Naira Instability: CBN Discovers $2.4bn Forex overdue claim Causing Naira Instability

Yemi Cardoso of the Central Bank of Nigeria (CBN) disclosed on Monday, January 05, 2024 that a $2.4 billion scam involving false foreign exchange claims has been unearthed.

Governor Cardoso, speaking in a pre-recorded interview on Arise TV, provided insights into the findings of the investigation.

The scam has not only exerted immense pressure on the already struggling naira but has also had effect on the currency market according to the CBN governor.

The discovery emerged following an extensive audit conducted by Deloitte, a consulting firm hired by the CBN to investigate the suspicious claims.

The audit laid bare $7 billion backlog of unmet dollar demands from both investors and businesses.

This financial “overhang,” as described by Governor Cardoso, poses a significant threat to the stability of the naira against the US dollar.

“We 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,” explained Cardoso.

“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,”he said.

Culled from Gistmania