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Law enforcement agencies investigating $2.4bn unverified FX claims – Cardoso

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The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, says law enforcement agencies are investigating $2.4 billion unverified foreign exchange (FX) claims.

 

Cardoso spoke during a press conference on Tuesday after the 294th meeting of the monetary policy committee (MPC) in Abuja.

 

On February 5, Olayemi Cardoso, CBN governor, said he inherited a $7 billion FX backlog when he became the head of the apex bank in September 2023, however, it was discovered that $2.4 billion of the sum was invalid following an inquiry into the transactions.

 

Subsequently, the apex bank said all outstanding FX obligations had successfully been settled.

 

While providing clarification on the unverified claims, the CBN governor highlighted various irregularities, such as the disbursement of large sums of FX for requests that were never submitted and allocations made without the necessary naira backing. 

 

He said there was an absence of legal validity and adequate documentation in these transactions.

 

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Cardoso also stressed the gravity of these irregularities, labelling numerous transactions under investigation as “clearly unlawful”.

 

“We brought in Deloitte management consultants who took time and this really did take months. This is not something that happened overnight and a lot of this work was going on and people didn’t know but they took months painstakingly to go through all the documents, all the documents and to ensure that you know, they would have a report, which we could rely on,” he said.

 

“In the course of that, of course, we determined that a number of these transactions did not qualify. In some cases, you had some allocations that were made in millions of dollars, which were never requested for.

 

“We also had somewhere they had no naira and they were also allocated, you know, huge sums of foreign exchange and the list goes on. It was for that reason that we refused to validate those particular transactions.

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“We refused to validate them because apart from the fact that documentation was not satisfactory, in many cases, they were outright illegal. And the law enforcement agencies, of course, are now looking into those transactions that are, as far as we’re concerned, not valid to be paid. 

 

“I would emphasise that if there’s any information to the contrary, we would in due course consider that but as of today, that is exactly where it stands and the law enforcement agencies are taking a very, very hard look at those transactions.

 

“Other transactions, we have settled and as of today, as I have said before, I will say it again, that the valid transactions as far as the Central Bank of Nigeria is concerned, have been taken care of.”

 

‘FX MARKET IS AS OPEN, TRANSPARENT AS POSSIBLE’

Speaking further, Cardoso addressed the issue of stakeholders who may not be satisfied with the FX official market.

 

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According to Cardoso, all verified claims have been settled, adding that anyone is free to access the market.

 

“We are also not mindful of the fact that there may be some stakeholders who over a period of time may have had backlogs in one form or the other,” he said.

 

“We are not unmindful that that could be the case. That some of those may go back, you know, years, a long period of time.

 

“We have done what we can to make the market as open and transparent and liquid as possible. So those particular stakeholders are free to access those markets and take care of the backlogs. We have met the verified backlogs of contractual obligations as we deem them forward transactions.”

 

Meanwhile, on March 21, foreign airlines in Nigeria said they do not support patronising the investors and exporters (I&E) window  for foreign exchange (FX) transactions.

 

 

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Naira appreciates to N1,100/$ in parallel market

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The naira appreciated further on Monday in the parallel section of the foreign exchange (FX) market.

 

At the Lagos street market, currency traders, also known as bureau de change (BDC) operators, quoted the naira at N1,100 to the greenback.

 

The traders put the buying price of the dollar at N1,070 and the selling price at N1,100 — leaving a profit margin of N30.

 

The figure represents an appreciation of N50 or 4.34 percent from the N1,150/$ it traded on April 12.

 

At the FMDQ Exchange, a platform that oversees official foreign exchange (FX) trading in Nigeria, the local currency rose by 5.72 percent or N69.02 to N1,136.04/$ on Monday — from N1,205.06/$ on April 12.

 

On April 11, the presidency said President Bola Tinubu’s multi-faceted approach to eliminating foreign exchange (FX) racketeering is strengthening the naira against global currencies.

 

In a statement on Wednesday, Ajuri Ngelale, special adviser to the president on media, said the country’s financial position will improve, leading to the possibility of Nigerians experiencing a stronger naira and a decrease in the prices of goods.

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“The President has been very consistent in his view that the labour pains felt by our people and the incredible sacrifices made by our people over the past 10 months would be rewarded across the board,” Ngelale said.

 

On April 12, Goldman Sachs Group said the naira could extend gains to trade below N1,000 to the dollar.

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Naira strengthens, trades at N1,150/$ in parallel market

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The naira, on Friday, appreciated to N1,150 per dollar at the parallel section of the foreign exchange (FX) market.

Currency traders in Lagos, also known as bureau de change (BDCs) operators, quoted the buying rate of the greenback at N1,110 and the selling price at N1,150 — leaving a profit margin of N40.

 

The naira appreciated by 0.86 percent from the N1,160 recorded on April 11.

 

“The dollar is falling and it is not my fault. It is how the FX market is now,” Lawal, a BDC operator, said.

 

Also, FMDQ Exchange, a platform that oversees official foreign exchange (FX) trading in Nigeria, said the naira rose by 7.16 percent or N88.23 to N1,142.38/$ on Friday — from N1,230.61/$ on Monday.

 

The appreciation of the naira is coming a few days after the CBN opened the third tranche of sales to BDC operations.

 

The apex bank began the sale of foreign exchange to BDC operators at the rate of N1,101/$ on April 8.

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Also, on the same day, the CBN directed all banks to stop the use of foreign currency-denominated collaterals for naira loans.

 

The financial regulator is intensifying its efforts to boost liquidity and strengthen the naira.

 

Meanwhile, earlier today, Goldman Sachs Group Inc. said the naira could extend gains to trade below N1,000 to the dollar.

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Air Peace: Patronise local airlines on int’l routes, Keyamo urges Nigerians

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The minister of aviation and aerospace development, Festus Keyamo, has asked Nigerians to fully patronise Air Peace and other local airlines flying international routes.

 

This, Keyamo said, is the only way local airlines can survive stiff competition from foreign carriers.

 

On March 30, Air Peace, Nigeria’s flag carrier, commenced its Lagos-London flight services — a landmark achievement celebrated by many Nigerians.

 

Following the milestone, Allen Onyema, chief executive officer (CEO) of Air Peace, on April 9, said some airlines are conspiring to take his company out of business by underpricing the flight tickets for the Lagos-London route.

According to the entrepreneur, the foreign airlines’ governments are supporting them to do this and take Air Peace out.

Speaking to TheCable on Thursday, Keyamo said while he cannot currently make a policy statement on what the Nigerian government will do to support Air Peace, President Bola Tinubu’s administration would continue to assist local entrepreneurs.

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“The first thing is for Nigerians to fully patronise not only Air Peace but all indigenous airlines on international routes. Before the federal government does anything, let Nigerians patronise him and know that this is our indigenous airline,” he said.

 

“As for government, I cannot make any policy statement for the government now because I am a minister. Whatever we can do, we will discuss that behind the scenes. But it’s wrong for me to make a policy statement now.

“As I have said earlier, one of my main goals in office is to help Nigeria’s domestic airlines grow and improve, supporting President Bola Tinubu’s Renewed Hope Agenda”.

Keyamo added that the federal government would continue to protect Air Peace and other Nigerian carriers that may seek to operate international service.

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