The Central Bank of Nigeria (CBN) has concluded its forensic audit into undelivered foreign exchange (FX) forward contracts, declaring the case closed and stating that no appeals will be entertained.
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The audit, conducted by global accounting firm Deloitte from September 2023, examined transactions under the Retail Secondary Market Intervention Sales (RSMIS) window to verify documentation, contract legitimacy, and compliance with foreign exchange regulations.
In a statement published on its website, the apex bank said the probe uncovered “significant irregularities” in several contracts, including mismatches in beneficiary identities, exaggerated FX requests, incorrect or blank Form M submissions, approvals for non-permissible imports, and sales higher than documented demand. Some contracts also involved unauthorized companies importing milk, vague import descriptions, and rejected Form A applications that still received approvals.
According to the CBN, the audit revealed that many contracts, which involved upfront naira payments for future dollar delivery, went unfulfilled. Some were invalidated because the company name on the approved sales result differed from that on the Form M portal, or because the approved sales value exceeded the cost of the import item.
“No right to FX settlement can arise under Nigerian law where the underlying transaction is tainted by illegality, misrepresentation, or non-compliance with binding regulatory rules,” the bank stated.
The regulator confirmed that all invalid contracts were cancelled and no FX payments were made on them. Settling such deals, it said, would have rewarded non-compliance, depleted reserves, and undermined market integrity.
The CBN stressed that all affected parties were given an opportunity to respond during the review and that the process met procedural fairness standards. It vowed to collaborate with law enforcement and regulatory agencies to impose civil, administrative, or criminal sanctions against violators.
“The case of undelivered forward contracts is now concluded and closed,” the apex bank said, urging banks and clients to maintain proper documentation, submit only valid transactions, and strictly comply with FX regulations.
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