If you missed the CBN Governor’s interview on Arise TV, here is a summary.

On FX Backlogs

– We met $7 Billion in unpaid obligations
– We had reason to believe we needed to take a harder look at those obligations.
– Deloitte was contracted to do a forensic audit of what is valid or not. The results were startling
– $2.4 Billion had issues
– Not having valid import documents
– Entities did not exist got allocations
– Entities who asked for FX got more than they asked.
– Entities that did not ask got allocations
– We wrote to the authorized dealer to explain. Sadly much has not been disputed.
– $2.3 Billion of the validly executed ones including Airlines have been cleared.
– What remains is $2.2 billion. We are confident we will address those. We have come to the end of the road.
– The Naira remains undervalued
– The Naira will stabilise.

On FX Liquidity

– CBN does not produce FX, it rather relies on what comes in.
– You need a mix of FX sources to have a adequate liquidity. FPI is one of them.
– A lot of FPIs are very interested in coming back to the Nigerian Market.
– They (FPIs) have taken a methodological interest in the direction the country is going.
– Recent move to have NNPC and other MDA to move their funding into the CBN is very positive and a confidence booster. Those outsiders see it as a giant step forward.
– The time for panic and cynicism is not now. We are in a time where the right decisions are being taken.
– Even the rating agencies are reacting positively to what is happening.

On Interventions.

– I have no illusions that interventions are necessary in our country. They help to channel resources to people however small.
– However, it is important to ensure that the framework is there to ensure it gets to those who really need it.
– The CBN will focus on it’s core strength.
– We will be working closely with those whose core strength is in the intervention space.
– We cannot think and implement at the same time.
– We do not have the luxury of failed interventions.

On the MPC

– I was concerned that the transition was questionable. We took our time to ensure as much as possible that the MPC is impactful and complements the fiscal side.
– It signals we are moving the MPC in the right direction.
– The new CBN is fully focused on Stabilization of prices and lowering inflation.
– The MPC will reflect the new direction of the CBN focus and core mandate.