Analysts have cautioned the Central Bank of Nigeria (CBN) to handle the $2.4 billion contentious backlog with care, emphasizing that resolving the remaining backlog could attract more foreign investors to the country,leadership reports.
Meanwhile, the Bank Directors Association of Nigeria (BDAN) has endorsed the measures taken by the CBN to address forex challenges, stating that these measures will promote stability and resilience in the banking industry.
CBN Governor, Dr. Olayemi Cardoso, revealed during an interview on Arise News that he inherited over $7 billion in backlogs, with $2.4 billion remaining unresolved, lacking official claims to support them. While $2.3 billion of the backlog has been cleared, $2.2 billion remains outstanding, and $2.4 billion is still contentious.
Cardoso emphasized that the CBN will not entertain foreign exchange requests that lack valid documentation. The CBN has communicated discrepancies to authorized dealers, but many issues remain unresolved.
Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co, stressed the importance of managing the contentious $2.4 billion backlog effectively to rebuild the CBN’s reputation and regain investor confidence.
Dr. Muda Yusuf, Chief Executive of the Centre for the Promotion of Private Enterprise (CPPE), supported the CBN’s authority in determining the validity of transactions. He assured that the backlog would be cleared soon, enhancing market confidence and liquidity.
Olubunmi expressed reassurance that the CBN has made significant progress in clearing the backlog, but cautioned that there might still be pent-up demand in the market.
In the midst of these discussions, BDAN urged banks to comply with the CBN’s directives on forex management, particularly regarding Net Open Positions (NOP). The association praised the CBN’s efforts to fortify the financial system and ensure responsible banking practices.
BDAN emphasized the importance of regulatory measures in mitigating potential risks and promoting transparency and accountability within the banking sector. The association pledged its support for initiatives aimed at enhancing the stability and prosperity of the Nigerian economy.
Furthermore, BDAN encouraged banks to fully comply with the new directives and collaborate with stakeholders to achieve regulatory compliance. The association commended the CBN’s consultative approach and expressed confidence that these measures would contribute to the long-term sustainability and growth of the banking sector.