Nigeria Central Bank Clears 14 Banks’ FX Backlog, Turns To Airlines

Nigeria’s central bank has cleared the entire foreign exchange forwards liability of 14 banks, an official said on Wednesday, adding that settlements with foreign airlines have now begun.

Africa’s biggest economy has about $7 billion in forex forwards that have matured, a major concern for investors as foreign currency shortages continue to weigh down the naira currency, despite assurances by the Central Bank of Nigeria (CBN) to clear the backlog.

So far, about $2 billion of the backlog across sectors such as manufacturing, aviation, and petroleum have been paid, CBN spokesperson Hakama Sidi Ali said in a statement.

Ali said an independent forensic review of the backlog commissioned by the central bank revealed “grave infractions, gross abuse, and significant non-compliance with market regulations.”

Appropriate sanctions will be enforced on offenders, in collaboration with relevant agencies, Ali said.

The central bank is committed to cleaning up the financial services industry to boost market confidence, Ali said, adding that the bank will continue to settle legitimate forex backlog to clear all outstanding liabilities.

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