The Central Bank of Nigeria (CBN) has announced that it is considering legal actions against individuals and institutions found to have violated foreign exchange (FX) forward contract rules, following a comprehensive forensic audit conducted by global consultancy firm Deloitte.
In a document titled “Frequently Asked Questions on the Settlement of Undelivered Forward Contracts” published on its website Thursday, August 7, 2025, the apex bank revealed that the audit uncovered “significant irregularities” in the execution of some FX forward contracts.
“The Central Bank of Nigeria is reviewing appropriate legal action against parties found to have violated applicable rules and regulations,” the statement said. “The Bank will collaborate with law enforcement and regulatory agencies to pursue civil, administrative, or criminal sanctions, as necessary.”
The forensic audit, which focused on transactions in the Retail Secondary Market Intervention Sales (SMIS), examined undelivered forward contracts to ensure compliance with all relevant regulations. According to the CBN, the review included scrutiny of contract documentation, trade confirmations, import/export records, Form M and Form A documentation, and validation of counterparties.
Some of the irregularities uncovered in the audit include: Discrepancies between company names on approved FX sales and those on the Form M portal, Sales values exceeding demand or the value of the underlying import, Unauthorized items or companies involved in imports, Incomplete or blank documentation, Sales processed for rejected Form A applications and Vague or misleading descriptions of import goods.
The CBN emphasized that contracts found to be invalid were cancelled and no foreign exchange settlements were made on them. Additionally, any naira payments already received in respect of such contracts have been returned.
According to the apex bank, “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.”
It further explained that paying for invalid contracts would have amounted to rewarding non-compliance, encouraging systemic abuse, and draining the country’s limited FX reserves.
The bank also clarified that the forensic audit’s conclusions are final and not subject to appeal. “The audit conclusions were based on a rigorous process carried out by an independent forensic expert (Deloitte), acting pursuant to a transparent mandate. The findings have met procedural fairness standards,” the document stated.
The CBN maintained that its decision to void non-compliant contracts is in line with its statutory responsibility to preserve financial market integrity and protect Nigeria’s economic stability. The issue of undelivered forward contracts, it noted, “is now concluded and closed.”
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