Tinubu pledges to eliminate all forex backlog

The backlog of unfulfilled foreign exchange transactions, which is eroding investor confidence as the naira continues to fall sharply on the secondary market, would be resolved, according to President Bola Tinubu’s commitment.

The president also promised that Nigeria will respect all upcoming foreign exchange commitments while speaking at the ongoing Nigeria Economic Summit #NES29 in Abuja on Monday.

“This administration will honour all foreign exchange future contracts. I can guarantee you that we have access to the foreign currency required to refloat this economy. And we’ll get it,” declared Tinubu.

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Remember how the Central Bank of Nigeria (CBN) promised to sell forward contracts to a number of Nigerian companies in the future at a predetermined price?

On the basis of the advance contracts, the banks created Letters of Credit (LCs), which were later utilised to purchase products from overseas suppliers.

According to individuals acquainted with the situation, the CBN has not settled the contracts since February 2023, which means there is a backlog of about $3 billion.

The total backlog, which also includes unresolved contracts with foreign investors, is believed to be worth $10 billion.

Due to the CBN’s inability to pay the dollar backlog, they are now in an extremely precarious FX liquidity situation and have been obliged to halt a number of operations, including applications for personal travel allowances and school fees.