Rédaction Africa Links 24 with Kehinde Akintola
Published on 2024-02-28 16:25:29
The House of Representatives made a significant decision on Wednesday to thoroughly investigate the cancellation of $2.4 billion worth of forward contracts sold to manufacturers by the Central Bank of Nigeria (CBN).
The recent announcement by the CBN invalidating these contracts was based on the discovery that the businesses involved did not meet certain conditions set forth in the agreements. This resolution was reached following the adoption of a motion of urgent public importance, sponsored by Hon. Zakaria Dauda Nyampa, Hon. Ojema Ojetu, and Hon. Obed Shehu.
The House has entrusted its Committee on Small and Medium-Sized Enterprises (SMEs) with the task of inviting the affected manufacturing companies and the Central Bank Governor, Olayemi Cardoso, to review their documents and determine which companies had legitimate transactions.
Hon. Nyampa highlighted in his lead debate that the invalidated forward contracts were established approximately a year ago between Nigerian manufacturing companies and the CBN to mitigate risks associated with currency fluctuations and exchange rates.
After entering into these agreements, the companies’ bank accounts were debited in Naira equivalents, and letters of credit were issued by the participating commercial banks. However, the CBN decided to revoke the contractual obligations and cancel the transactions one year later.
This move has raised concerns about the impact on the national economy, especially amidst challenges such as inflation, unemployment, increased poverty levels, and general hardships.
There is apprehension that if the cancellation of these transactions continues, it could lead to the widespread collapse of small and medium-sized enterprises and the departure of large corporations from the country, bringing about various negative consequences.
With the adoption of the motion, the House has given the Committee a period of three weeks to conduct the investigation and present their findings for further legislative action.
In conclusion, the decision to investigate the cancellation of the forward contracts is a crucial step towards ensuring transparency and accountability within the financial sector. By identifying genuine companies with legitimate transactions, the House hopes to address the concerns raised about the potential impact on the economy and the business community.
The outcome of this investigation will provide valuable insights into the circumstances surrounding the cancellation of these contracts and guide future actions to prevent similar situations from arising in the future.
Read the original article on Nigerian Tribune
