The Central Bank of Nigeria (CBN) has hinted of its plans to impose civil, administrative, or criminal sanctions against dealers found to have breached foreign exchange (FX) rules, following the conclusion of a forensic audit into undelivered forward contracts.
A document titled Frequently Asked Questions (FAQ) on the Settlement of Undelivered Forward Contracts, published on the Bank’s website on Thursday, indicated that the sanctions against the dealers was sequel to the forensic audit conducted by Deloitte from September 2023, which reviewed transactions under the Retail Secondary Market Intervention Sales (RSMIS) window.
The document partly reads: “The Central Bank of Nigeria is reviewing appropriate legal action against parties found to have violated applicable rules and regulations, based on the findings of the forensic audit. The Bank will collaborate with law enforcement and regulatory agencies to pursue civil, administrative, or criminal sanctions, as necessary.”
According to the apex bank, the contracts involved upfront naira payments in exchange for promised US dollar delivery on future dates—many of which went unfulfilled and the forensic audit is necessary to verify the legitimacy of these contracts, protect FX reserves, and uphold regulatory standards.
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The findings of the audit showed extensive irregularities, including mismatches in beneficiary identities, exaggerated FX requests, use of incorrect or blank Form M submissions, and approvals for non-permissible imports.
The CBN noted that certain transactions were based on vague or false documentation, while others involved companies that lacked authorisation for the items they sought to import.
In addition, the apex bank disclosed that in several cases, the approved FX sale value exceeded the declared cost of the imported goods, raising questions of misrepresentation, stressing that such infractions render the contracts void under Nigerian monetary policy regulations and ineligible for FX settlement.
While stating that only verified and compliant contracts were honoured, the CBN clarified that the affected counterparties had been given the opportunity to respond during the audit process before any contract was invalidated.
For those deemed invalid, the apex bank confirmed that Naira previously collected was refunded, but no FX was disbursed while the audit process closed and not open to appeal, citing the independence and procedural fairness of the review.
It further clarified: “The audit conclusions were based on a rigorous process carried out by an independent forensic expert (Deloitte), acting pursuant to a transparent mandate.
“The auditor contacted the authorized dealer banks concerning those contracts to get their explanations of the infractions before reaching conclusions on them. The findings have therefore met procedural fairness standards. The case of undelivered forward contracts is now concluded and closed” the CBN added.
It would be recalled that in March 2024, the CBN announced the complete clearance of the valid foreign exchange backlog after the governor, Olayemi Cardoso had in February of the year disclosed that about $2.4 billion foreign exchange backlog is not valid for settlement.
Cardoso clarified that out of the initially reported $7 billion FX liabilities of the federal government, about $2.4 billion were identified as invalid following a forensic audit by Deloitte Management Consultants.
In a letter dated August 4, 2025, signed by the apex bank’s Acting Director of the Financial Markets Department, Okey Umeano, and addressed to all authorised dealer banks, the CBN formally concluded the forensic audit into undelivered forward foreign exchange (FX) transactions and refunded the value of all unfulfilled and unvalidated deals to banks in Naira.
The letter showed that all validated transactions had been paid, while the local currency equivalent of outstanding and unverified transactions had been returned to the banks.
