The Central Bank of Nigeria (CBN), in an effort to clear the backlog of confirmed foreign exchange transactions, has issued $500 million to a number of sectors. In a statement released on Monday in Abuja, Mrs. Hakama Sidi-Ali, the acting director of CBN’s corporate communications department, stated as much.
Sidi-Ali stated that this occurred just one week after the central bank paid almost US$2 billion to pay unfulfilled obligations in the industrial, aviation, and petroleum sectors, according to the News Agency of Nigeria (NAN). She declared that the CBN’s management was dedicated to clearing all valid foreign exchange backlogs as soon as possible.
According to her, the CBN has started putting into practice a thorough plan to increase liquidity in Nigeria’s foreign exchange markets in the short, medium, and long term. The reforms to the forex market were intended to promote transparency, lessen arbitrage opportunities, and simplify and harmonize various currency rates.
She conveyed her conviction that foreign investment and investor confidence would both increase with a stable exchange rate. She pleaded with all market players to follow the regulations, stressing that openness would allow for the equitable setting of exchange rates.
In an effort to clear the backlog of dollars in the biggest economy in Africa, the Central Bank of Nigeria (CBN) has successfully cleared about $2 billion in past-due foreign exchange forwards in the last three months.
Even with these initiatives, there are still cash shortages, which affect the value of Nigeria’s naira. Investors are concerned about the about $7 billion in maturing foreign exchange futures; however, the CBN has promised to make payments in order to restore trust in the foreign exchange market.
According to Ali, the CBN has paid out $61.64 million to international airlines that were underpaid for tickets purchased in local currency but needed help bringing their money back to their home country of Nigeria. The total amount owed to foreign airlines as of November was more than $700 million.
The NNPCL is in the process of obtaining a $3 billion emergency loan from the Afrexim Bank in order to calm the nation’s unstable foreign exchange market and release Nigeria from its outstanding currency liabilities. President Bola Tinubu has promised to increase oil output, draw in new investment, and restructure the foreign exchange system in order to increase foreign currency inflows into Nigeria.