- Links Turnaround To Shift From Ways & Means, Intervention Lending Recoveries
The Central Bank of Nigeria (CBN), on Friday presented its audited financial statement for the year 2024, announcing a turnaround in its finances with a ₦165bn surplus in 2024, from a deficit of ₦1.3trn in 2023.
A statement by the bank linked the rebound to a combination of effective containment of expenditure, gains on investments made and increased income from foreign exchange transactions.
Other factors, it noted, included notable reduction in loans and receivables from ₦16.1trn to ₦11.9trn, a situation it attributed to significant recoveries from earlier intervention lending programmes, as well as a deliberate policy shift away from intervention lending and monetary financing through ways and means in line with its new stance on allowing market mechanisms to drive credit allocation and financial sector development.
According to the bank, operating expenses in 2024 were well-managed and optimized, reflecting a cost-conscious culture which was achieved through strategic cost rationalization initiatives like non-essential spending cut, and streamlined operations across regional branches and departments. Despite the operational improvements, the statement acknowledged that some expenditure lines posed challenges particularly in its liquidity management operations which jumped to ₦4.5trn from ₦1.5trn in 2023.
“This increase was in tandem with the tightening monetary policy stance adopted to combat inflationary pressures throughout the year. In pursuit of that the Bank conducted more frequent and higher-value Open Market Operations (OMO) to mop up excess liquidity arising from fiscal injections at a significant cost. This is a responsibility CBN is carrying out on behalf of the Federation, in some jurisdictions, this cost is borne by the Government,” the statement noted..
The financial statements noted an increase in the loss on settled derivative contracts from ₦6.3trn in 2023 to ₦13.9trn in 2024, owing to the “direct consequence of the high volume of derivative contracts settled during the year under review.
These, it stressed, “are legacy transactions which the current management met on resumption of their office. This proactive settlement effort was undertaken as part of management’s broader strategy to Reduce outstanding foreign exchange liabilities, thus lowering its FX exposure, boost net foreign reserves, thereby improving Nigeria’s external buffer and investor confidence, restore credibility to Nigeria’s forward markets and address legacy obligations transparently.”
In line with the Financial Reporting Council (FRC) regulatory requirement on ICFR, the CBN said it successfully carried out an assessment of its internal controls which was further certified effective by the joint external audit team.
This, it stressed, helped to enhance transparency and accountability in financial reporting, strengthen institutional governance and internal risk controls, in line with international best practices in central bank operations
As a testament to the effectiveness of this initiative, the CBN said a joint external auditors issued an independent assurance report declaring its ICFR framework to be “effective” for the 2024 reporting period.
The statement said the improvement in 2024 is not coincidental but a product of deliberate, and strategic management efforts, helped by the decision of the management to reinforce governance and accountability, and instill operational discipline, besides pursuing a balanced monetary policy stance, ensuring price and financial system stability. All of these, it said, “have collectively repositioned the CBN as a credible monetary authority, with its 2024 financial results serving as proof of its unwavering resolve to support economic recovery, safeguard financial stability, and build public trust.”
In the period also, the nation’s external reserves increased from $36.6bn in 2023 to $38.8bn in 2024, a situation it attributed largely “to improvement in accretion to external reserves from portfolio investors, diaspora remittances and Federal Government receipts following improvement in the confidence in the economy. facilitated by better coordination with the Nigerian National Petroleum Company (NNPC) and diaspora engagement strategies. Also, proper investment management decisions aimed at boosting the reserves of the Bank.
This performance, he stressed further, “reflects the CBN’s firm commitment to external sector stability, ensuring Nigeria is better positioned to meet its international obligations, stabilize the Naira, and boost macroeconomic confidence.”
