for them to address any outstanding contractual obligations. However, the CBN has diligently verified and settled recognized backlogs of forward transactions.
