‘Nonexistent entities got FX’ — Cardoso says $2.4bn transactions were invalid

Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), says several infractions were discovered in about $2.4 billion foreign exchange (FX) transactions.

In an exclusive interview with Arise Television on Monday, Cardoso said a forensic audit of the bank’s $7 billion FX backlog by Deloitte Management Consultant, revealed that $2.4 billion of the transactions was invalid.

Cardoso said some of the infractions include a lack of valid import documents, and transactions involving nonexistent entities.

“We contracted Deloitte Management Consultant to do a forensic of all these obligations and to tell us what was valid and what was not. Of course, we were committed to ensuring that we would pay all valid transactions,” he said.

“The result that came out of this was startling in great respect; it was quite startling. We discovered that of the roughly $7 billion, about $2.4 had issues, which we believed had no business being there – and the infractions from that range from so many things.

“For example, not having valid import documents and in some cases, even entities that did not exist and in some cases, beneficiaries and account parties that asked for FX and got more than they asked for. And those who didn’t even ask for any and got.

“So, there was a whole load of infractions there, which I said amounted to about $2.4 billion out of the $7 billion headline figure.”

According to the governor, the apex bank has successfully settled legitimate FX requests totalling $2.3 billion, leaving an outstanding obligation of approximately $2.2 billion.

Cardoso’s revelation comes amid the implementation of critical policies by the apex bank aimed stabilising Nigeria’s FX market which has continued to fluctuate in the past week.