Pressure On Naira: CBN Uncovers $2.4Billion False Forex Claim – Cardoso

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CBN Uncovers $2.4 Billion False Forex Claim Pressuring Naira – Cardoso

The Central Bank of Nigeria (CBN) uncovered invalid foreign overdue claims totalling $2.4 billion, which have pressured the naira for long and spooked the currency market, central bank governor Yemi Cardoso said on Monday.

Mr Cardoso said the discovery was made after an audit by the consultant that the central bank engaged brought several shady deals to light.

After seven years of being concealed from public knowledge, the audited accounts of the CBN became public last year during which auditors revealed a $7 billion backlog of unmet dollar demand from investors and currency users.

That has created an overhang in the market which, unless cleared, could keep the naira pressured, leaving the currency on a continued free fall against the dollar.

The CBN hired Deloitte to investigate the forex claims to get a true picture of things, Mr Cardoso said during an interview with local TV Arise, broadcast Monday morning.

The Deloitte report found that as much as $2.4 billion of the said backlog are false claims, with claimers unable to present import documents in some instances, he said.

“We had had reasons to believe we needed to take a harder look at these obligations. So we contracted Deloitte management consultants to do a forensics of all these obligations and to actually tell us what was valid and what was not,” Mr Cardoso said.

“The result that came out of this was startling in a great respect. It was startling. We discovered that of the roughly $7 billion, about $2.4 billion had issues, which we believe had no business being there and the infractions on that ranged from so many things, for example not having valid import documents and in some cases entities that do not exist.”

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By Abia ThinkTank

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