In a significant move aimed at restoring faith in Nigeria’s economic stability, the Central Bank of Nigeria (CBN) has successfully cleared all valid foreign exchange backlogs, totaling $7 billion. This accomplishment, announced by Mrs. Hakama Sidi Ali, the bank’s Acting Director of Corporate Communications, marks a pivotal moment in the tenure of CBN Governor Mr. Olayemi Cardoso, fulfilling a critical commitment to the financial sector and the country at large.
The clearance of these backlogs was rigorously validated by independent auditors from Deloitte Consulting, ensuring that only legitimate transactions were processed. This meticulous approach culminated in the CBN completing the payment of $1.5 billion, thereby eradicating the remaining FX backlog for bank customers. This move is not just about settling debts but is a strategic step towards reinstating confidence and credibility in the Nigerian economy.
Governor Cardoso, speaking on this achievement, emphasized the priority the bank placed on clearing the FX backlog. We made clearing the FX backlog a priority to restore credibility and confidence in the Nigerian economy,” he stated, underlining the importance of an independent and credible process in verifying the authenticity of the obligations. With the backlog now cleared, Cardoso believes this will significantly lift the market’s confidence in Nigeria’s capability to meet its financial obligations.
The initiative is part of a broader strategy, discussed in the recent Monetary Policy Committee meeting, aimed at stabilizing the exchange rate, reducing imported inflation, and enhancing confidence in the banking system and overall economy. Following this strategic move, the CBN reported a substantial rise in external reserves, amounting to a $993 million increase to $34.11 billion as of March 7, 2024. This figure represents the highest level of reserves in eight months, driven by an uptick in remittance payments from Nigerians abroad and increased purchases of local assets, including government debt securities, by foreign investors.
Governor Cardoso’s engagements with foreign portfolio investors and detailed presentations in Monetary Policy Committee meetings underscore a comprehensive approach to not only improve Nigeria’s foreign currency reserves but also to ensure liquidity in the foreign exchange market. This multifaceted strategy signifies the CBN’s commitment to stabilizing the nation’s economy, fostering an environment conducive to growth and investor confidence.
