Nigerian corporates and SMEs have expressed deep concern over the Central Bank of Nigeria’s (CBN) failure to settle foreign exchange (FX) forwards that matured between 2022 and 2023.
The unsettled transactions are causing widespread anxiety among stakeholders who fear the potential economic fallout.
Reports suggest that the delay in settling these FX forwards could result in a loss of approximately N2.4 trillion, adversely affecting Company Income Tax (CIT) over the next two to three years and potentially diminishing federal government revenue.
The issue could also place significant strain on the already fragile FX market, leading to a possible surge in exchange rates to around N3,000/$.
The unresolved forwards may also lead to substantial losses for banks as SMEs and corporates struggle to service confirmation lines, risking over one million jobs. Analysts warn that these issues could erode investor confidence in a struggling economy, underscoring the need for swift action by the CBN.
Earlier this year, in March, the CBN announced that it had cleared all valid FX backlogs owed to various sectors, fulfilling a key pledge by CBN Governor Mr. Olayemi Cardoso.
READ ALSO: Just in: Again, CBN raises Interest Rate to 26.75%
However, Cardoso later revealed that out of the reported $7 billion in outstanding foreign exchange liabilities, about $2.4 billion were deemed invalid for settlement.
He cited a forensic audit by Deloitte Management Consultant as a basis for this decision.
Cardoso stated that the CBN had settled verified FX requests totaling $2.3 billion, with the remaining outstanding obligations at $2.2 billion.
He emphasized that the CBN would not honor FX requests deemed invalid and had asked authorized dealers to clarify the discrepancies.
Additionally, the CBN has engaged the Economic and Financial Crimes Commission (EFCC) to investigate suspicious transactions and prosecute fraudulent activities.
Despite these efforts, affected companies are growing increasingly frustrated. Many have used bank-confirmed lines to open Letters of Credit (LCs), paid import duties, and received goods, often settling with their suppliers through correspondent banks.
READ ALSO: CBN sells $122.67 million to 46 authorized FOREX dealers
The delay in settling these forwards is causing severe financial strain, with businesses facing pressure from banks and suppliers.
The Nigerian Employers’ Consultative Association (NECA) has called on the CBN to prioritize settling the forwards and to expedite EFCC investigations into any fraudulent activities.
Director General Mr. Adewale-Smatt Oyerinde criticized the involvement of the EFCC, arguing that due diligence by the CBN should be sufficient to resolve genuine cases.
Oyerinde highlighted that unsettled FX forwards have disrupted production plans and capacity utilization, particularly for SMEs.
He urged the CBN to engage directly with relevant banks to resolve these issues and avoid further delays, emphasizing that the continued financial strain is detrimental to businesses and the broader economy.