Reps Seek Probe Into $2.4bn CBN Contracts Rendered Invalid

The House of Representatives announced on Wednesday its decision to launch a probe into the recent cancellation of $2.4 billion worth of forward contracts by the Central Bank of Nigeria.

Addressing the National Assembly last week, CBN Governor Olayemi Cardoso revealed that a significant portion of the $7 billion foreign exchange backlog he inherited upon taking office included $2.4 billion from fictitious entries, undocumented requests, and questionable transactions.

Cardoso explained that the revelation stemmed from an audit report conducted by consultants hired by the central bank.

Under Order 8, Rule 5 of the House Standing Rules, which pertains to addressing urgent matters, sponsors Zakaria Nyampa, Ojema Ojetu, and Obed Shehu urged their fellow lawmakers to intervene in order to prevent the complete closure of Nigerian companies facing challenges. They emphasized the importance of collective action for the nation’s benefit.

Leading the debate, Nyampa who represents Madagali/Michika Federal Constituency, Adamawa State “The invalidated forward contracts were originally entered into about a year ago between various Nigerian manufacturing companies and the Central Bank of Nigeria to hedge against currency fluctuations and risks associated with exchange rates.”

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He noted that “Having entered into these agreements, affected companies’ bank accounts debited in naira equivalents and letters of credits issued by the participating commercial banks, the Central Bark of Nigeria decided to dishonour the contractual obligations and cancelled the transactions, one year thereafter.”

The House added that the cancellation of forward contracts is coming at a time of worsening national economic challenges such as galloping inflation, unemployment, Increased poverty level and hardships, adding that if the cancellation is sustained,

“The said transactions will cause the widespread collapse of small and medium companies and the exit out of the country of large corporations with all the attendant consequences thereof.”

To this end, the House mandated its Committee on Small and Medium Enterprises to holistically investigate the cancellation of the forward contract deals.

It also urged the committee to invite Cardoso and the affected manufacturing companies “To examine their documents with the view to identify genuine companies with legitimate transactions.

The committee has been tasked with reporting back to the House within a three-week timeframe, after which further legislative measures will be considered.

Africa Today News, New York 

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