$2.4bn Invalid FX Backlogs: Aigbe Backs CBN To Discipline Offenders

The comment by the Central Bank Governor, Olayemi Cardoso, that the bank will not honour $2.4bn backlog it inherited from past governors over their alleged illegitimacy has sent panic among companies.

Cardoso said in an interview aired on Monday that he inherited about $7bn foreign exchange forwards backlogs from the former CBN Governor, Godwin Emefiele and Acting Governor, Folashodun Shonubi.

But the worrisome part of the backlogs is that an assessment by Deloitte revealed that $2.4bn of the backlogs were illegitimate and fraudulent.

Cardoso said efforts were made for the authorised dealers to substantiate their claims but they could not.

The Director Escap Management Limited, Esili Eigbe, said the CBN is in a good position not to honour the $2.4bn invalid claims.

According to Eigbe, the pronouncement should not have negative implications for banks through which the companies applied for FX.

Eigbe said, “If the Central Bank has written to you to justify your claim and you haven’t done so to their satisfaction, it justifies the point of the Central Bank that they were invalid.

“It means that perhaps the right documentation was not presented or the purchase was for the wrong type of product or service.

“What the Central Bank is doing today is trying to bring a lot more transparency into the FX market and it does seem like he is really concerned about credibility. The market needs to take the word of the Central Bank and react accordingly.”

Some of the infractions identified in the Deloitte audit ranged from not having valid import documents and in some cases “entities that did not exist”, to beneficiary’s account parties who had asked for foreign exchange got more than they asked for.

Another infraction was that some of the companies didn’t ask for forex and they received foreign exchange.

Eigbe advised that the affected parties should “reapply for FX through their banks based on the current FX regime.”

Cardoso has maintained a clear stand that he wants a credible Central Bank that will enable it to achieve price stability.