In a move hailed as a step towards economic stability, the Central Bank of Nigeria, CBN, has announced the successful clearing of all verified foreign exchange, FX, backlogs.
Hakama Sidi Ali, acting director of corporate communications at CBN, disclosed this in a statement on Wednesday.
The backlog, estimated at around US$7 billion, stemmed from unprocessed requests for foreign currency.
Ali said the financial regulator recently concluded the payment of $1.5 billion to settle obligations to bank customers, effectively settling the residual balance of the FX backlog.
This accomplishment resolves a significant challenge that has been hindering businesses and individuals for some time. Businesses struggling to pay for imports and individuals seeking funds for overseas transactions faced delays and uncertainty.
CBN Governor Olayemi Cardoso pledged to address the backlog upon taking office in October 2023, prioritising restoring credibility and confidence in the Nigerian economy.
“We made clearing the FX backlog a priority to restore credibility and confidence in the Nigerian economy,” Governor Cardoso declared at a recent meeting.
The CBN implemented a meticulous verification process, ensuring only legitimate claims were honoured. Independent auditors from Deloitte Consulting played a crucial role in this process.
“Clearance of the foreign exchange transactions backlog is part of the overall strategy detailed in last month’s Monetary Policy Committee meeting to stabilise the exchange rate and thereby curb imported inflation, spurring confidence in the banking system and the economy,” Ali said.
The news has been met with cautious optimism by the business community.
The Lagos Chamber of Commerce and Industry, LCCI, President, Mrs. Bola Adesola, stated, “Clearing the backlog is a positive development. It will improve access to foreign exchange for legitimate business transactions.”
However, she cautioned that long-term solutions are needed to ensure a smooth flow of foreign currency in the future.
The CBN’s success in clearing the backlog coincides with a rise in Nigeria’s external reserves to $34.11 billion. This improved forex liquidity is expected to stabilise the exchange rate and make it easier for businesses and individuals to access foreign currency.
Ezinwanne Onwuka, senior staff reporter and columnist with WAP is a Nigerian-based writer and content developer. She holds a Bachelor of Arts degree in Philosophy from the prestigious University of Nigeria, Nsukka. Her interests include reading, writing, researching and graphic designing.
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