- Reveals How Forensic Audit By Deloitte Unveiled Monumental Fraud In FX Market
- Confirms NNPCL, Other MDAs Moving Their Funds To CBN, Says This Will Reduce Volatility
- Amid Free-Fall, Cardoso Says Naira Undervalued, Promises Stability As Reforms Are Implemented
The shock that trailed the recent exposé by the Governor of Central Bank of Nigeria (CBN), Olayemi Cardoso is yet to subside.
Earlier on Monday, February 5, 2024, Cardoso appeared on Arise Television flagship programme, The Morning Show and exposed high-level corruption in the FX market.
The apex bank’s top man revealed that forensic audit by Deloitte Management Consultant uncovered that about $2.4 billion foreign exchange backlog out of the reported $7 billion FX liabilities of the federal government is not valid for settlement.
He disclosed that the audit’s findings showed various infractions, including non-existent entities and unauthorized FX allocations, not having valid import documents, entities who asked for FX got more than they asked, even entities that did not request for FX got allocations among other startling revelations.
Consequently, he disclosed that about $2.4 billion foreign exchange backlog out of the reported $7 billion FX liabilities of the federal government is not valid for settlement.
“We had had reasons to believe we needed to take a harder look at these obligations. So we contracted Deloitte management consultants to do forensics of all these obligations and to actually tell us what was valid and what was not”.
“The result that came out of this was startling in a great respect. It was startling. We discovered that of the roughly $7 billion, about $2.4 billion had issues, which we believe had no business being there and the infractions on that ranged from so many things, for example not having valid import documents and, in some cases, entities that do not exist.
“There were account parties who had asked for foreign exchange and got more than they asked for. There were some who didn’t even ask for any and got. So, there were whole loads of infractions there,” he added.
While uncertainty has continued to trail reports that President Bola Ahmed Tinubu had ordered that the state-owned oil company, Nigerian National Petroleum Corporation Limited NNPCL to domicile its earning with the apex bank, Cardoso confirmed this develop.
The governor highlighted that the recent strategic financial decisions made by the country, such as the Nigerian National Petroleum Corporation (NNPC) and other major Ministry Departments and Agencies MDAs moving their funding directly to the central bank. These moves are seen as strong confidence boosters, indicating that Nigeria aligns with the directions favoured by global investors.
Cardoso said: “The recent move to have NNPC and some of the other MDAs move their funding straight to the central bank also sends a powerful signal. It boosts confidence that Nigeria is finally going in the direction that many investors want to see it go.”
He added: “As the confidence comes back and their money starts coming in, which I see happening, volatility begins to reduce.”
During the interview, Cardoso, again, stated that the naira is undervalued.
He expressed optimism that irrespective of the state of the embattled local currency, foreign investors are still interested in the Nigerian economy
He, however, failed to state specifically what should be the real value of the local currency, noting, instead, that the volatility in the forex market makes it difficult to observe the fact the naira is undervalued.
“I think that given the relatively challenging times that Nigeria is in now, from a financial and economic standpoint, the different stakeholders within the government understand that collaboration is key. We hold regular meetings, we exchange different ideas, to ensure we are all heading towards the same direction.
“I think we should expect to see that we are working on the talk.
“The foreign investors come, they go; they come back the second time, they see the report of the rating agencies on how the economy is progressing; it validates what they are thinking. They see the economy progressing, with additional reforms, it continues to encourage them. That is how I see investors play today.”
He said that the policies being put in place will increase confidence in the economy and encourage foreign capital inflow which will stem the volatility, and help to stabilize the naira.
“I have said it before, and I am repeating it here, that the Naira is undervalued,” Cardoso stated.
