The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has confirmed that forensic verification to address the lingering foreign exchange backlog has been completed, with payments set to begin soon.
This marks a major step towards resolving one of the most pressing issues in the country’s foreign exchange market.
Speaking at the launch of the new Foreign Exchange Code, Cardoso expressed regret that it took the bank over a year to clear the $7 billion backlog in 2024. The backlog, which had been a longstanding problem, was finally eliminated by March of that year, lifting a significant burden from the CBN’s operations.
Cardoso emphasized that the era of multiple exchange rates, which had previously benefited only a select few, is now over. He reiterated that all commercial banks found violating the ethical standards set by the new Foreign Exchange Code will face serious sanctions, reinforcing the CBN’s commitment to fairness and transparency in forex dealings.
The Governor also reflected on the damaging effects of the previous methods of financing, particularly the unprecedented “ways and means” approach, which he argued contributed to high inflation and the depreciation of the naira. This practice, which had a negative impact on the economy, is now being phased out in favor of more sustainable policies.
The newly introduced Foreign Exchange Code will serve as a guideline for the banking sector, encouraging ethical conduct and improving accountability in the forex market. Additionally, Cardoso highlighted the launch of the Electronic Foreign Exchange Matching System in December 2024, which has enhanced market transparency and efficiency. This system has already contributed to a notable improvement in the value of the naira, which appreciated from N1,663 to $1 in December 2024 to N1,536 to $1 by January 27, 2025.
Further bolstering the outlook, Cardoso confirmed that Nigeria’s external reserves had grown to $40.7 billion by December 2024, signaling a positive shift in the country’s financial standing.
With these reforms in place, the CBN is committed to maintaining exchange rate stability and ensuring a more transparent, fair, and efficient forex market.
