In a significant development, the Central Bank of Nigeria has announced the successful clearance of all valid foreign exchange backlogs, effectively relieving the economy of a longstanding burden.

This milestone achievement reflects the commitment of CBN Governor, Mr Olayemi Cardoso, who had pledged to address the inherited backlog amounting to $7bn in claims.

The announcement was conveyed by Mrs Sidi Ali, the Acting Director of Corporate Communications at the bank, in a statement shared with journalists on Wednesday.

Furthermore, the CBN reported a notable surge in external reserves this month, witnessing a $993m increase to $34.11bn as of March 7, 2024, marking the highest level attained in eight months.

This uptick was attributed to heightened remittance payments from Nigerians abroad and increased acquisitions of local assets, particularly government debt securities, by foreign investors.

Ali emphasized the meticulous efforts undertaken to settle these outstanding transactions, highlighting the rigorous assessment process conducted by independent auditors from Deloitte Consulting to ensure the legitimacy of claims.

Of particular note, the CBN recently fulfilled a $1.5bn payment obligation, resolving commitments to bank customers and thereby clearing the residual balance of the FX backlog.

The apex bank underscored its commitment to transparency and accountability, promptly flagging any invalid transactions for further scrutiny by relevant authorities.

In a statement, the CBN reiterated its dedication to fulfilling its obligations and outlined the strategic importance of clearing the FX backlog in stabilizing the exchange rate and curbing imported inflation, thereby fostering confidence in the banking system and the economy.

Speaking at a recent meeting, Cardoso emphasized the significance of this achievement in restoring credibility and confidence in the Nigerian economy.

The successful clearance of the foreign exchange transactions backlog aligns with the objectives outlined during the previous month’s Monetary Policy Committee meeting, which aims to stabilize the exchange rate, mitigate imported inflation, and stimulate economic growth.

Cardoso reaffirmed these objectives during a conference call with foreign portfolio investors, stressing the importance of sustained increases in Nigeria’s foreign currency reserves and improved liquidity in the foreign exchange market.

“We needed to undergo an independent and credible process to determine the authenticity of these obligations, and at this juncture, I can confirm that we have cleared all genuine, verifiable transactions. This hurdle to market confidence in the country’s ability to meet its obligations is now a thing of the past,” Cardoso remarked.

This decisive action by the CBN marks a significant milestone in Nigeria’s financial landscape, signaling a path toward a more resilient and stable economy. As the nation progresses, the successful clearance of the FX backlog serves as a beacon of confidence for investors and businesses alike.