Critics said on Monday that the naira was destroyed by elites for their own personal advantage, pointing out that the apex bank had discovered $2.4 billion in fake foreign exchange requests that were mistakenly added to the FX backlog.
Their success nonetheless continues to be a reflection on the caliber of the Central Bank staff. If regulators don’t stay far ahead of the sector they oversee, perfect criminals will continue to cast a shadow over their role. Political interest has weakened the monetary authority’s regulatory role in the recent past.
It didn’t work out well for Nigeria since the previous head of the top bank combined control of the monetary power with political interests. A report on Nigeria’s foreign reserves that was purportedly inventive was among the many things that went wrong.
The Naira exchange rate couldn’t have survived the slugs from the holes created in the forex market. Yemi Cardoso, the new sheriff seems to be prioritising national interest above the immediate gain the financial services sector cowboys have been pursuing.
Cardoso’s recent revelation of FX infractions by local banks should be subjected to further review. In an interview with Arise TV, the CBN chief said, “We met $7 Billion in unpaid obligations. We had reason to believe we needed to take a harder look at those obligations”.
Then the CBN went ahead to engage Deloitte to do a forensic audit of what is valid or not. The results were startling as $2.4 billion had issues. Some FX requests have no valid import documents while some entities that did not exist got allocations. Some requisitors who asked for FX got more than they asked. Entities that did not ask got FX allocations through shady deals.
CBN said it wrote to the authorized dealers, many of which are deposit money banks with large earnings performance to explain. Sadly much has not been disputed, it said. According to Apex Bank, $2.3 billion of the validly executed ones including Airlines have been cleared. What remains is $2.2 billion.
“We are confident we will address those. We have come to the end of the road”. The Naira remains undervalued, according to the apex bank who continue to maintain that the local currency will stabilise.
